Philippine Daily Inquirer Business Features Section, February 18, 2005
THE CONCEPT of Corporate Social Marketing (CSM), others call the Societal Marketing Concept (SMC), first emerged in the early 70s in a seminal article written in 1992 at the Harvard Business Review by marketing guru Philip Kotler. He argued that in addition to the basic elements of the marketing concept that included customer satisfaction and profitability, one must add public concern
or what he referred to as â€œlong-run consumer welfare.â€
While Kotler was credited for helping acknowledge the importance of a social and ethical agenda in marketing, his original definition did not challenge businesses to deviate from a purely profit-seeking, self-interest mindset. In fact, there was subtle urging to engage in social marketing activities mainly to further promote business interests and its lifecycle.
According to Kotler, â€œThe enlightened marketer attempts to satisfy the consumer and enhance his total well-being on the theory that what is good in the long run for consumers is good for business. He is asked to do this not only to meet his social responsibilities but also because failure to do so may hurt his long-run interests as a producer.â€
Despite the absence of true altruism and a moral shortcoming in the original understanding of CSM, the number of CSM activities steadily rose over the last three decades triggered primarily, by advocacy and civic groups that decried excessive and abusive consumption; secondarily, by a growing number of businesses that emphasized sustainable growth while integrating ethical and societal interests; and thirdly, by a steady shift in consumer behavior toward product and services perceived to do societal good.
CSM as defined by Drumwright and Murphy evolved to â€œencompass marketing initiatives that have at least one non-economic objective related to social welfare and use the resources of the company and/or one of its partners.â€
Also, over time, the practice of CSM has gone beyond short-term charity projects to sustained global corporate philanthropy and intrinsic design in the marketing offer.
Studies of brands that have become icons of the CSM model reveal the following similarities in their marketing and business strategy:
One, CSM brands are driven by people and leadership fueled by passion for community or social causes rather than individual self-interest and business greed. Body Shop is a natural skin and body care retailer operating in 50 countries with over 1,900 outlets. A message by its founder, Dame Anita
Roddick, reveals the companyâ€™s business and marketing mission. â€œWe use our stores and our products to help communicate human rights and environmental causes.â€
Thus, Body Shop has consistently espoused causes against animal testing while advocating community trade, human rights and environmental protection. Body Shop has successfully merged the business and advocacy model in a community trade program where the company deals with small producer communities worldwide. These include the Amazonian Indian tribes raising Brazil nuts, the Chepang indigenous people growing herbs for Body Shopâ€™s Ayurvedic product line and the Nicaraguan farmers supplying sesame seed oil.
Two, the cause is intrinsically designed in the product or service officer. Grameen Bank in Bangladesh was organized in 1976 to offer micro-credit to the poorest of the poor without collateral. Today, Grameen Bank is the worldâ€™s financial model for micro-finance. Its model has been applied to projects in 58 countries in the United States, Europe, the Netherlands and Norway.
Presently, Grameen Bank serves the needs of 46,000 villages in Bangladesh with 1,267 branches. It has lent more than $4.5 billion in small loans of $12 to $15 to entrepreneurial women producing goods from their homes. The bank has even lent to beggars. Grameen Bank has over 3.7 million borrowers, 96 percent of whom are women with a 98 percent repayment and a recovery rate higher than any other banking system.
Noble cause and mission
Another is mail-order organic fashion People Tree, a pioneer in fair trade and ecology fashion that sells garment, underwear, and bed linen made from organic cotton. Organic fashion includes clothes produced without chemicals or fertilizers. In this case, organic cotton is grown using natural farming and production methods while providing traditional skilled farmers, artisans and workers a sustained livelihood and income based on fair or higher-than-market wages and buying prices.
Three, CSM brands due largely to its noble cause and mission, create new segments in otherwise mainstream markets while likewise, becoming highly differentiated and innovative in their category. Body Shop for natural-based personal care products, People Tree organic clothing representing ecology fashion and Grameen Bank for micro-finance and banking are just a few notable examples.
Four, CSM brands engage in global corporate philanthropy. Not all CSM brands were born with a cause. Today, more and more mainstream brands are engaging in at least one major, sustained CSM activity that is globally implemented.
One example is Ronald McDonald House Charities. The first Ronald McDonald House opened in Philadelphia, Pennsylvania in 1974. The House was named after the brand mascot whom kids worldwide love and look up to as a symbol of happiness. Ronald McDonald Houses are temporary residences located near hospitals for families and children requiring long-time in-hospital treatment.
In these houses, families can eat, sleep and form support groups with other families in the same crisis situation. Resident families make a donation of $5 to $20 a day but where donations are not yet possible, their stay remain free. Today, there are 240 Ronald McDonald Houses in 25 countries while 30,000 volunteers donate one million hours of their time annually. The program has helped more than 10 million families worldwide.
Luxury watch Chopard raises money for aids and leukemia research. It also champions Alp Action, a Swiss-based charity that advocates preservation of the worldâ€™s Alpine environment.
Conscious, ethical choices
CSM is indeed here to stay as more and more people; business leaders and cultures realize the value and intrinsic importance of doing business and marketing with an underlying and sustained societal and ethical cause, other than simple, pure profit. World data indicates an increasing number of consumers making socially conscious and ethical choices. More and more consumers are buying food, fashion and personal care products, among others, because they are natural-based or a percentage of the retail price goes to a favored cause.