Cause Related Marketing and Product RED

I recently read the article "Bono's Product (RED) Initiative: corporate social responsibility that solves the problems of 'distant others" and learned about one form of CSR, cause related marketing.

Here are some key points from that article:

• The Product (RED)TM initiative was launched by Bono at Davos in 2006. Product RED is ‘a brand created to raise awareness and money for The Global Fund to Fight AIDS, Tuberculosis and Malaria by teaming up with iconic brands to produce RED-branded products’.
• Consumers can help by shopping at American Express, Apple, Converse, Gap, Emporio Armani, Hallmark and Motorola, where a portion of the proceeds go to the Global Fund
• CSR has developed over the last few decades ranging from Corporate Philanthropy initiated by Andrew Carnegie and John Rockafeller who donated millions to charitable causes to focusing on issues during the 1960’s relating to labor practices and employee and product safety. After the emergence of sweatshops in the 1980’s and 90’s many corporations began to include Social Responsibility as a part of their overall strategic plans and codes of conducts.
• Recently, we have seen the emergence of cause-related marketing in which the marketing of a brand, company, product or service is tied directly to a social cause, most often with a proportion of the sales going to support the cause.
• The RED initiative was formally launched at the World Economic Forum in Davos in early 2006, with several other companies joining over the next few years. These companies offer a variety of products and services at a range of prices with proceeds donated to Product Red.
• Benefits of cause related marketing with Product Red range from increase of sales of Product RED items, to building a better brand image.

Cause related marketing is a form of marketing which partners a corporation with a non-profit for a mutual benefit relationship. There are several corporations and non-profits that have utilized cause related marketing such as Yoplait and Susan G. Komen, Mariott and March of Dimes, and of course the largest cause related marketing program Product Red with companies such as Motorola, Apple and the Gap. Cause related marketing is a unique form of CSR in that it allows the consumer to identify with the charity in which their purchase is helping to fund. Cause related marketing is a win-win situation in that the partnership between the companies helps to build a better brand image, increase sales and help the non-profit. When consumers are making purchase decisions they expect the corporations to do more than just make a profit, they expect them to improve the well being of others; whether it is in the local community or within the global environment. With the success of Product RED, it is likely that many more companies will try their hand at cause related marketing as a form of their Corporate Social Responsibility in the near future.