Wednesday 28 September 2016

Goodpurpose 2010

Good PurposeThis is post first appeared on Richard Edelman’s Blog.

In a stunning reversal of findings from only two years ago, the citizen consumer movement is now being pushed by people in Brazil, China, India and Mexico. Our research challenges the traditional thinking that cause marketing/CSR is a product of Western social democracy and that low price is the winning formula in developing markets.

Our study, conducted in 13 countries (Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, The Netherlands, UAE, UK, USA) with 7,259 consumers, reports that 86% of consumers globally believe that companies need to place at least equal weight on society’s interests as they do on business’ interests. They expect the private sector to be part of the solution to important global issues; 69% of the respondents said that companies are in a uniquely powerful position to make a positive impact on good causes (80% in the US). Almost two thirds of respondents believe it is no longer enough for companies to give money to solve societal problems; they want companies to integrate good causes into everyday business and thereby move from old style corporate philanthropy to a business model that makes (as client GE coined) “green equal green.”

They will reward those companies by buying their brands:

  • 70% said they are more likely to purchase a product from a company that supports good causes while offering fair prices over a company offering deep discounts but no support for causes.
  • Global consumers say that purpose is more important than design/innovation or brand loyalty as a purchase trigger when quality and price are the same.
  • The number one cause for consumers worldwide is protection of the environment, though top causes differ significantly by country (improving the quality of healthcare and aiding in disaster relief is tied for #1 in China, while alleviating hunger and homelessness tops the issues list in the U.S.)

Mitch Markson, Edelman’s chief creative officer and the genius behind the survey, said that purpose is now the fifth “P” in the marketing equation–joining product, place, price and promotion. He believes that purpose allows deeper consumer engagement with brands, allowing the opportunity for citizen participation in solutions. Professor John Quelch of Harvard Business School agrees with Markson, stating that, “Purpose is the ultimate avenue for consumer engagement and inclusion, two vital pieces of the marketing puzzle.”

The most stunning findings in the study come from Brazil, China, India and Mexico:

  • In China and India, the percentage of adults personally involved in a cause has skyrocketed in one year from the mid 40s to the mid 80s.
  • More than seven in ten consumers in these four developing markets would buy products from companies supporting good causes, versus the mid-60s for the recession-wracked economies such as France and Italy.
  • Citizenship is no longer optional; 79% of consumers surveyed in China and India expect brands to be involved in good causes and at least 70% in those countries say they will more likely recommend a brand if it supports a good cause, versus mid-50s in Western Europe.
  • Developing market consumers are much more likely to recommend a brand that engages in social purpose than peers in the West (80% in Brazil, 77% in China versus mid 50s in European markets).

The linkage of brand with corporate reputation in developing markets is supported by consumer trust in companies that are socially responsible (81% in Brazil and 78% in China, 77% in India, and 78% in Mexico). Carol Cone, the mother of cause-related marketing and managing director of Brand and Corporate Citizenship at Edelman, said that “the dramatic rise of the citizen consumer in these markets has happened so quickly because the battle over natural resources and human rights is happening in their backyards.”

At Edelman we see our clients in developing markets move toward causes that utilize their products while aligning with national social interests. A perfect example is the BMW Cultural Tour, an annual drive that visits, and thereby highlights, heritage sites and customs in China, that benefit from BMW donations and consumer participation. Natura, a leading cosmetics company in Brazil, sources its products in a sustainable manner from the Amazon Basin, while enabling its largely female sales force to improve its economic status by selling door-to-door, even instructing rural poor in how to utilize internet cafes to place orders. PepsiCo is constructing check dams in rural India to facilitate rainwater collection while investing in locally grown agricultural products that enrich farmers and limit transport. So marketers, our fastest growth opportunities are awaiting us if we embrace this new era of the “citizen consumer.”