Question

What is cause-related marketing? Illustrate with examples.

Discuss why a company really needs and benefits from competitors.

Answer 1

Cause-related marketing is a sub-set of corporate social responsibility that is very popular in organizations. It is the cooperation of a profit and non-profit Organization with the goal of achieving mutual benefits.

In case of profit organization it enhances reputation and increases sales.
In case of non-profit organization it provides financial support and publicity.

Example of cause related marketing
American Express ran a campaign to help restore the Statue of Liberty . A penny was donated for every credit car transaction and a dollar was donated for each new card issued.

On World AIDS day, Starbucks donates 5 cents for every beverage purchased.

Vistara is the joint venture of an airline from Tata Group as well as Singapore Airlines. It has partnered with Salaam Baalak’s trust which is a non-profit, as well as a non-governmental organization, is providing support to street children of Delhi and Mumbai to fly 12 kids on its first flight ever.

Pros

• Directly enhances sponsor sales and brand
• Cause-related marketing is a respected and accepted business practice
• Heightens customer loyalty
• Boosts a company’s public image and helps distinguish it from the competition offering materials a corporate PR officers
• Helps build employee morale and loyalty
• Improves employee productivity, skills and teamwork.

Cons

• One major disadvantage can occur if public perception of the relationships sours. For example, your reputation can be harmed if your target audience sees your alignment with a non-profit as a marketing ploy. You can also face problems if the non-profit you are supporting does something unethical or controversial. Then you run the risk of being perceived negatively as well.
• It requires time and financial investment by the organization.

2.Competition is to be considered as an important aspect of economic growth. The fact is that competition benefits not only consumers, but also businesses in different ways.

• Innovative thinking Competition helps a business to grow and develop new products which are more durable and provides better facilities to consumers.
• Quality of Service. Quality of service is a key to customer satisfaction. When competitors are around you, you would be forced to provide better quality service. This will lead to more customer satisfaction which of course benefits you in long term.
• Understanding Customer Preferences. When your competitors make more profit than you , you can study the strategies adopted by them to attract more customers and become successful.
• Motivation Factor . Competition keeps the business going and continuing to improve itself.You really become proactive, alert, creative and above all focused. You stop being complacent and always think of better ways to satisfy your customers. You always want to be at the top.