When the Going Gets Tough, P&G Gets Philanthropic

Procter & Gamble, which has made the “value” argument to consumers in this down economy, is adding another one: Buy our products and some of the money will go to charity.The company’s expanded embrace of cause marketing comes as P&G and charities alike feel the heat from the recession. P&G’s second quarter total sales fell 3.2 percent to $20.4 billion. The latest manifestation of the strategy is this month’s brandSaver monthly coupon booklet, which is distributed to 50 million households. The booklet promotes the largest number of charity programs it ever has: three. Consumers who redeem coupons for brands like Tampax, Always, Pampers and PUR water filters will also be indirectly contributing to causes related to the brands.P&G rep Glenn Williams said the company is putting a renewed focus on cause marketing. “It goes without saying that reframing the value equation is of tremendous importance to nearly all businesses these days,” he said. BrandSaver, in particular, “enables the consumer to do something good, something right, in these difficult times, and we think there’s real value in that.”The topic was top-of-mind for many P&Gers during a recent company discussion on value. Held in Cincinnati, the panel included bringing in outside influencers—namely, a mommy blogger, a financial expert and a celebrity stylist—to brainstorm different ways of defining value in the current economic times. Several participants brought up the need to leverage cause marketing, but only on brands for which it made sense. (All three programs contained in this month’s brandSaver exist independent of the coupon booklet. An initiative linking Pampers to the prevention of neonatal tetanus, for instance, was founded in 2006.)Scott Beaudoin, cause marketing director at global communications firm MS&L, applauded the effort, noting that what P&G has done is bring together three charities that exist outside of the brandSaver context under a common theme. The shift aligns with the current consumer focus on “value” (product-focused) with a corporation’s “values” (social activism).P&G isn’t the first company to tap cause marketing. American Express is said to have created cause marketing with its Statue of Liberty restoration effort in 1983 and the tactic has been used widely for both marketing and philanthropic reasons. But Duke University marketing professor Gavan Fitzsimons said using cause marketing to bolster a value claim, as P&G appears to be doing, is untried. If consumers want to give to a charity, why do they need a middle man like P&G, Fitzsimons asked. “It’s not the most efficient way to give,” he said. Some recent research seems to back up P&G’s strategy. A survey by Boston-based brand strategy firm Cone of 1,071 U.S. adults last year found that 75 percent of consumers were more likely to buy a product when a portion of sales go toward a specific cause. Moreover, 52 percent of those surveyed said corporations should still maintain their commitment to giving in tough times.Less clear, however, is whether giving P&G’s products the halo of philanthropy will ward off private label or whether it will just help to better compete against other branded products.Beaudoin, for instance, noted that “price and quality being equal, consumers will choose brands that are associated with a cause.”Cone founder Carol Cone said her firm has never done research on whether a charitable component would cause a consumer to choose a more expensive brand over a cheaper one. “Our research for 15 years studied the issue of comparable value equations, then adding cause. Specifically the question was: ‘When price and quality are equal between two brands, would you pick one over another if one was associated with a good cause?’” she said. “The numbers stated that 66 percent would likely select the one associated with a cause in 1993, and has consistently trended upward towards 80 percent.”Whether philanthropy is an effective hedge against private label or not, Cone said P&G is on the right track. “Good is the new black. Like black, it never goes out of style,” she said, adding, “to reframe what value means today is really smart.”

Brand Marketing

When the Going Gets Tough, P&G Gets Philanthropic

Elaine Wong

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Elaine Wong