Why Responsible Marketing Works

June 13th, 2007   •   5 comments   


Courtesy of Grameen Foundation (http://www.grameenfoundation.org/)

At the recent PR Academy Conference, I had the treat of listening to Pak Hermawan Kartajaya, who is one of the thought leaders in the asian marketing scene. He spoke about how principle based marketing can lead to greater revenue and consumer goodwill in the longer term.

There are four factors which determine the sustainability of organisational branding:
:

Competitors – Local, regional or even global
Change – These are the macro forces driving consumer behaviours like technology
Customer – Our market is no longer local but regional and global
Company – The internal organisational dynamics

Any effective branding strategy should recognise the above factors first and foremost. Once those are considered, organisations should then look at what Hermawan has coined as the 3i Marketing Triangle. They are namely:

Identity – The look, feel and aesthetic embodiment of a brand
Image – The perception that customers have of your brand regardless of how you portray your identity
Integrity – This is where ethics comes in.

Herman cited a few examples of successful social enterprises.

One of them is the Grameen Bank in Bangladesh, which offers microloans to the poor without the need for any collateral. Its founder Professor Muhammad Yunus was awarded the Nobel Peace Prize for 2006. The bank provided basic necessities and functions almost like a government. To date, it has issued close to US$5.7 billion worth of loans to some 6.67 million borrowers, 97% of whom are women. This enterprise is so hugely successful that they even entered a joint venture with Danone to form Grameen Danone Foods!

Another example is Toyota’s Prius, a hybrid vehicle which is fast gaining and traction even amongst gas guzzling American motorists. Toyota’s emphasis on sustainable and socially responsible processes helped it to rise to become the number one car maker in the world.

Other examples include the Body Shop, whose founder Anita Roddick is well known for being a vocal activist in saving the environment, as well as Banyan Tree, which works with the communities in which its resorts are located.

Both the ideas of Innovation and Lovemarks were then shared by Hermawan. Innovation is the process of introducing something new which results in (hopefully) radical improvements.

Lovemarks is coined by Saatchi and Saatchi CEO Kevin Roberts. Its basic premise is that the heartshare is more important than marketshare which in turn takes precedence over mindshare. More details of Lovemarks here.

The session ended with a rather esoteric concept of how a company’s Mission, Vision and Values should be in sync with the Mind, Body and Spirit of customers. Companies should then evolve their marketing strategies in the following manner:

Intellectual Marketing -> Emotional Marketing -> Spiritual Marketing

I personally found the last portion a bit difficult to swallow. At the end of the day, marketing is really about a transaction between and organisation and its customers in return for a service or good. Equating it to religion may be stretching it a little too far.

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5 comments

  1. BadPup
    posted on Jun 14, 2007 at 2:32 AM

    Hi Walter

    I’m finding the whole thing a bit tenuous.

    I’m a huge fan of responsible corporate citizenship and I love the idea that more and more companies will put “make the world a better place” in their mission, I really am.

    But as a manufacturer of athlete’s foot powder, or paper hole punches, or steel rods that reinforce walls, or any of the other (majority) million goods and services that make the world go round… the whole “principle based marketing can lead to greater revenue and consumer goodwill in the longer term” thing just rings hollow.

    It’s extremely solid for some businesses (like the ones used as examples at the conference), but for most its unlikely to make an iota of difference to their revenue and goodwill. I’m sad about that, but I think its true.

    I think this is a classic case of finding examples that support the theory (a bit like finding statistics that reinforce, while ignoring those that don’t).

    I’d also say “delivering on brand promise” is one of the major determiners of brand sustainability but I can’t seem to fit it into the four factors you list. When I think of sustainability I think of a loop process, which includes delivery, response, adjustment, delivery, response, adjustment…

    Just thoughts, nice post (as always).
    =) Marc

  2. posted on Jun 14, 2007 at 5:32 AM

    Having been in the CSR scene and run a few corporate social responsibility programmes myself, my observations has been that too many companies nowadays run such programmes for altogether non-altruistic reasons:

    1. Everybody is doing it, after all, so we should too,
    2. We need to “appear concerned about something” otherwise we may be branded as heartless,
    3. We need to get into the good books of stakeholders – public, government, legislators etc.
    4. I really don’t know what to do with my marketing budgets anyway, and ads are not working out as well as they used to… etc

    Marketers sit around and think… hmmm which cause should we support that has alignment with our needs and which we can extract the most mileage and goodwill out from for our business . Too many of them do not support a cause for the cause’ sake, but to serve their own interests.

    I’m feeling that maybe these companies shouldn’t insult people’s intelligence.

    I’d give examples, but I still want to have a career in the PR industry… ^^

    PS: Welcome back, Walter! =)

  3. posted on Jun 15, 2007 at 2:49 AM

    We can agree there – far better for companies to spend money on real needs than to bulk up director fees or shareholder retirement funds. =)

  4. posted on Jun 15, 2007 at 12:41 AM

    badpup,

    Thanks for the well thought through comment on this post!

    I had my suspicions and doubts about responsible marketing too. Not everything lends itself well to a CSR approach when it comes to branding. However, I believe that principle based businesses are growing in clout and consumers are also getting smarter.

    The most glaring example is the environment. It has now become the number one global issue for politicians and industry leaders, even overtaking poverty and hunger in its significance and coverage. Nobody gave two hoots about it a couple of years back, but now it has become the flavour of the moment.

  5. posted on Jun 15, 2007 at 1:34 AM

    daniel,

    I think its an inescapable fact that most people go into business to make money rather than champion a global cause. Of course, there are the Anita Roddick’s of this world but they are few and far between.

    Being sincere and genuine is important in any CSR initiative. However, corporations need to also be realistic about what they can andd cannot do. This is why they need to manage consumer expectations.

    As badpup has alluded to, one can also do this much to be a ethical based firm. Anything beyond that may be seen as an insincere effort to get media coverage.

    My own world view is that anything which helps a worthy cause, regardless of intention, is worthwhile applauding. There is just too much pain and suffering around.

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