Posted by: kenwbudd | March 17, 2011

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) has gained a lot of attention in recent years, but researchers and executives want to better understand in greater detail how today’s companies are choosing to “do well by doing good.”

They found that while the vast majority of companies continue to pursue traditional forms of charity, an increasing number of them are also incorporating cause-related marketing into their CSR efforts.

This seems to be on the upswing right now. Half of panelists surveyed reported cause-related marketing initiatives at their company. News reports have indicated that “cause-related marketing has become very popular”, and surveys confirm it.

Unlike traditional philanthropy, which involves simple monetary donations, cause-related marketing often entails a co-branded partnership between a company and a nonprofit to promote an event or a social cause.

Companies such as American Express, Starbucks and The Gap partner with Product Red and agree to contribute a percentage of “Red” product sales to The Global Fund, a Geneva-based organization that funds programs to fight HIV and AIDS in Africa.

Such co-branding not only helps the social cause, but also creates a halo effect for the companies involved.

One counterintuitive finding of surveys indicate that most companies did not believe CSR efforts increased sales.

Despite the growing interest in cause-related marketing, less than 25% of survey respondents believe that: Pro-social actions directly affect sales and profits for our products and services.

By contrast, 75% believed that CSR directly affected brand image. They don’t believe that CSR is going to help their sales in the short run, but they do think it’s going to affect their brand image and corporate reputation in the long run.

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