“Do well by Doing Good.”

Pepsi has decided to pull out of Super Bowl ads beginning 2010 , and will instead start a $20 million cause marketing campaign named “Pepsi Refresh Project”.  Under this program, Pepsi will be awarding grant money for community projects proposed and selected by consumers such as helping high school students publish books to develop their writing skills.

Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a “for profit” business and a non-profit organization for mutual benefit. The term is sometimes used more broadly and generally to refer to any type of marketing effort for social and other charitable causes, including in-house marketing efforts by non-profit organizations. Cause marketing differs from corporate giving (philanthropy) as the latter generally involves a specific donation that is tax deductible, while cause marketing is a marketing relationship generally not based on a donation.

One of the first examples of “cause related marketing” occurred t in 1976 when Marriott Corporation partnered with March of Dimes for its fundraising project.   Marriott’s objective was to create publicity and media coverage for the opening of its 200 acre entertainment center in Santa Clara, California.  March of Dimes’ objective was to increase its fundraising.  The result was enormously successful.

Other examples include American Express 1983 sponsorship campaign for the “Statue of Liberty Restoration Project”.  Studies showed an increase of 17% in new users and 28% increase in card usage as a result of this sponsorship.

OnPhilantrophy’ website reports a dramatic rise in recent years for cause related marketing, from 1.11 billion in 2005 to  1.34 billion in 2006, 1.44 billion in 2007 and 1.52 billion in 2008.

According to the Cone Millenial Cause Study in 2006, 89% of Americans aged 13 to 25 will switch from one brand to another brand of a comparable product for a “good cause”.  Most would prefer working for a company that is “socially responsible”.

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Filed under: Life at E-Institute, Marketing 101