Csr Notebook
2009
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Csr Notebook
Cause related marketing Vs CSR
INTRODUCTION:
Cause related marketing deals with the combined effort of profitable and non profitable organizations which involves marketing of products and services for mutual benefits. Research on this particular concept reveals that cause related marketing "is when companies partner with charitable organizations to help non – profit organizations to achieve their goals in a better way". In this context, CSR can be explained as the effort taken by every organization to do something good towards the society and the environment to create a healthy society.
CRM VS CSR:
The concept of CRM and CSR would be better understood if explained with an example. Let us analyze the example of ITC. ITC stands for INDIAN TOBACCO CORPORATION. It is a company that deals with manufacturing and marketing tobacco products across the nation. Being identified that these tobacco related products are harmful for those who consumes it, ITC adopted a strategy of "Conglomerate -Diversification", diversifying into unrelated fields like Stationaries, FMCG, Hotels etc, where it entered into manufacturing unrelated products like Classmates notebooks, Aashirvaad atta etc. This concept is called Corporate social responsibility whereas it also follows the practice of CRM where with every purchase of Classmates notebooks, Re 1 is contributed towards rural development and poor children education. This concept is known is Cause Related Marketing.
To put it simply: if a media company "A" decides to stop advertising unhealthy food to children and instead commits to promoting healthy eating, that's corporate social responsibility. If, on the other hand, Media Company "A "partners with a food company to help feed hungry children that's cause marketing.
CSR AND REPUTATION:
The most obvious link of CSR to overall corporate performance isthrough the reputation aspect. Reputations reflect firms' relativesuccess in fulfilling the expectations of multiple stakeholders(Freeman, 1984; Fombrun, 1996). In their research on reputationbuilding and corporate strategy, Fombrun and Shanley (1990) arguethat favourable reputation may enable firms to charge premium prices,enhance their access to capital markets and attract better applicantsand investors. Empirical evidence in their study suggests thatthe greater a firm's contribution to social welfare, the better itsreputation.Reputation, closely related to brand awareness, aids in branddifferentiation and ultimately helps a company gain (through a goodreputation) or lose (through a damaged reputation) competitive advantage (Kay, 1993). As Fombrun and Shanley (1990) comment:‘Well-reputed firms have a competitive advantage within theirindustries, but poorly reputed firms are disadvantaged.' Fombrun(1998) recommends that the pool of criteria used to evaluatecorporate reputations should consider: (1) multiple stakeholders,whose assessments aggregate into collective judgements, and (2) thedifferent but overlapping financial and social aspects according towhich stakeholders judge companies.
CONCLUSION:
Herewith it is understood that cause related marketing is different from corporate social responsibility since, the later deals with giving a percentage of profit towards CSR program which is tax deductable while the previous one deals with marketing relationship that exist between the profit and non profit organizations for better achievement of goals of both.
About the Author
The author Vasanthi selvaraj is working in Dhaanish Ahmed college of Engineering as a Lecturer, teaching marketing and HR papers for full time MBA students. She is an MBA and UGC NET qualified with indepth and sound knowledge in both HR and Marketing.
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