Corporate social responsibility (CSR)

The advantages for a company of being socially responsible - that is, taking positive actions for the benefit of its staff and society as a whole - include enhanced brand image, and greater ease in attracting staff. There are different ways for a company to show corporate social responsibility (CSR):

■ Cause related marketing (CRM) is when a company donates money to a charity, a non-profit organization or a good cause, such as UNICEF or Oxfam. The brand is then associated with the charity. For example, a US non-profit wild cat sanctuary, Big Cat Rescue, wants to create a marketing partnership with another organization:

“Big Cat Rescue is looking for the right corporate partner for a mutually beneficial cause related marketing campaign. We need financial donations to be able to afford to make our good work more effective. Today most of this funding comes from private individuals. We are looking for a corporate partner that shares our principles and values.”

Note:The abbreviation CRMalso refers to Customer Relationship Management .

■ Green marketingis the development and distribution of eco-friendly, or environmentally friendly, goods - for example, washing powder that is not harmful to the environment. For example, 6 degrees.ca is a Canadian web-based forum that promotes green marketing and environmental protection:

“6 degrees.ca believes that if a business is behaving in an ethical or moral way then they will contribute to environmental sustainability. Sustainable development is development that meets the needs of today without compromising the ability of future generations to meet their needs. Responsible citizens are aware of environmental concerns such as global warming, and act to protect the environment.

■ Responsible purchasing is another way that a company can build or maintain a good reputation. Companies can refuse to buy materials or goods made using child labour or that have been tested on animals. As well as showing concern for human rights and animal testing, a company can implement a policy of sustainable purchasing and only buy products that come from renewable sources.

6.3 Make word combinations using a word from each box. Two words can be used twice.

6.4Complete the textsdescribing examples of CSR. Then decide whether the companies are involved in CRM, green marketing or social marketing.

a) In 2008, we are proud to continue ourmarketing (1) ..... with theArlette Foundation. We will promote the(2) ..... in our stores and wewill sell a range of products displaying the charity's distinctive logo.

For each product sold, we will (3) ..... money to the Arlette Foundation, with a minimum (4) ..... of £250,000. We are committed to being (5) ..... responsible.

b) The Push Play campaign in New Zealand has successfully (6).....  New Zealanders to do more exercise. The campaign aimed to limit the twin epidemics of obesity and diabetes, (7) ..... problems now affecting countries worldwide.

c) CASE STUDY: Woody Pens - Designed for the Environment

Instead of making its pens from plastic, Goodkind Pen Company uses wood scraps from local furniture makers, and its pens are designed to be refillable. By carefully designing its product to be eco- (8) ….. and of high quality, it is mutually (9)….. for the environment and the consumer. Goodkind has made a product with a super-green profile and, in the process, enjoys a high level of satisfaction from environmentally conscious consumers and companies with a responsible (10) ….. policy. Goodkind embraces environmental (11)….. .  

6.5 Think about the brands you buy. How does ethical marketing influence your purchasing decisions?

Confusing words

Customer or client?

A customeror a clientis a person who buys goods or a service. The term 'client' is mainly used for service industries, and implies a regular contact between the seller and the buyer. A consumeris a person who buys goods or services for their personal use. The term is also used to talk about someone who uses the product or service. For food, the customer is the person who buys it and the consumer is the person who eats it. However, the two terms are often used interchangeably without particular attention to the difference in meaning.

Stock or inventory?

In British and American English, inventoryrefers to the complete list of goods in stock - We have thirty types of paper in our inventory. However, in American English, the word also means the amount of goods in stock - Our inventory of paper is the largest in the state.

Salesperson or sales rep?

Trade show, trade exhibition or trade fair? Seminar, conference or congress?

The terms trade show, trade exhibitionand trade fairare interchangeable. However, seminar, conferenceand congressare not. A seminaris a class on a particular subject, usually given as aform of training; a conferenceis a larger event, where there are a number of talks on a particular subject; a congressis a large formal meeting of different groups to discuss ideas and exchange information.

Leaflet or flyer?

A leaflet advertises a product or a service; a flyer usually advertises an event.

An ice-cream tub or a tub of ice cream?

There is a difference between an ice-cream tub (the container itself, without the contents) and a tub of ice cream (the product in its container). So a jam jar is the container, and a jar of jam refers to the jam in the jar.

 Text 3                        The marketing budget

Marketing must contribute to the profitability of a business - how much profit it makes. The marketing budget presents the cost of the marketing plan. It can include the cost of distribution and different marketing actions, such as advertising or market research. The annual marketing budget shows what the marketing department is planning to spend over the year. Management may ask the marketing team to justify or modify the budget before giving approval.   

 Budgeting approaches

There are several approaches to setting the marketing budget – that is, fixing spending on marketing - for example, investment in research or advertising:

■ the affordable approach

The company forecasts revenues(predicts the amount of money it expects from sales), deducts costs, and allocatesa part of the remaining funds to promotion. Marketing is considered as a cost that can be cut (reduced), depending on what the company can afford - that is, how much money it has left.

■the percentage of sales approach

A percentage of current or anticipated sales (what a company expects to sell) is allocated to marketing actions. Typically, ten percent of net sales is spent on promotion.

■ the objective-and-task approach

The company costs out, or calculates, the cost of reaching its marketing objectives. For example, new products will need large advertising budgets to build awareness.

■ competitive parity

Competitor investment is tracked, or monitored, and used as a rule of thumb (a guideline) to set the promotion budget. The objective is to beat (spend more than) or match (spend the same as) the investment of competitors.

Whichever approach is chosen, marketers need to respect the budget - that is, not go over budget (spend more than planned) or be under budget (invest less than planned).

Note: Another way of saying respect the budget is be on budget.

Return on investment (ROI)

 Quotation: “Half the money I spend on advertising is wasted; the trouble is I don't know which half.” John Wanamaker, 19th century American department store owner.               

Marketers are accountable for – that is, responsible for - their budget. They must demonstrate that their marketing actions are cost-effective (productive relative to the cost) and not a waste of money. The marketing plan establishes how to measure the return on investment (ROI) or the cost-effectiveness of different marketing actions - the amount of profit made based on the amount of resources needed to make it. Monthly, quarterly and annual reviews of performance against budget measure projected, or forecast, results against real performance - how the company actually performed. Many companies use statistics called marketing metrics to quantify the performance of their marketing activities. They can include items such as market share, advertising spend or response rates for direct marketing. To talk about the cost-effectiveness of marketing actions, marketers say:

6.7  Match the two parts of the sentences.

1     Marketing should contribute

2     The marketing budget sets

3     The marketing director may need to

4     Companies track

5     Marketers should respect

a   justify the marketing budget.

b   the budget.

с   competitor spending.

d   to the profitability of a firm.

e   out the cost of the marketing plan.

6.8 Complete the postings from a marketing website using words from the box. Then say which budgeting approaches are mentioned in the posts.