CSR as a branding strategy
Farooq Sobhan | Monday, 28 July 2008
IT is a truism that in today's world, everything can be copied. And that includes everything from the latest hi-tech gadgets to the newest fashion items. Technological advancement has brought about a convergence in product quality and features that makes for very little difference today between products in a particular market (and of course, within a particular price range), whether it be portable music players or a pair of stonewashed jeans. Increasingly, corporate houses are realising that to find success and growth within such a marketplace, their brands must become a part of their customer's lives.
That though, is easier said than done. Chances are more than one of your competitors have figured that out already. And they are working diligently towards establishing themselves in that regard. To steal a march on them, probably the most effective instrument to have emerged out of the corporate sphere and into our consciousness over the last decade or so is Corporate Social Responsibility (CSR).
This may come as a surprise to those who are still stuck on the notion that CSR is just some epithet for corporate philanthropy that may add some value to the company, but overall it eats away at shareholders' dividends. Clearly, they haven't been keeping a hand on the pulse of business in recent times. They would do well to read Oliver Falck and Stephan Heblich's now quite famous article in the May 2007 issue of Business Horizons. In it ('Corporate Social Responsibility: Doing well by doing good'), Falck and Heblich outline the potential of strategic CSR as a voluntary commitment that seeks to exceed the expectations placed on a company by the society within which it operates, and how it benefits both society and the companies who practise it within the framework of a long-term vision. How does it do that? Well, this is where brands come in.
In conversation with a leading academic recently, a professor at IBA, this writer came to know of the mantra -- 'Differentiate or die' that apparently has most companies' production departments in a quandary. Unless you come up with something you can patent, it becomes very hard to maintain any meaningful edge over your competitors for too long. Advertising, if done brilliantly, may give you an advantage, but it too is unlikely to have the lasting impact that an effective CSR strategy that incorporates the core values of your company can have in embedding your brand in your target audience's mind. This means a CSR strategy that is proactive to changing trends, understands the concerns of the customer base and brings together stakeholders to meet society's needs. It is a holistic approach to branding that transcends product differentiation and seeks to tie in a company's philosophy with the day-to-day lives of its customers. The tendency of aligning a brand with a cause started emerging in the last two decades of the twentieth century and was dismissed as a 'fad' in some quarters. However, the integration of social issues and business practices has persisted and in the 21st century, it signals a fundamental shift in how businesses operate, with sustainability eating away at profits as the overriding concern in corporate culture. CSR, when used as a branding strategy, provides the best platform for a marriage between the two.
For it to work, a continuous, 365-days-a-year association with a cause that resonates with the company's values must be established. It works through linkage, so choosing the right cause is very, very important. The right cause is not necessarily what the company's owners feel most strongly about, but one that works to provide that all-important linkage. It would make no sense for a construction company to fight breast cancer. But if such companies commit themselves to renovating the dilapidated buildings of Old Dhaka, it can take advantage of the linkage. Breast cancer is a serious problem that affects mostly women. A women's clothing chain is an example of a company that could take advantage of the linkages it provides in the consumer's mind. We are treading a thin line here between CSR and cause branding. But it is important to realise that the concept of CSR is much broader than just aligning yourself with a cause. It encompasses sustainable development, labour practices, community development, environmental stewardship, etc. The cause the company aligns itself to acts as the manifestation of the company's philosophy in the public sphere whereby its customers can attach themselves to it.
How does one choose the right cause then? Ideally, it will satisfy four conditions. Firstly, it must reflect in some way the brand's culture and values or its products and services. Secondly, since the affiliation will most probably have to involve a third-party to facilitate it, this third-party itself must also share a natural affiliation with the brand. Next, the cause must be relevant to a brand's core customer segment. And lastly, the cause must resonate with the brand's target customer segment to attract new customers to the brand.
Done right, such an approach to marketing can cut across social, cultural and economic lines and establish a lifelong association between the brand and its customers. It will enhance corporate reputation and can act as the most effective strategy in building an emotional bond with its customers that lasts a lifetime. And that of-course, is the Holy Grail of marketing.
The writer is Chairman of
the CSR Centre
That though, is easier said than done. Chances are more than one of your competitors have figured that out already. And they are working diligently towards establishing themselves in that regard. To steal a march on them, probably the most effective instrument to have emerged out of the corporate sphere and into our consciousness over the last decade or so is Corporate Social Responsibility (CSR).
This may come as a surprise to those who are still stuck on the notion that CSR is just some epithet for corporate philanthropy that may add some value to the company, but overall it eats away at shareholders' dividends. Clearly, they haven't been keeping a hand on the pulse of business in recent times. They would do well to read Oliver Falck and Stephan Heblich's now quite famous article in the May 2007 issue of Business Horizons. In it ('Corporate Social Responsibility: Doing well by doing good'), Falck and Heblich outline the potential of strategic CSR as a voluntary commitment that seeks to exceed the expectations placed on a company by the society within which it operates, and how it benefits both society and the companies who practise it within the framework of a long-term vision. How does it do that? Well, this is where brands come in.
In conversation with a leading academic recently, a professor at IBA, this writer came to know of the mantra -- 'Differentiate or die' that apparently has most companies' production departments in a quandary. Unless you come up with something you can patent, it becomes very hard to maintain any meaningful edge over your competitors for too long. Advertising, if done brilliantly, may give you an advantage, but it too is unlikely to have the lasting impact that an effective CSR strategy that incorporates the core values of your company can have in embedding your brand in your target audience's mind. This means a CSR strategy that is proactive to changing trends, understands the concerns of the customer base and brings together stakeholders to meet society's needs. It is a holistic approach to branding that transcends product differentiation and seeks to tie in a company's philosophy with the day-to-day lives of its customers. The tendency of aligning a brand with a cause started emerging in the last two decades of the twentieth century and was dismissed as a 'fad' in some quarters. However, the integration of social issues and business practices has persisted and in the 21st century, it signals a fundamental shift in how businesses operate, with sustainability eating away at profits as the overriding concern in corporate culture. CSR, when used as a branding strategy, provides the best platform for a marriage between the two.
For it to work, a continuous, 365-days-a-year association with a cause that resonates with the company's values must be established. It works through linkage, so choosing the right cause is very, very important. The right cause is not necessarily what the company's owners feel most strongly about, but one that works to provide that all-important linkage. It would make no sense for a construction company to fight breast cancer. But if such companies commit themselves to renovating the dilapidated buildings of Old Dhaka, it can take advantage of the linkage. Breast cancer is a serious problem that affects mostly women. A women's clothing chain is an example of a company that could take advantage of the linkages it provides in the consumer's mind. We are treading a thin line here between CSR and cause branding. But it is important to realise that the concept of CSR is much broader than just aligning yourself with a cause. It encompasses sustainable development, labour practices, community development, environmental stewardship, etc. The cause the company aligns itself to acts as the manifestation of the company's philosophy in the public sphere whereby its customers can attach themselves to it.
How does one choose the right cause then? Ideally, it will satisfy four conditions. Firstly, it must reflect in some way the brand's culture and values or its products and services. Secondly, since the affiliation will most probably have to involve a third-party to facilitate it, this third-party itself must also share a natural affiliation with the brand. Next, the cause must be relevant to a brand's core customer segment. And lastly, the cause must resonate with the brand's target customer segment to attract new customers to the brand.
Done right, such an approach to marketing can cut across social, cultural and economic lines and establish a lifelong association between the brand and its customers. It will enhance corporate reputation and can act as the most effective strategy in building an emotional bond with its customers that lasts a lifetime. And that of-course, is the Holy Grail of marketing.
The writer is Chairman of
the CSR Centre