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Category: Branding and Social Responsibility

Branding and Social Responsibility

Brands Face A New Era In Social Responsibility

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Brands And Social Responsibility

Historically, corporate social responsibility has put the emphasis on how businesses are doing good. It’s become an increasingly varied checklist of “things we’ve done right”. Today though, socially aware audiences want more. They increasingly make judgments about you based on your overall likeability. They want to do business with brands that are good.

And that in turn means that, at a social level, your reputation depends less on your ability to simply highlight good works done in isolation (through community activities or sponsorships for example), and much more on your ability to show that you are inherently principled in your dealings and that you behave consistently across your organization in ways that align with your social and commercial reputation.

That shift in the significance of social actions has a downstream effect on critical social initiatives such as sustainability. In my opinion, they should no longer be seen as nice-to-haves or even as opportunities to improve efficiencies across your supply chain. Rather, the actions you take in these areas are competitive opportunities to distinguish your company from others. Your social actions help define and demonstrate your ‘moral compass’ – and in positioning you as transparent, consistent, reliable and principled, they add value to dealing with you. They also help swing the dialogue, and therefore the consideration set, away from just price.

People like good brands. They trust them. They believe them. They see value in them. They see them as the counter to unethical behaviors. Subconsciously, they look for opportunities to favor them. For those reasons, good brands carry lower “social risk”. They are less likely to draw adverse reaction, less likely to make the news for all the wrong reasons, much less likely to have their actions and motivations questioned.

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Branding and Social Responsibility

Brands And The Leap To True Responsibility

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At a recent presentation, I introduced the concept of the “goodness movement”. I defined this as a global wish for social wellness that is driving corporate social responsibility today: a recognition by brands that those that are seen to do good perform better; and a response to a wish by consumers to make a difference. Buyers want to tell themselves they are doing the right thing, and as part of that, they want affirmation on the part of the brands they buy from that good is being done.

That’s never been easier. Purchases are increasingly tied to beneficial actions that, if I can refer back to my direct marketing agency days for a moment, amount to a “social premium”. The new coupon is social. Once consumers clipped physically to get money off. Increasingly, when they buy the brand, a good action is now included. Pampers, for example, have teamed up with UNICEF in a program that sees one dose of the tetanus vaccine donated for every pack of product bought.

Brands are increasingly presenting consumers with what I termed in the presentation a “million little actions” in the form of these social premiums. And those actions range from giving to doing to supporting.

Fairtrade is a powerful example of this “social premium” at work. The company has grown to being the most recognized and best understood ethical brand in the developed world because they have understood the power of consumers feeling that they are making a difference for others. Fairtrade works so powerfully as a “social premium” brand because it has such a very simple message: look for this label, buy the product and someone gets paid fairly. The brand has succeeded for four key reasons. It found that the market was willing to pay a premium for social justice. It recognized that it had something that corporates wanted: a name for enhanced reputation. It understood that in a world of brands, you had to be a brand in your own right to thrive. And it delivered a simple value equation to consumers who now know what they have to do, and the difference it makes. Goodness couldn’t be easier.

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Branding and Social Responsibility

Corporate Social Responsibility And Growth

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Many years ago, companies thought that they were adding value to an economy by employing people to make good products and services. They added brand thinking later, which strengthened the company’s appeal to customers. More recently, companies see their reputation as having to possess an additional layer drawing customer respect for the company. As Professor Kash Rangan of Harvard observed: “It is no longer sufficient to compete on quality, price or product innovation alone,” to which Dr. Joseph Plummer of the Advertising Research Foundation added: “The brand is what you buy. The corporate reputation is what you believe in and trust. It’s not an either/or. You need both.”

Though unreported on most balance sheets, brand value and reputation still remain two of a company’s most important assets in today’s hypercompetitive globalized marketplace. In this Marketing 3.0 world, successful modern brands need to reach out not only to the customers’ own hearts and minds, but also to their concern for the hearts and minds of others—and for the sustainability of the planet. We talk increasingly about companies striving to achieve a Triple Bottom Line: People, Planet, and Profits.

Now we have to ask: What benefits and growth come to companies that improve their reputation? We list the following:

•The company is better able to attract and retain world-class talent.

•The company has created an additional level of customer-valued differentiation.

•The company may benefit by attracting more socially concerned suppliers and distributors who are aligned with the company’s values.

•The company has mitigated its risk of being criticized or slandered.

•The company has attracted an additional class of customers who care about the planet.

As wealth and education increase, customers are becoming increasingly aware that their own well-being is tied to the environment’s sustainability and societal harmony.

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Branding and Social Responsibility

Why Global Businesses Must Act Responsibly

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A while back, I read this interesting article in The Huffington Post, by Matt Browne. Titled, “Pro-Logo: Can Global Brands Become a Force for Good?” it suggests that global brands are more accountable now than they once were, and possess the potential to change the world for the better. Given that Millward Brown works with so many global clients, I hope he is right. It makes me feel that my job is more worthwhile than it might be otherwise.

I think Browne’s argument can be boiled down to two key quotes:

Global brands are the only ones who will ever have any incentive to improve environmental sustainability and labor practices, precisely because they are the only ones who will be held to account for their actions.

And:

In an era of subcontracting, outsourcing, and increased competition, CEOs are well aware that brand reputation is one of the few capital assets a corporation possesses. If better working conditions, sustainable production, or ethical supply chains are ways in which a brand can enhance its reputation, appeal and value, then doing good globally can be good for business.

As I have noted elsewhere, the value of acting responsibly is not always apparent. In the short-term, a company may make more money by acting irresponsibly or turning a blind eye to supplier practices. But in the long-term, these acts can have a very negative effect.

Nike learnt that global brands are held to a higher standard the hard way (read more on that here). And recently, Apple has been subject to scrutiny over working conditions at the Chinese factories of suppliers like Foxconn Technology.

And sometimes, even the most well-intentioned acts can result in negative outcomes. Victoria’s Secret’s commitment to buy organic fair-trade cotton from Burkina Faso, has recently been criticized for failing to safeguard against the use of child labor.

All three companies, Nike, Apple and Victoria’s Secret, are well-known, international brands. As such, they are of interest to many people and inherently newsworthy. Their fame is both a strength and a weakness, not shared by lesser known brands. Fame forces premium brands into what has been referred to as the “lonely leadership position,” because most consumers are not willing to pay for a company to act responsibly. Their primary interest is to get a good product at a good price.

The good news, however, is that savvy corporations use their clout to share the load across all companies in their industry. By publicizing how they are either addressing past problems or working to a higher standard than others, they can create a positive perception with their customers and differentiate their brand from the competition. In many cases the competition are compelled to follow.

So what do you think? Do global brands have the potential to improve the world we live in? Can a company create competitive advantage out of doing the right thing, even if customers are not willing to pay for the additional cost? Please share your thoughts.

Contributed to Branding Strategy Insider by: Nigel Hollis, Chief Global Analyst Millward Brown

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Branding and Social Responsibility Derrick Daye

Exploring Social Responsibility: The Product

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Social Responsibility Management Brand Strategy

Social responsibility is largely misunderstood and therefore typically mismanaged by brand marketers. Social responsibility is not something that brand marketers should do on behalf of a brand or market as a selling point for a brand. Social responsibility is a product in its own right, and as such puts to rest the central claim against it famously articulated by Nobel Prize-winning economist Milton Friedman.

In a controversial, oft-cited essay published in the September 3, 1970 issue of The New York Times Magazine, Friedman argued that in a “free-enterprise, private-property system,” corporate managers are responsible to the shareholders who are the owners of the businesses that employ them, and the interests of these owners “generally will be to make as much money as possible while conforming to the basic rules of the society.”  Hence the title of Friedman’s essay, a declaration that has been both celebrated and decried in the intervening decades: “The Social Responsibility of Business is to Increase its Profits.” That is to say, the responsibility of business is not to do good but to make money.

Nowadays, consumers (or most of them at least) couldn’t disagree more. Consumers have come to expect a lot more from companies than a just a good product or service. Indeed, this is even a source of leverage and power for many consumers, with 63 percent in The Futures Company 2012 U.S. MONITOR survey agreeing with the statement, “By choosing to do business with companies that are more socially responsible, I can make a difference in this world.”

Companies that limit their responsibilities to their own profitability, and to the satisfaction of customers with their products and services, find themselves at crosscurrents with the direction and demands of today’s marketplace. Simply put, consumers want companies to produce and deliver more than just a good consumer product. They want companies to produce and deliver a good social product, too.

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