Competing on Social Purpose Notes

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St. Petersburg College *

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3583

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Marketing

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Feb 20, 2024

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docx

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Uploaded by DrTeam11657

Competing on Social Purpose Building a Strategy  Some brands, such as Patagonia, TOMS, Warby Parker, and Seventh Generation, have integrated social purpose into their business models from the start. o These "social purpose natives" offer a societal benefit that is deeply entwined with their products or services.  It would be difficult for these brands to survive intact without their social purpose initiatives. o Customers would likely react negatively if TOMS ended its one-for-one program or if Patagonia abandoned its commitment to eco-friendly manufacturing. o Social purpose natives must be diligent stewards of their brands.  The challenges are different for established brands without a well-defined social-purpose strategy, which are called "social-purpose immigrants." o These brands have grown based on superior functional performance rather than a broader social purpose.  To develop a social purpose strategy, managers should identify social or environmental needs that the brand can contribute to meaningfully. o Corporate social responsibility programs already in place may become relevant aspects of the brand's value proposition but focusing only on those initiatives could limit potential or divert marketing resources meant for growth.  Managers should explore social purpose ideas in three domains: brand heritage, customer tensions, and product externalities.  Brand heritage can help identify the social needs the brand is well positioned to address. o For example, Dove focuses on beauty-related social needs because enhancing beauty has always been central to its value proposition.  Customer tensions refer to conflicts people feel when their own experience conflicts with society's prevailing ideology. o Brands can become more relevant by addressing consumers' desire to resolve these tensions related to the brand's heritage.  Product externalities are indirect costs borne or benefits gained by third parties due to the manufacture or use of a product. o Addressing industry externalities can create opportunities for meeting social needs.  Panera Bread positioning its offerings as "clean food" is an example of addressing concerns about artificial ingredients and chemicals in the food and beverage industry.  Ideally, a company's social-purpose strategy should consider opportunities at the intersection of brand heritage, customer tensions, and product externalities. o Airbnb's WeAccept social purpose strategy is an example where the company's brand heritage of providing an open and inclusive platform intersects with cultural tension related to race discrimination, which has emerged as a serious externality produced by its service.

Pare the List  Managers should pare down the list of social purpose ideas to three or four social needs. o Strategies should be proposed for each social need in order to be evaluated as final candidates for the brand's social purpose.  To guide the prioritization and selection process, managers should consider how the social purpose idea generates business value and minimizes risk for the company. o An effective social-purpose strategy strengthens a brand's key attributes or builds new adjacencies while mitigating negative associations among consumers and threats to stakeholder acceptance.  Brand attributes are characteristics instilled in a product or service, including features, benefits, personality, and reputation supported through marketing communications. o When choosing among possible social-purpose strategies, managers need to understand how each option affects key brand attributes.  The Vaseline case study demonstrates how a social purpose strategy was developed by identifying where the brand's core attribute (healing power) was most urgently needed.  The resulting Vaseline Healing Project was not just a CSR or public relations initiative but was designed to connect business goals with societal needs. o The initiative outperformed other traditional marketing programs and achieved its objectives in its first full year, leading to increased investment from management responsible for the brand's profit and loss statement.  To assess the relationship between different social-purpose strategies and brand attributes, managers should consider if it reinforces existing brand attributes, what new valuable brand attributes it might create, and if it would be difficult for competitors to imitate.  One reason a brand purpose strategy may fall short is if it doesn't address the financial interests of investors and stakeholders. o A social purpose strategy can boost business performance by allowing the brand to compete in adjacent markets.  Brita successfully entered the bottled-water market by positioning filtered water as an environmentally friendly alternative, emphasizing waste reduction.  Managers should consider whether a proposed brand purpose and strategy can create new products or services for current customers, open new markets or channels, and reduce costs or increase profitability.  Consumer perception of a brand's social purpose is important to consider. o Different consumer segments may have different cognitive associations with a brand's social claims.  Labels like "fair trade," "environmentally friendly," and "ethically sourced" can sometimes induce negative associations, such as poorer performance.  Green Works, an environmentally friendly cleaning product line launched by Clorox, faced challenges due to consumer perceptions. o Eco-conscious consumers were put off by its association with Clorox, while mainstream consumers didn't believe the products were effective enough.  It's crucial for managers to carefully evaluate the associations consumers may have with each social-benefit claim a brand makes. o Managers should assess whether the social need will be personally relevant to target consumers, if consumers will easily associate the brand with the social

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