BMW Case
Content
Corporate Reputation Review
Volume 14 Number 1
Cause Related Marketing: Developing a Tripartite Approach with BMW
Ioanna Papasolomou Marketing Department, School of Business Administration, University of Nicosia, Nicosia, Cyprus Philip J. Kitchen Faculty of Business, Brock University, St Catharines, Ontario, Canada
ABSTRACT
In today’s fiercely competitive world, cause related marketing (CRM) plays an important role in business. It is seen as an effective way to build brands, create product awareness, revitalize corporate values and make corporate social responsibility and community involvement visible. It has proven to be an important marketing tool and offers valuable contributions in addressing corporate needs in the context of societal issues and the related needs of charities and causes. CRM is implemented by juxtaposing the strategic objectives of a business with traditional marketing communication tools in association with the needs and objectives of a specific charity or social cause. In fact, CRM is among the most popular forms of corporate giving. It provides the means to use the power of a brand to publicly demonstrate a firm’s commitment in addressing some (or a) social issues of the day while simultaneously seeking to achieve marketing and corporate objectives such as new product introduction, increasing sales or building reputation within a local or national market. Each of these may be taken as a general or specific objective in implementing CRM in particular contextual circumstances. Thus, outcomes underpin CRM’s application specifically in a given geographic brand associated context, while general outcomes underpin CRM’s application in wider and potentially different brand or indeed geographic
circumstances. This paper discusses the efforts of BMW (Cyprus) in working toward the above objectives and highlights a partnership with the Cyprus Football Association in supporting a charitable organization in the fight against drug addiction while creating product and brand awareness regarding the 320i model in the national market that is, a specific contextual applicatory analysis. The outcomes show that CRM can be a very effective way of enabling a firm and its employees to display and live up to their corporate values (Chong; Kitchen and Schultz) and communicate these to key stakeholder groups such as customers, the local community and society at large. Thus, BMW (Cyprus) successfully used CRM as a strategy and a promotional tactic to underpin brand awareness and develop a new product, while simultaneously enhancing corporate reputation by highlighting its cultural values. Corporate Reputation Review (2011) 14, 63–75. doi:10.1057/crr.2011.1
KEYWORDS:
BMW; cause related marketing (CRM); corporate social responsibility (CSR); corporate values; Cyprus; new products
INTRODUCTION
In today’s fiercely competitive global markets, and in a time of economic turbulence, consumer requirements of companies and
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their brands go beyond practical issues of product quality, performance and image. Consumers are questioning the role of business in society and are interested in company involvement in society, the ways in which this involvement is portrayed via communication and any accompanying societal benefits. Undoubtedly, profitmaking corporate entities exist to serve their stakeholder interests. Such interests extend, however, in the 21st century to more than the bottom line, and return on shareholder investment. Corporate reputation and image are key elements in communicating with stakeholders in a given context. Thus, many corporations now appear to be committed to corporate social responsibility (CSR). Of course, CSR and profitability are not mutually incompatible. Increasingly stringent legislation and stakeholder activism are key drivers of corporate behaviour and communication. Of necessity, organizations need to communicate a range of activities to satisfy increased expectations and demands. These activities include compliance with environmental and social legislation, cause related marketing (CRM), corporate giving to causes and charities, as well as the desire to conduct business in ways that appear to be accountable and transparent, and contribute something worthwhile to society. CRM merits close attention as it is increasingly used by corporations in an effort to engage with their stakeholders, communicate corporate values and promote corporate brand identity as much as (if not more than) traditional marketing communications activities. In a general sense, CSR offers wide scope for innovative programmes that fall under the umbrella of CRM. Well-known examples of successful CRM campaigns which are first glance do not seem to include shareholder interests, include: • the American Express campaign to restore the Statue of Liberty;
• Tesco, the UK supermarket giant, in funding the provision of computers for schools through customers’ spending; • Liverpool Football Club working in collaboration with Liverpool City Council to create a range of programmes to promote healthy living in one of Britain’s poorest areas; • Avon’s Breast Cancer Awareness Campaign which was launched in different countries around the world; and • BT’s (major international telecommunication provider) support of Childline, which has raised over UK£6 m since late 2002 in support of vulnerable children (see: http:/ /www.bitc.org.uk). The literature thus reveals wide diversity in terms of CRM practices and corporate interests in response to what are considered to be organizationally appropriate or cognate social problems and issues. Note that in some cases above there is an immediately demonstrable and direct relationship between the CRM initiative and the company, whereas in others the relationship is more indirect and amorphous. Thus, one cannot find a holy grail of best practice, as such practice is evolutionary in the environmental and marketing circumstances in which businesses are located. As might be expected there is significant variation across Europe and the rest of the world in the forms and the apparent directionality of CRM approaches. However, most CRM campaigns have some typical components (see Kotler and Lee, 2005) which may include: • A specified currency amount for each product sold. • A percentage of the sales of a product or transaction pledged to a charity. • The company matches the contributions related to product related items. • A percentage of net profits from sales of a product or products is pledged.
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• The initiative may be for a specific time frame, or continue over many years. • Offers may relate only to specifically designated products, or more generally to a corporation. • Or, there may be no apparent product offer, just the general sense that company x is involved in a specific local (national) cause which is important to the community and may bring about social benefits. The extant literature also concurs – mainly in the form of case studies (see Chong, 2007) – in relation to benefits that accrue to corporations from successful CRM campaigns. These include: attracting new customers, increasing product sales, creating and sustaining a positive brand identity (Kotler and Lee, 2005); enhancing corporate image, differentiating products and organizations, increasing brand loyalty and sales (Adkins, 2005); motivating employees and teams, bringing business values to life, building relationships and loyalty, adding value, demonstrating organizational values and enhancing reputation and profile (Adkins, 2005; Berger et al., 2007; Dowling, 2001). What is also common in the literature is that most organizations are motivated by several factors in undertaking social responsibility programmes. These include: the rise of consumerism, the heightening of public awareness of environmental and ethical issues, the pressure of organized activist and pressure groups and increased understanding that competitive advantage depends as much upon reputation as upon products or prices. Advertising clutter and consumer disinterest also mean that organizations have to now find new ways to motivate consumers and retain brand loyalties. Moreover, managers of CSR programs recognize the duties and responsibilities that companies have to the wider community and seek to contribute to the common good by benefiting both parties. Socially responsible corporate behaviour implies not only complying with relevant
legislation but also investing in human capital, the physical environment and in relationships with stakeholder groups. Each corporation involved in CSR and CRM activities are involved in their own way according to their core competencies, available resources and stakeholder interests, but always in the context of their cultural values and hopefully in line with the traditions of the country or environment in which they operate. However, sometimes CRM approaches and practices fail to meet public expectations, and of course accusations can be leveled that such activities are not entirely altruistic. For example, firms are often accused of promoting self-interested motives such as seeking to maximize long-term profit, enhancing corporate image and community relations and complementing promotional efforts. As indicated previously, however, the goals of business and society are not mutually inimical. The success of CRM relies on important factors such as: the identification of an appropriate cause which ideally relates to corporate values, clarity in relation to campaign objectives, long-term focus and commitment, effective communication and continuous cooperation between involved partners and ongoing monitoring and evaluation. CRM is increasingly being viewed as an integral part of marketing and fundraising for business, charities and causes. It is a potent tool for enabling businesses to achieve their marketing objectives while making a positive contribution to the communities on which they depend. Given this background, we later present the specific dynamics of CSR in action, by means of a tripartite case study, based in Cyprus and involving BMW, the national football association and a relatively unknown charity working in the field of drug rehabilitation. The specific issues addressed in the case included: BMW’s need to strengthen the cultural element of their core values
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and be innovative in their selected CRM approach; the need of Ayia Skepi (the proposed charity) in developing greater visibility and needed revenue to provide rehabilitative services by being associated with and sponsored by a reputable company. Third, there was a need for a delivery or promotional partner (in this case the Cyprus Football Association (CFA)) who, by means of specific championship matches, would also benefit by the initiative and – as an unintended corollary – draw closer to supporters, by means of allowing the CRM initiative to take place in major football matches at the close of the league season. Three parties, a tripartite relationship, all of whom benefitted through the adoption of, and involvement in, cause related marketing. First, however, we turn to a review of the literature in the CRM domain.
CAUSE-RELATED MARKETING
An increasing number of corporations seek to align CSR activities with their primary business motivations. The effort is placed on ‘marrying’ the corporate strategy of community involvement with social issues related to their business. CRM is a prime example of partnership formed between corporations and charities to raise both money and brand awareness. It lets companies ‘do well by doing good’. CSR is defined as ‘recognizing that companies have a responsibility to a range of stakeholder groups which include; customers, employees, suppliers, shareholders, the political arena, the broader community, [and] the environment’ (Adkins, 2005: 17). This definition is founded on the idea that corporations play an important role in society since they possess economic power and hence can profoundly impact the lives of individuals and communities. The CSR role carries with it responsibilities and duties. Meeting them can produce significant benefits to the business and society. The argument that businesses
are only responsible for meeting the needs and expectations of their shareholders is now anachronistic. It is only by giving weight to the interests of all stakeholders, that shareholder value can be assured and enhanced. CRM is one of a portfolio of activities that can be used to respond to stakeholders needs, enabling companies to contribute to the development of the societies in which they operate, as well as enabling creation of long-term benefits for the company and its brands. There has been growth and interest in CRM over the past few years. (see Fellman, 1999; Dupree, 2000; Kitchen and Schultz, 2001; Vallaster and de Chernatony, 2005; Berger et al., 2007). Dupree (2000) suggests that growth of interest in CRM is due to consumers’ growing social consciousness, whereas Fellman (1999) argues that companies are taking a more strategic approach to community involvement efforts, and are seeking ways of benefiting community organizations while simultaneously furthering company business goals. In fact, many of the world’s most admired corporations maintain a sustained commitment to various forms of CRM (see Demos, 2006). CRM may be viewed as a strategic positioning and marketing tool, which associates a company or brand with a relevant social cause or issue, for mutual benefit (Pringle and Thompson, 1999). It has been defined as ‘the public association of a for-profit organisation with a non-profit organisation, intended to promote the company’s products or services and to raise money’ (Polonsky and Macdonald, 2000; Demos, 2006). Business in the Community defines CRM as ‘a commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product or service for mutual benefit’. Traditionally, CRM was built on the following principle: buy a company’s product, and they will make a donation on your behalf to some noteworthy cause. Today,
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the concept has been enhanced and is used to refer to any marketing or corporate tie-in with a charity or cause (Harris and Whalen, 2006). CRM involves using marketing methods to support worthwhile causes while simultaneously seeking to build the business or its image and reputation. An organization promotes its image, product and services in conjunction with good causes, raising money for these and enhancing its reputation, demonstrating its values and enlisting consumer loyalty and purchase of its products and services (Adkins, 2005; Dowling, 2001; Pringle and Thompson, 2000). It seems that CRM can include many different ways in which businesses are able to benefit charities and good causes through partnerships that consist of donations, and additional support leveraged through customers, suppliers or employees. CRM offers potential to provide the means to use the power of the brand to publicly demonstrate a firm’s commitment to addressing the social issues of the day through providing resources and funding while simultaneously addressing their own business marketing and corporate objectives. In the case of a profit-making enterprise, the organization, brand, product or service may become stronger and more successful as a result of the relationship. In the case of the cause, benefits may involve creating more awareness for the cause and increased contributions to help fund the purpose of the cause. Thus, if CRM is handled effectively it can produce substantial benefits for both the corporation and the charitable organization. The corporation gains an effective marketing tool whereas building a more positive public image. The charitable organization gains greater visibility and important new sources of funding. However, CRM has stirred some controversy. Critics argue that CRM may eventually undercut traditional ‘no-strings’ corporate giving, as more firms will expect marketing benefits from their contributions. But does this really matter? After all businesses are
profit-making institutions. There is a thin line between increased sales and an enhanced corporate image and weak charges of exploitation. The key motive for business engagement in CRM is the mutual benefit to be derived from the partnership. For example, if a corporation launches community programmes that focus on creating awareness for issues, problems and causes related to the local community, it will be able to enhance its corporate image while the local community is materially benefited through donations in money, positive public relations (PR) and often employee experience and time. Critics also argue that CRM will lead to a growth in supporting more popular, visible and low-risk charities in order for corporations to gain more exposure at minimum risk. But this is how business is done in the marketplace; to seek maximize profit at an appropriate level of risk. CRM campaigns differ in nature, the types of non-profit partners and the relationships between companies and their marketing partners. Thus, at present there is no widely accepted implementation model for CRM. On the contrary, there is a plethora of implementation approaches, which may add ambiguity and uncertainty as to how corporations can adopt this initiative. However, this flexibility in implementing CRM offers potential to encourage businesses to adopt and practice it. Clearly, the important point is to ensure that stakeholders know about an organization’s values and its social responsibility stance. CRM can be an effective way of demonstrating CSR, by giving life to an organization’s values and beliefs and bringing them to the attention of stakeholder groups. Adkins (2005) suggest that CRM is a very public way of demonstrating corporate values and hence, adds to these. It can substantially impact brand value as well. It is important to bring words into life and to demonstrate values through action (Durgee et al., 1996), and to encourage
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stakeholders/audiences to believe these values are sustainable. Corporations may be challenged in using CRM as a contributor to successful business practice in that they need to identify the right charities and causes, form appropriate partnerships and then plan, implement and communicate shared values well. The present case shows how BMW in Cyprus attempted to meet this challenge. The case illustrates how BMW studied and used CRM in order to create awareness among key stakeholder groups in relation to its values, and introduce a new car model and benefit a needy charity in relation to a specific social cause.
The Research
The paper now presents and critically discusses a CRM campaign undertaken by BMW (Cyprus). It draws on the experiences and views of different individuals primarily working for the company in order to unveil the nature and scope of CRM, as well as the rationale for its adoption within the company. The data was collected via primary and secondary data sources. Secondary sources included analysis of promotional material related to the campaign such as presentations, promotional leaflets, television (TV) advertisements and press conferences. Primary information was collected through in-depth interviews with members of the charity and with the members of the organizing committee of the CRM campaign. In total, ten interviews were conducted with members of BMW (Cyprus) marketing department and five interviews with members of the charity’s organizing committee. Each recorded interview lasted for approximately one hour. The researchers did not use an interview guide but instead encouraged interviewees to share their perceptions and experiences regarding, for example, the rationale for the adoption of CRM, the nature of the CRM campaign and any emergent benefits. Qualitative data
analysis was carried out through the adoption of a grounded theory approach as the researchers approached the study with ‘open minds’; with no predetermined questions and no definitions (see Glaser and Strauss, 1967). Instead, they allowed participants to speak freely about CRM by drawing on their perceptions, expectations and experiences. The grounded theory approach is a qualitative research method that uses a systematic set of procedures to develop an inductively derived grounded theory about a phenomenon (ie CRM). Straus and Corbin (1990) identified procedures for analyzing and, in particular, for coding qualitative data. The systematic procedures adopted included use of open, axial and selective coding to generate and provisionally test various themes (ie CRM, corporate reputation) and relationships (ie CRM and corporate reputation, CRM and the launch of new products) and enabled the development of categories, associations and comparisons that led ultimately to the development of theory about the practice of CRM by BMW in Cyprus.
BMW’s CRM CAMPAIGN
In Spring 2005, BMW launched the ‘three’ series model in Cyprus. Their marketing strategy usually consists of two types of promotional activities: above- and belowthe-line. The first incorporates the use of TV and radio advertising and the second all the activities that do not directly incorporate advertising. The core promotional activity was the planning and launch of an event where the BMW dealer invited 4,000 people to attend and the new product introduced. The lead protagonist in the dealership stated: Our challenge was to launch the BMW 3 series in the Cyprus market as the sports sedan – setting the benchmark at an even higher level by offering unparalleled dynamics, premium substance and efficiency. We had to maximize
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the PR effect of our budget and not repeat what has already been done by us or the competition. We would like to give a different polish both to the brand and to this model … ideally we wanted to stress the ‘responsible’ side of our culture. (Marketing Manager and Head of the CRM campaign) The marketing team was thus determined not to repeat something that had been done before. The starting point for the campaign was BMW’s core values of Joy, Dynamism, Culture and Individuality. These values shaped the brand’s identity. However, the culture dimension was perceived to be weak and underdeveloped in the local market. There was a need to clarify and emphasize the central cultural values embraced by the company. This gave the team the rationale for designing and launching a campaign that would highlight BMW’s efforts to be seen as a socially responsible organization. There was a need to strengthen culture by demonstrating the company’s business and altruistic motives through making an investment in the local community. Some may argue that corporations should only pursue business motives. But, as was indicated in the literature review, it makes sound business sense to invest in the community since there are demonstrable benefits to both parties. This was the view shared by the firm’s management team. The team’s expectations were that the CRM strategy would enable them to demonstrate BMW values, create product awareness, build positive perceptions, increase loyalty and improve relationships among stakeholder groups. Although the marketing team identified three social problems faced by Cypriot society namely, drug abuse, cancer and traffic accidents, the area of drug abuse was considered to be somewhat neglected and in need of financial support and publicity. Several research studies carried out by government and private organizations revealed
that drug abuse was (and is) one of the most serious social problems in the country. The Cypriot government had launched a strong campaign on ‘Drink and Drive’. Also many private and public sector organizations support cancer research and cancer patients and their families. However, currently, Cypriot charities only receive S10,000 per annum from the government and have to rely heavily on donations and the work of volunteers. The BMW dealership decided to form a partnership and support Ayia Skepi, a charity supporting drug addicts in rehabilitation. Initially, there were some concerns among members of the marketing team since the word ‘drugs’ has negative connotations. The association of the BMW brand with drugs could negatively impact the company and its brand reputation and the efforts of the organization to raise money for this social cause could backfire. However, after careful consideration, the marketing team decided to go ahead and launch the campaign feeling confident that the potential positive impact would outweigh any negative associations. Ayia Skepi was formed when one of the most famous Monasteries in Cyprus was faced with an increasing number of drug addicts seeking support and help in 1999. The Greek Orthodox Church decided to create an organization whose members would work on a voluntary basis in order to help drug addicts in rehabilitation. When it was launched, the Church donated a piece of land on which to build a rehabilitation centre with money raised from donations. Ayia Skepi offers support to drug addicts who use ‘hard’ drugs such as heroine. The support takes the form of a team of psychologists who offer psychological support and guidance and rehabilitation programmes over a period of 12–18 months. During this time, addicts are not allowed to leave the centre for more than a day. Currently, there are over 60 people who have undergone
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the rehabilitation treatment successfully and have rejoined their communities. An interview with the vice-president of the charity revealed that partnership with such a reputable corporation as BMW was seen as a ‘blessing’ to the charity’s efforts to raise money to promote its cause. The charity is faced with an ongoing struggle to raise money to cover annual expenses, since the government’s allowance to charitable organizations is inadequate. Therefore, Ayia Skepi’s officials welcomed the collaboration with BMW and were keen to involve their resources – including volunteers – to ensure the success of the campaign. The charity’s officials and their associates were mostly involved in campaign implementation but not in the design and development stage, which was undertaken by the corporate partner. The charity’s main problem apart from fund raising is difficulty in creating awareness about the charity and its cause in the local community and nationwide, as well as getting people to adopt a more caring and supportive role. People tend to be skeptical, critical and even afraid when it comes to ‘drugs’. Drugs are a ‘taboo’ topic, a problem or disease that can happen to others but not to them. For them the collaboration with Char. Pilakoutas (the BMW dealer) provided opportunity for media exposure since it generated positive rather than negative publicity. The buzz created prior, during and after the CRM campaign was seen as a highly potent tool for creating awareness for the charity. At the same time, it was believed that CRM offered the opportunity for emotional and indeed the rational engagement and involvement of stakeholder groups such as employees and customers in a worthwhile cause. At the outset of the campaign, permission was needed from the headquarters of the BMW Group in Germany. This go ahead was given and headquarters executives suggested that this type of CRM initiative could be adopted by other BMW agents around the
world. The BMW Group has displayed significant commitment to social causes such as: • Increased road safety. • Promoting understanding among people and opposing violence. • Achieving increased recognition of highly gifted children and young people. • Educational projects in kindergarten and schools. • Creating understanding and mutual trust in communities where the company is located. • Fighting HIV/AIDS. The corporation has embraced these areas for its sociopolitical commitment because they reflect its corporate culture and goals (see: http:/ /www.bmwgroup.com). It is evident from the corporation’s web site that while BMW is not the primary sponsor of these activities, but its role is to initiate and launch its own projects. Among their social responsibility spectrum, BMW supports activities that are related to the physical environment, its employees, community relations and culture. As noted earlier, the desirable outcome for the campaign in Cyprus was to strengthen the ‘culture’ element of the corporate brand and at the same time create awareness and knowledge for the new product. These were the key objectives of the campaign. BMW had S50,000 available for the launch and promotion of a new product, a very low budget. However, the team decided to find a way to maximize the financial benefits for the charity and towards this end BMW donated a 320i to Ayia Skepi. The maximization of the financial gain for the charity became the third objective of the campaign. The next step was to get permission from the Cypriot government in order to issue raffle tickets to raffle the donated BMW. After many efforts and difficulties, the government gave permission to the charity but
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not to BMW to issue the raffle tickets. 75,000 raffle tickets were issued and BMW joined forces with the CFA, in promoting and selling the tickets. To promote the campaign, the Football Association decided to use the last two Cyprus 1st Division National Football Championship matches of the season of all teams in the league (a total of 14 football matches). Football tickets for these matches were sold at a higher price (S1.67 higher than the normal selling price) and extra revenue created by the price increase went directly to the charity. At the football matches, 320i cars were driven on the football pitch and there was live TV broadcasting of the cars being driven in the stadiums. The football association gained in two ways, by being involved in a worthwhile social cause, and by developing a form of communication which benefited a specific charity and in itself was a form of promotion and motivation for football supporters, who often wait before the start and half time periods of football games. The innovatory approach interested and involved the spectators at the aforesaid matches. What is unusual in this CRM campaign is that we have three partners: a corporate sponsor (BMW), a religious organization (Ayia Skepi ) and a socio/cultural organization (the CFA). Although the researchers were unable to interview a representative of the CFA, interviews held with BMW representatives and Ayia Skepi revealed that collaboration with the CFA was essential to successful implementation of the campaign. The marketing manager of BMW revealed that there was a need to find a partner to help promote the campaign. The football matches gave access to a large involved audience and this was essential for creating campaign awareness, as well as generating interest and encouraging participation. It enabled BMW to cut through the clutter of TV advertising, although TV advertising was one of the primary media used. The live
TV broadcasting of the football matches enhanced the percentage of people reached that belonged to the target audience of the campaign and the new product. The study revealed that coordination of the multiorganizational CRM effort required significant investment in terms of time, effort and negotiation but the end result made it all worthwhile. The CRM campaign, under the name ‘Value for Life’ was launched in April 2005 and its duration was six weeks (4 April, 2005–23 May, 2005). On the 4th of April 2005, the marketing team invited 51 journalists from the automotive, lifestyle and business press and representatives from all the Cypriot TV stations to a press conference in order to create awareness regarding the campaign. The press conference was organized at the BMW’s showroom in Nicosia (the capital of Cyprus). Clips from the videotaped press conference were then broadcast through TV stations. • An advertising campaign promoting the CRM campaign and the new 320i car was launched through a wide array of media. This included TV, newspapers and magazines (60 percent TV, 30 percent pressnational and local) and the remaining 10 percent was allocated to outdoor advertising in the form of posters, billboards and banners. Several national newspapers devoted front-page coverage to the campaign. • BMW gained permission from local municipalities to exhibit 320i cars in central locations such as town squares and art galleries in all the cities in which the campaign ran. Raffle tickets were also sold through the offices of the CFA, and the charity’s central offices. The selling points were supported by members of the charity and BMW personnel who worked on a voluntary basis. All the representatives of the campaign wore hats and t-shirts exhibiting the slogan of the campaign:
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‘Value for Life’. All selling points were also equipped with a banner promoting the campaign. • Publicity for the campaign was created by the local press which produced several articles praising the efforts of the corporation: ‘BMW 3 draw in aid of drugs rehab centre’, ‘Value for Life in the fight against drugs’ and ‘BMW dealer teams up with CFA in drugs fight’ reporting on several events that were integral parts of the campaign. • BMW permitted each raffle holder the opportunity to visit the BMW showroom and test drive the new 320i car. At the same time each prospective client taking a test drive was given a raffle ticket. Although at the beginning of the launch the key aim was to promote the new product, this gave way in turn to a determination to maximize benefits for the charity. Thus, it became the quest for all partners and participants including BMW employees and helped the initiative and focused employee fundraising and volunteering. This dynamic, which has a motivational and indeed an inspirational character, lies at the heart of CRM efforts. It does not necessarily characterize advertising or any other promotional effort undertaken by the company. So, why did this happen here? BMW’s management team realized from the outset of the campaign that there was a need to integrate social responsibility and community investment efforts across the organization in providing benefits to all parts of the business. It was seen as important to create awareness internally and thus internal communication was vital. To this end, meetings were organized in order to inform company employees who in their turn volunteered to sell tickets, be present at the football matches and work in rotation in supporting the selling points whenever possible. By the third week, 48,000 raffle
tickets had been sold. By the end of the campaign, the total number of tickets sold was 75,000, increasing the money raised to S128,145. All the partners claimed that the CRM campaign had produced benefits, which exceeded expectations. Stakeholders felt that the campaign had achieved both partnership and mutual benefit. This mutuality and joint ownership was important as it ensured that each side appreciated the contribution, strengths and weaknesses of the others in striving to achieve mutually agreed objectives. Employees gained a sense of pride in working for the cause and also felt they were meeting their own duties and responsibilities towards society.
The CRM Benefits The benefits to BMW:
• Enhanced corporate and brand reputation. The head of the marketing department claimed that: We believe that such activities have the potential to strengthen the company’s reputation … and in fact we have already received positive feedback from our customers, our agents, members of the public and our employees. The campaign has undoubtedly given the company a more ‘human’ face … it has brought us closer to society. • Created awareness and knowledge for the new product including more customer uptake. A member of BMW’s marketing team stated: The campaign has definitely created awareness for the new BMW series … the number of test drives were higher than ever before especially for a new car. And if the company can benefit
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others whilst generating sales for its products then this is the way forward. • Improved the firm’s standing in relation to competitors. In the luxury car sector … competition is aggressive and we have very little to differentiate ourselves from our rivals. I strongly believe that such positive CRM campaigns enhance our reputation and set us apart from our competitors. Although we do not have any hard data … if the public can associate the firm with such causes in a positive way as is the case here then we can be ranked first in terms of corporate reputation. (a member of the BMW marketing team) • Increased staff morale and creation of a greater sense of camaraderie among employees. The campaign has united in common cause. It has established a sense of camaraderie, increased teamwork, and has definitely improved the quality of the work environment. (another member of the BMW marketing team) • Reinforced the organization’s core values.
The benefits gained by the charity:
• To date they have raised nearly S125,000. • Greatly increased the visibility and publicity for the charity and its associated cause. • Opened up new vistas and horizons for potential partnerships. • Established an ongoing cooperation with Char. Pilakoutas the BMW Cyprus dealer. The ‘Value for Life’ CRM campaign is currently in its third year (2010). It has been been successfully utilized for the BMW 316i introduction and new Mini Cooper models and has successfully raised money and awareness for Ayia Skepi while simultaneously benefiting corporate reputation.
Benefits to society:
On the basis of the interviewee responses of both the company and the charity participants, the campaign has increased awareness regarding a serious social problems, drug addiction. It was also perceived that the CRM effort was successful in motivating the general public to assist in the efforts of the charity to help drug addicts undergoing rehabilitation treatment through the donation of money.
Benefits to the Football Association:
The ‘Value for Life’ campaign has strengthened the culture of our organization. It has enhanced our corporate values and we know that it is important to the management, our staff and our customers that we demonstrate our CSR by making a positive impact on the local community. Ever since 2005, every introduction of a new car model is linked to the campaign … for example the 316i, and the Mini Cooper. The campaign has reinforced both company and staff support for Ayia Skepi. (Marketing Manager of Char. Pilakoutas)
Though not directly researched, as indicated earlier the Football Association gained knowledge and understanding of a new form of promotional and cause related marketing. Their involvement, use of the BMW cars in quiet times during the game, sale of raffle tickets and a minor price premium, in this case, helped underpin a positive image for the Association and indeed the stadium where the matches took place. Such experience, especially when positive outcomes ensued, would be utilized in subsequent seasons, and of course can be extended to other major branded companies and other social causes.
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Thus, a number of advantages were associated with the tripartite effort that formed the foundation for this CRM strategy the most important of which is the increased number of human resources (volunteers and participants), which subsequently increased the promotional effort, exposure and of course the impact of the campaign. However, there were also a number of difficulties and challenges that made the overall effort more problematic, as difficulties in coordinating the communicational and promotional effort, as well as the overall CRM program was encountered. These, however, were overcome. Although not researched to the same degree or extent, the fact that this tripartite relationship continued is indicative of a CSR initiative that ‘worked’ for several years, benefitting all participants. Although somewhat speculative, perhaps even good CSR initiatives and programs such as the case given here may need to be revamped, readjusted and renewed, as social causes change, and indeed as environmental circumstances change and other social causes and issues come to the fore, which are relevant to brand organizations. In this case, BMW was the primary mover of the activity. But it is not unreasonable to suggest that CRM may be triggered by those involved in the social cause approaching branded companies. There is nothing to countermand the idea that while most CRM initiatives involve dual partners, a tripartite approach may not be unusual and could involve multiple partners. Thus, we anticipative such initiatives taking place on a wider scale or platform, with much greater budgets and involving a multiplicity of partners.
CONCLUSION AND MANAGERIAL IMPLICATIONS
Specifically, the case shows that the BMW dealer in Cyprus utilized and is still utilizing CRM as a highly potent tool for achieving marketing and corporate objectives, as well
as a significant contributor in addressing an important social issue together with the needs of a local charity. The CRM campaign launched by the dealer demonstrates the convergence of several socio-cultural themes for example religion, football, the fight against drugs and a powerful brand such as BMW. CRM worked by integrating the core trading objectives and activities of the business with the needs of the particular cause or charity. The study shows that CRM has the potential to deliver greater benefits per pounds spent by achieving a wide range of business, marketing and social benefits. These include building and enhancing corporate and brand reputation, differentiating the brand, building relationships and loyalty, demonstrating the organization’s values, developing morale and increasing sales and income. In the case, the dealer used CRM in order to demonstrate and communicate to stakeholders its value of good corporate citizenship, introduce a new car model in the local market and then extend to subsequent new models and create awareness for a social problem while raising money for a local charity. The case illustrated that in order for CRM to deliver expected benefits there is a need to integrate it in the overall marketing mix used alongside the more traditional tools such as advertising and PR and view it as an integral part of the long-term strategy of the corporation. The essence of the marketing approach here is to associate the cause selected with one or more of the core values of the organization. Clearly, a good match is important, as the case demonstrates. Using a third organization as a means of bringing together messages concerning the cause and the product on offer to the attention of the desired audience can also be beneficial. In the present case study, football matches were gatherings where various messages about the product, the cause and customer involvement via donations could be communicated with excellent effect.
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In a more general sense, it it evident that as customers and stakeholders become increasingly demanding of business, as society sets higher moral expectations of business and as marketing noise, clutter and competition increase, it will be increasingly important to develop stronger relationships with stakeholders. CRM has the potential to provide opportunities because it can portray emotional commitment and moral engagement of companies with specific societal needs in relation to stakeholder groups and hence in our view will continue to grow in importance as a marketing tool. In essence, CRM has the potential to maximize the impact of the firm’s marketing strategy and can deliver benefits for the business, the community and society as a whole. It is a relatively inexpensive way of creating awareness of brands, products and companies, but at the same time is likely to be viewed with enthusiasm by organizational stakeholders since it offers considerable societal value to the parties involved.
Acknowledgments
We express appreciation to the Editor and the two anonymous reviewers for their critical comments and helpful advice. These have helped improve the paper markedly.
REFERENCES
Adkins, S. (2005) Cause Related Marketing: Who Cares Wins, Butterworth Heinemann, Oxford, UK. Berger, I.E., Cunningham, P. and Drumwright, M.E. (2007) ‘Mainstreaming CSR: Developing markets for virtue’, California Management Review, 49(44), 132–157. Chong, M. (2007) ‘The role of internal communication and training in infusing corporate values and deliver-
ing brand promise: Singapore airlines experience’, Corporate Reputation Review, 10(3), 201–213. Demos, T. (2006) ‘The world’s most admired companies’, Fortune, 153(4), 33–42. Dowling, G. (2001) Creating Corporate Reputation: Image and Promise, Oxford University Press, Oxford, USA. Dupree, J. (2000) ‘Review of Brand Spirit: how cause related marketing builds brands’, in H. Pringle and M. Thompson (eds), Journal of Consumer Marketing, 17(5), 461–464. Durgee, J., O’Connar, G. and Veryzer, R. (1996) ‘Observations, translating values into product wants’, Journal of Advertising Research, 36(6), 90–99. Fellman, M.W. (1999) ‘Cause related marketing takes a strategic view’, Marketing News, 26 April, p. 4. Glaser, B.G. and Strauss, A.L. (1967) The Discovery of Grounded Theory: Strategies for Qualitative Research, Aldine, Chicago, IL. Harris, T.L. and Whalen, P.T. (2006) The Marketer’s Guide to Public Relations in the 21st Century, Thomson Higher Education, Mason, OH. Kitchen, P.J. and Schultz, D.E. (2001) Raising the Corporate Umbrella: Corporate Communications in the 21st Century, Palgrave-Macmillan, Basingstoke, UK. Kotler, P. and Lee, N. (2005) Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause, John Wiley and Sons, Hoboken, NJ. Polonsky, M.J. and MacDonald, E.K. (2000) ‘Exploring the link between cause-related marketing and brand building’, International Journal of Non-profit and Voluntary Sector Marketing, 5, 46–57. Pringle, H. and Thompson, M. (1999) Brand Spiritl: How Cause Related Marketing Builds Brands, John Wiley & Sons, Chichester, UK. Pringle, H. and Thompson, M. (2000) ‘Brand soul: How cause related marketing builds brands’, in R. Earl (ed.), The Art of Cause Related Marketing, NTC, Lincoln wood, IL. Strauss, A.L. and Corbin, J. (1990) Basics of Qualitative Research: Grounded Theory Procedures and Techniques, Sage. Vallaster, C. and de Chernatony, L. (2005) ‘Internationalisation of service brands: The role of leadership during the internal branding process’, Journal of Marketing Management, 21(2), 181–203.
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Volume 14 Number 1
Cause Related Marketing: Developing a Tripartite Approach with BMW
Ioanna Papasolomou Marketing Department, School of Business Administration, University of Nicosia, Nicosia, Cyprus Philip J. Kitchen Faculty of Business, Brock University, St Catharines, Ontario, Canada
ABSTRACT
In today’s fiercely competitive world, cause related marketing (CRM) plays an important role in business. It is seen as an effective way to build brands, create product awareness, revitalize corporate values and make corporate social responsibility and community involvement visible. It has proven to be an important marketing tool and offers valuable contributions in addressing corporate needs in the context of societal issues and the related needs of charities and causes. CRM is implemented by juxtaposing the strategic objectives of a business with traditional marketing communication tools in association with the needs and objectives of a specific charity or social cause. In fact, CRM is among the most popular forms of corporate giving. It provides the means to use the power of a brand to publicly demonstrate a firm’s commitment in addressing some (or a) social issues of the day while simultaneously seeking to achieve marketing and corporate objectives such as new product introduction, increasing sales or building reputation within a local or national market. Each of these may be taken as a general or specific objective in implementing CRM in particular contextual circumstances. Thus, outcomes underpin CRM’s application specifically in a given geographic brand associated context, while general outcomes underpin CRM’s application in wider and potentially different brand or indeed geographic
circumstances. This paper discusses the efforts of BMW (Cyprus) in working toward the above objectives and highlights a partnership with the Cyprus Football Association in supporting a charitable organization in the fight against drug addiction while creating product and brand awareness regarding the 320i model in the national market that is, a specific contextual applicatory analysis. The outcomes show that CRM can be a very effective way of enabling a firm and its employees to display and live up to their corporate values (Chong; Kitchen and Schultz) and communicate these to key stakeholder groups such as customers, the local community and society at large. Thus, BMW (Cyprus) successfully used CRM as a strategy and a promotional tactic to underpin brand awareness and develop a new product, while simultaneously enhancing corporate reputation by highlighting its cultural values. Corporate Reputation Review (2011) 14, 63–75. doi:10.1057/crr.2011.1
KEYWORDS:
BMW; cause related marketing (CRM); corporate social responsibility (CSR); corporate values; Cyprus; new products
INTRODUCTION
In today’s fiercely competitive global markets, and in a time of economic turbulence, consumer requirements of companies and
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their brands go beyond practical issues of product quality, performance and image. Consumers are questioning the role of business in society and are interested in company involvement in society, the ways in which this involvement is portrayed via communication and any accompanying societal benefits. Undoubtedly, profitmaking corporate entities exist to serve their stakeholder interests. Such interests extend, however, in the 21st century to more than the bottom line, and return on shareholder investment. Corporate reputation and image are key elements in communicating with stakeholders in a given context. Thus, many corporations now appear to be committed to corporate social responsibility (CSR). Of course, CSR and profitability are not mutually incompatible. Increasingly stringent legislation and stakeholder activism are key drivers of corporate behaviour and communication. Of necessity, organizations need to communicate a range of activities to satisfy increased expectations and demands. These activities include compliance with environmental and social legislation, cause related marketing (CRM), corporate giving to causes and charities, as well as the desire to conduct business in ways that appear to be accountable and transparent, and contribute something worthwhile to society. CRM merits close attention as it is increasingly used by corporations in an effort to engage with their stakeholders, communicate corporate values and promote corporate brand identity as much as (if not more than) traditional marketing communications activities. In a general sense, CSR offers wide scope for innovative programmes that fall under the umbrella of CRM. Well-known examples of successful CRM campaigns which are first glance do not seem to include shareholder interests, include: • the American Express campaign to restore the Statue of Liberty;
• Tesco, the UK supermarket giant, in funding the provision of computers for schools through customers’ spending; • Liverpool Football Club working in collaboration with Liverpool City Council to create a range of programmes to promote healthy living in one of Britain’s poorest areas; • Avon’s Breast Cancer Awareness Campaign which was launched in different countries around the world; and • BT’s (major international telecommunication provider) support of Childline, which has raised over UK£6 m since late 2002 in support of vulnerable children (see: http:/ /www.bitc.org.uk). The literature thus reveals wide diversity in terms of CRM practices and corporate interests in response to what are considered to be organizationally appropriate or cognate social problems and issues. Note that in some cases above there is an immediately demonstrable and direct relationship between the CRM initiative and the company, whereas in others the relationship is more indirect and amorphous. Thus, one cannot find a holy grail of best practice, as such practice is evolutionary in the environmental and marketing circumstances in which businesses are located. As might be expected there is significant variation across Europe and the rest of the world in the forms and the apparent directionality of CRM approaches. However, most CRM campaigns have some typical components (see Kotler and Lee, 2005) which may include: • A specified currency amount for each product sold. • A percentage of the sales of a product or transaction pledged to a charity. • The company matches the contributions related to product related items. • A percentage of net profits from sales of a product or products is pledged.
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• The initiative may be for a specific time frame, or continue over many years. • Offers may relate only to specifically designated products, or more generally to a corporation. • Or, there may be no apparent product offer, just the general sense that company x is involved in a specific local (national) cause which is important to the community and may bring about social benefits. The extant literature also concurs – mainly in the form of case studies (see Chong, 2007) – in relation to benefits that accrue to corporations from successful CRM campaigns. These include: attracting new customers, increasing product sales, creating and sustaining a positive brand identity (Kotler and Lee, 2005); enhancing corporate image, differentiating products and organizations, increasing brand loyalty and sales (Adkins, 2005); motivating employees and teams, bringing business values to life, building relationships and loyalty, adding value, demonstrating organizational values and enhancing reputation and profile (Adkins, 2005; Berger et al., 2007; Dowling, 2001). What is also common in the literature is that most organizations are motivated by several factors in undertaking social responsibility programmes. These include: the rise of consumerism, the heightening of public awareness of environmental and ethical issues, the pressure of organized activist and pressure groups and increased understanding that competitive advantage depends as much upon reputation as upon products or prices. Advertising clutter and consumer disinterest also mean that organizations have to now find new ways to motivate consumers and retain brand loyalties. Moreover, managers of CSR programs recognize the duties and responsibilities that companies have to the wider community and seek to contribute to the common good by benefiting both parties. Socially responsible corporate behaviour implies not only complying with relevant
legislation but also investing in human capital, the physical environment and in relationships with stakeholder groups. Each corporation involved in CSR and CRM activities are involved in their own way according to their core competencies, available resources and stakeholder interests, but always in the context of their cultural values and hopefully in line with the traditions of the country or environment in which they operate. However, sometimes CRM approaches and practices fail to meet public expectations, and of course accusations can be leveled that such activities are not entirely altruistic. For example, firms are often accused of promoting self-interested motives such as seeking to maximize long-term profit, enhancing corporate image and community relations and complementing promotional efforts. As indicated previously, however, the goals of business and society are not mutually inimical. The success of CRM relies on important factors such as: the identification of an appropriate cause which ideally relates to corporate values, clarity in relation to campaign objectives, long-term focus and commitment, effective communication and continuous cooperation between involved partners and ongoing monitoring and evaluation. CRM is increasingly being viewed as an integral part of marketing and fundraising for business, charities and causes. It is a potent tool for enabling businesses to achieve their marketing objectives while making a positive contribution to the communities on which they depend. Given this background, we later present the specific dynamics of CSR in action, by means of a tripartite case study, based in Cyprus and involving BMW, the national football association and a relatively unknown charity working in the field of drug rehabilitation. The specific issues addressed in the case included: BMW’s need to strengthen the cultural element of their core values
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and be innovative in their selected CRM approach; the need of Ayia Skepi (the proposed charity) in developing greater visibility and needed revenue to provide rehabilitative services by being associated with and sponsored by a reputable company. Third, there was a need for a delivery or promotional partner (in this case the Cyprus Football Association (CFA)) who, by means of specific championship matches, would also benefit by the initiative and – as an unintended corollary – draw closer to supporters, by means of allowing the CRM initiative to take place in major football matches at the close of the league season. Three parties, a tripartite relationship, all of whom benefitted through the adoption of, and involvement in, cause related marketing. First, however, we turn to a review of the literature in the CRM domain.
CAUSE-RELATED MARKETING
An increasing number of corporations seek to align CSR activities with their primary business motivations. The effort is placed on ‘marrying’ the corporate strategy of community involvement with social issues related to their business. CRM is a prime example of partnership formed between corporations and charities to raise both money and brand awareness. It lets companies ‘do well by doing good’. CSR is defined as ‘recognizing that companies have a responsibility to a range of stakeholder groups which include; customers, employees, suppliers, shareholders, the political arena, the broader community, [and] the environment’ (Adkins, 2005: 17). This definition is founded on the idea that corporations play an important role in society since they possess economic power and hence can profoundly impact the lives of individuals and communities. The CSR role carries with it responsibilities and duties. Meeting them can produce significant benefits to the business and society. The argument that businesses
are only responsible for meeting the needs and expectations of their shareholders is now anachronistic. It is only by giving weight to the interests of all stakeholders, that shareholder value can be assured and enhanced. CRM is one of a portfolio of activities that can be used to respond to stakeholders needs, enabling companies to contribute to the development of the societies in which they operate, as well as enabling creation of long-term benefits for the company and its brands. There has been growth and interest in CRM over the past few years. (see Fellman, 1999; Dupree, 2000; Kitchen and Schultz, 2001; Vallaster and de Chernatony, 2005; Berger et al., 2007). Dupree (2000) suggests that growth of interest in CRM is due to consumers’ growing social consciousness, whereas Fellman (1999) argues that companies are taking a more strategic approach to community involvement efforts, and are seeking ways of benefiting community organizations while simultaneously furthering company business goals. In fact, many of the world’s most admired corporations maintain a sustained commitment to various forms of CRM (see Demos, 2006). CRM may be viewed as a strategic positioning and marketing tool, which associates a company or brand with a relevant social cause or issue, for mutual benefit (Pringle and Thompson, 1999). It has been defined as ‘the public association of a for-profit organisation with a non-profit organisation, intended to promote the company’s products or services and to raise money’ (Polonsky and Macdonald, 2000; Demos, 2006). Business in the Community defines CRM as ‘a commercial activity by which businesses and charities or causes form a partnership with each other to market an image, product or service for mutual benefit’. Traditionally, CRM was built on the following principle: buy a company’s product, and they will make a donation on your behalf to some noteworthy cause. Today,
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the concept has been enhanced and is used to refer to any marketing or corporate tie-in with a charity or cause (Harris and Whalen, 2006). CRM involves using marketing methods to support worthwhile causes while simultaneously seeking to build the business or its image and reputation. An organization promotes its image, product and services in conjunction with good causes, raising money for these and enhancing its reputation, demonstrating its values and enlisting consumer loyalty and purchase of its products and services (Adkins, 2005; Dowling, 2001; Pringle and Thompson, 2000). It seems that CRM can include many different ways in which businesses are able to benefit charities and good causes through partnerships that consist of donations, and additional support leveraged through customers, suppliers or employees. CRM offers potential to provide the means to use the power of the brand to publicly demonstrate a firm’s commitment to addressing the social issues of the day through providing resources and funding while simultaneously addressing their own business marketing and corporate objectives. In the case of a profit-making enterprise, the organization, brand, product or service may become stronger and more successful as a result of the relationship. In the case of the cause, benefits may involve creating more awareness for the cause and increased contributions to help fund the purpose of the cause. Thus, if CRM is handled effectively it can produce substantial benefits for both the corporation and the charitable organization. The corporation gains an effective marketing tool whereas building a more positive public image. The charitable organization gains greater visibility and important new sources of funding. However, CRM has stirred some controversy. Critics argue that CRM may eventually undercut traditional ‘no-strings’ corporate giving, as more firms will expect marketing benefits from their contributions. But does this really matter? After all businesses are
profit-making institutions. There is a thin line between increased sales and an enhanced corporate image and weak charges of exploitation. The key motive for business engagement in CRM is the mutual benefit to be derived from the partnership. For example, if a corporation launches community programmes that focus on creating awareness for issues, problems and causes related to the local community, it will be able to enhance its corporate image while the local community is materially benefited through donations in money, positive public relations (PR) and often employee experience and time. Critics also argue that CRM will lead to a growth in supporting more popular, visible and low-risk charities in order for corporations to gain more exposure at minimum risk. But this is how business is done in the marketplace; to seek maximize profit at an appropriate level of risk. CRM campaigns differ in nature, the types of non-profit partners and the relationships between companies and their marketing partners. Thus, at present there is no widely accepted implementation model for CRM. On the contrary, there is a plethora of implementation approaches, which may add ambiguity and uncertainty as to how corporations can adopt this initiative. However, this flexibility in implementing CRM offers potential to encourage businesses to adopt and practice it. Clearly, the important point is to ensure that stakeholders know about an organization’s values and its social responsibility stance. CRM can be an effective way of demonstrating CSR, by giving life to an organization’s values and beliefs and bringing them to the attention of stakeholder groups. Adkins (2005) suggest that CRM is a very public way of demonstrating corporate values and hence, adds to these. It can substantially impact brand value as well. It is important to bring words into life and to demonstrate values through action (Durgee et al., 1996), and to encourage
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stakeholders/audiences to believe these values are sustainable. Corporations may be challenged in using CRM as a contributor to successful business practice in that they need to identify the right charities and causes, form appropriate partnerships and then plan, implement and communicate shared values well. The present case shows how BMW in Cyprus attempted to meet this challenge. The case illustrates how BMW studied and used CRM in order to create awareness among key stakeholder groups in relation to its values, and introduce a new car model and benefit a needy charity in relation to a specific social cause.
The Research
The paper now presents and critically discusses a CRM campaign undertaken by BMW (Cyprus). It draws on the experiences and views of different individuals primarily working for the company in order to unveil the nature and scope of CRM, as well as the rationale for its adoption within the company. The data was collected via primary and secondary data sources. Secondary sources included analysis of promotional material related to the campaign such as presentations, promotional leaflets, television (TV) advertisements and press conferences. Primary information was collected through in-depth interviews with members of the charity and with the members of the organizing committee of the CRM campaign. In total, ten interviews were conducted with members of BMW (Cyprus) marketing department and five interviews with members of the charity’s organizing committee. Each recorded interview lasted for approximately one hour. The researchers did not use an interview guide but instead encouraged interviewees to share their perceptions and experiences regarding, for example, the rationale for the adoption of CRM, the nature of the CRM campaign and any emergent benefits. Qualitative data
analysis was carried out through the adoption of a grounded theory approach as the researchers approached the study with ‘open minds’; with no predetermined questions and no definitions (see Glaser and Strauss, 1967). Instead, they allowed participants to speak freely about CRM by drawing on their perceptions, expectations and experiences. The grounded theory approach is a qualitative research method that uses a systematic set of procedures to develop an inductively derived grounded theory about a phenomenon (ie CRM). Straus and Corbin (1990) identified procedures for analyzing and, in particular, for coding qualitative data. The systematic procedures adopted included use of open, axial and selective coding to generate and provisionally test various themes (ie CRM, corporate reputation) and relationships (ie CRM and corporate reputation, CRM and the launch of new products) and enabled the development of categories, associations and comparisons that led ultimately to the development of theory about the practice of CRM by BMW in Cyprus.
BMW’s CRM CAMPAIGN
In Spring 2005, BMW launched the ‘three’ series model in Cyprus. Their marketing strategy usually consists of two types of promotional activities: above- and belowthe-line. The first incorporates the use of TV and radio advertising and the second all the activities that do not directly incorporate advertising. The core promotional activity was the planning and launch of an event where the BMW dealer invited 4,000 people to attend and the new product introduced. The lead protagonist in the dealership stated: Our challenge was to launch the BMW 3 series in the Cyprus market as the sports sedan – setting the benchmark at an even higher level by offering unparalleled dynamics, premium substance and efficiency. We had to maximize
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the PR effect of our budget and not repeat what has already been done by us or the competition. We would like to give a different polish both to the brand and to this model … ideally we wanted to stress the ‘responsible’ side of our culture. (Marketing Manager and Head of the CRM campaign) The marketing team was thus determined not to repeat something that had been done before. The starting point for the campaign was BMW’s core values of Joy, Dynamism, Culture and Individuality. These values shaped the brand’s identity. However, the culture dimension was perceived to be weak and underdeveloped in the local market. There was a need to clarify and emphasize the central cultural values embraced by the company. This gave the team the rationale for designing and launching a campaign that would highlight BMW’s efforts to be seen as a socially responsible organization. There was a need to strengthen culture by demonstrating the company’s business and altruistic motives through making an investment in the local community. Some may argue that corporations should only pursue business motives. But, as was indicated in the literature review, it makes sound business sense to invest in the community since there are demonstrable benefits to both parties. This was the view shared by the firm’s management team. The team’s expectations were that the CRM strategy would enable them to demonstrate BMW values, create product awareness, build positive perceptions, increase loyalty and improve relationships among stakeholder groups. Although the marketing team identified three social problems faced by Cypriot society namely, drug abuse, cancer and traffic accidents, the area of drug abuse was considered to be somewhat neglected and in need of financial support and publicity. Several research studies carried out by government and private organizations revealed
that drug abuse was (and is) one of the most serious social problems in the country. The Cypriot government had launched a strong campaign on ‘Drink and Drive’. Also many private and public sector organizations support cancer research and cancer patients and their families. However, currently, Cypriot charities only receive S10,000 per annum from the government and have to rely heavily on donations and the work of volunteers. The BMW dealership decided to form a partnership and support Ayia Skepi, a charity supporting drug addicts in rehabilitation. Initially, there were some concerns among members of the marketing team since the word ‘drugs’ has negative connotations. The association of the BMW brand with drugs could negatively impact the company and its brand reputation and the efforts of the organization to raise money for this social cause could backfire. However, after careful consideration, the marketing team decided to go ahead and launch the campaign feeling confident that the potential positive impact would outweigh any negative associations. Ayia Skepi was formed when one of the most famous Monasteries in Cyprus was faced with an increasing number of drug addicts seeking support and help in 1999. The Greek Orthodox Church decided to create an organization whose members would work on a voluntary basis in order to help drug addicts in rehabilitation. When it was launched, the Church donated a piece of land on which to build a rehabilitation centre with money raised from donations. Ayia Skepi offers support to drug addicts who use ‘hard’ drugs such as heroine. The support takes the form of a team of psychologists who offer psychological support and guidance and rehabilitation programmes over a period of 12–18 months. During this time, addicts are not allowed to leave the centre for more than a day. Currently, there are over 60 people who have undergone
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the rehabilitation treatment successfully and have rejoined their communities. An interview with the vice-president of the charity revealed that partnership with such a reputable corporation as BMW was seen as a ‘blessing’ to the charity’s efforts to raise money to promote its cause. The charity is faced with an ongoing struggle to raise money to cover annual expenses, since the government’s allowance to charitable organizations is inadequate. Therefore, Ayia Skepi’s officials welcomed the collaboration with BMW and were keen to involve their resources – including volunteers – to ensure the success of the campaign. The charity’s officials and their associates were mostly involved in campaign implementation but not in the design and development stage, which was undertaken by the corporate partner. The charity’s main problem apart from fund raising is difficulty in creating awareness about the charity and its cause in the local community and nationwide, as well as getting people to adopt a more caring and supportive role. People tend to be skeptical, critical and even afraid when it comes to ‘drugs’. Drugs are a ‘taboo’ topic, a problem or disease that can happen to others but not to them. For them the collaboration with Char. Pilakoutas (the BMW dealer) provided opportunity for media exposure since it generated positive rather than negative publicity. The buzz created prior, during and after the CRM campaign was seen as a highly potent tool for creating awareness for the charity. At the same time, it was believed that CRM offered the opportunity for emotional and indeed the rational engagement and involvement of stakeholder groups such as employees and customers in a worthwhile cause. At the outset of the campaign, permission was needed from the headquarters of the BMW Group in Germany. This go ahead was given and headquarters executives suggested that this type of CRM initiative could be adopted by other BMW agents around the
world. The BMW Group has displayed significant commitment to social causes such as: • Increased road safety. • Promoting understanding among people and opposing violence. • Achieving increased recognition of highly gifted children and young people. • Educational projects in kindergarten and schools. • Creating understanding and mutual trust in communities where the company is located. • Fighting HIV/AIDS. The corporation has embraced these areas for its sociopolitical commitment because they reflect its corporate culture and goals (see: http:/ /www.bmwgroup.com). It is evident from the corporation’s web site that while BMW is not the primary sponsor of these activities, but its role is to initiate and launch its own projects. Among their social responsibility spectrum, BMW supports activities that are related to the physical environment, its employees, community relations and culture. As noted earlier, the desirable outcome for the campaign in Cyprus was to strengthen the ‘culture’ element of the corporate brand and at the same time create awareness and knowledge for the new product. These were the key objectives of the campaign. BMW had S50,000 available for the launch and promotion of a new product, a very low budget. However, the team decided to find a way to maximize the financial benefits for the charity and towards this end BMW donated a 320i to Ayia Skepi. The maximization of the financial gain for the charity became the third objective of the campaign. The next step was to get permission from the Cypriot government in order to issue raffle tickets to raffle the donated BMW. After many efforts and difficulties, the government gave permission to the charity but
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not to BMW to issue the raffle tickets. 75,000 raffle tickets were issued and BMW joined forces with the CFA, in promoting and selling the tickets. To promote the campaign, the Football Association decided to use the last two Cyprus 1st Division National Football Championship matches of the season of all teams in the league (a total of 14 football matches). Football tickets for these matches were sold at a higher price (S1.67 higher than the normal selling price) and extra revenue created by the price increase went directly to the charity. At the football matches, 320i cars were driven on the football pitch and there was live TV broadcasting of the cars being driven in the stadiums. The football association gained in two ways, by being involved in a worthwhile social cause, and by developing a form of communication which benefited a specific charity and in itself was a form of promotion and motivation for football supporters, who often wait before the start and half time periods of football games. The innovatory approach interested and involved the spectators at the aforesaid matches. What is unusual in this CRM campaign is that we have three partners: a corporate sponsor (BMW), a religious organization (Ayia Skepi ) and a socio/cultural organization (the CFA). Although the researchers were unable to interview a representative of the CFA, interviews held with BMW representatives and Ayia Skepi revealed that collaboration with the CFA was essential to successful implementation of the campaign. The marketing manager of BMW revealed that there was a need to find a partner to help promote the campaign. The football matches gave access to a large involved audience and this was essential for creating campaign awareness, as well as generating interest and encouraging participation. It enabled BMW to cut through the clutter of TV advertising, although TV advertising was one of the primary media used. The live
TV broadcasting of the football matches enhanced the percentage of people reached that belonged to the target audience of the campaign and the new product. The study revealed that coordination of the multiorganizational CRM effort required significant investment in terms of time, effort and negotiation but the end result made it all worthwhile. The CRM campaign, under the name ‘Value for Life’ was launched in April 2005 and its duration was six weeks (4 April, 2005–23 May, 2005). On the 4th of April 2005, the marketing team invited 51 journalists from the automotive, lifestyle and business press and representatives from all the Cypriot TV stations to a press conference in order to create awareness regarding the campaign. The press conference was organized at the BMW’s showroom in Nicosia (the capital of Cyprus). Clips from the videotaped press conference were then broadcast through TV stations. • An advertising campaign promoting the CRM campaign and the new 320i car was launched through a wide array of media. This included TV, newspapers and magazines (60 percent TV, 30 percent pressnational and local) and the remaining 10 percent was allocated to outdoor advertising in the form of posters, billboards and banners. Several national newspapers devoted front-page coverage to the campaign. • BMW gained permission from local municipalities to exhibit 320i cars in central locations such as town squares and art galleries in all the cities in which the campaign ran. Raffle tickets were also sold through the offices of the CFA, and the charity’s central offices. The selling points were supported by members of the charity and BMW personnel who worked on a voluntary basis. All the representatives of the campaign wore hats and t-shirts exhibiting the slogan of the campaign:
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‘Value for Life’. All selling points were also equipped with a banner promoting the campaign. • Publicity for the campaign was created by the local press which produced several articles praising the efforts of the corporation: ‘BMW 3 draw in aid of drugs rehab centre’, ‘Value for Life in the fight against drugs’ and ‘BMW dealer teams up with CFA in drugs fight’ reporting on several events that were integral parts of the campaign. • BMW permitted each raffle holder the opportunity to visit the BMW showroom and test drive the new 320i car. At the same time each prospective client taking a test drive was given a raffle ticket. Although at the beginning of the launch the key aim was to promote the new product, this gave way in turn to a determination to maximize benefits for the charity. Thus, it became the quest for all partners and participants including BMW employees and helped the initiative and focused employee fundraising and volunteering. This dynamic, which has a motivational and indeed an inspirational character, lies at the heart of CRM efforts. It does not necessarily characterize advertising or any other promotional effort undertaken by the company. So, why did this happen here? BMW’s management team realized from the outset of the campaign that there was a need to integrate social responsibility and community investment efforts across the organization in providing benefits to all parts of the business. It was seen as important to create awareness internally and thus internal communication was vital. To this end, meetings were organized in order to inform company employees who in their turn volunteered to sell tickets, be present at the football matches and work in rotation in supporting the selling points whenever possible. By the third week, 48,000 raffle
tickets had been sold. By the end of the campaign, the total number of tickets sold was 75,000, increasing the money raised to S128,145. All the partners claimed that the CRM campaign had produced benefits, which exceeded expectations. Stakeholders felt that the campaign had achieved both partnership and mutual benefit. This mutuality and joint ownership was important as it ensured that each side appreciated the contribution, strengths and weaknesses of the others in striving to achieve mutually agreed objectives. Employees gained a sense of pride in working for the cause and also felt they were meeting their own duties and responsibilities towards society.
The CRM Benefits The benefits to BMW:
• Enhanced corporate and brand reputation. The head of the marketing department claimed that: We believe that such activities have the potential to strengthen the company’s reputation … and in fact we have already received positive feedback from our customers, our agents, members of the public and our employees. The campaign has undoubtedly given the company a more ‘human’ face … it has brought us closer to society. • Created awareness and knowledge for the new product including more customer uptake. A member of BMW’s marketing team stated: The campaign has definitely created awareness for the new BMW series … the number of test drives were higher than ever before especially for a new car. And if the company can benefit
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others whilst generating sales for its products then this is the way forward. • Improved the firm’s standing in relation to competitors. In the luxury car sector … competition is aggressive and we have very little to differentiate ourselves from our rivals. I strongly believe that such positive CRM campaigns enhance our reputation and set us apart from our competitors. Although we do not have any hard data … if the public can associate the firm with such causes in a positive way as is the case here then we can be ranked first in terms of corporate reputation. (a member of the BMW marketing team) • Increased staff morale and creation of a greater sense of camaraderie among employees. The campaign has united in common cause. It has established a sense of camaraderie, increased teamwork, and has definitely improved the quality of the work environment. (another member of the BMW marketing team) • Reinforced the organization’s core values.
The benefits gained by the charity:
• To date they have raised nearly S125,000. • Greatly increased the visibility and publicity for the charity and its associated cause. • Opened up new vistas and horizons for potential partnerships. • Established an ongoing cooperation with Char. Pilakoutas the BMW Cyprus dealer. The ‘Value for Life’ CRM campaign is currently in its third year (2010). It has been been successfully utilized for the BMW 316i introduction and new Mini Cooper models and has successfully raised money and awareness for Ayia Skepi while simultaneously benefiting corporate reputation.
Benefits to society:
On the basis of the interviewee responses of both the company and the charity participants, the campaign has increased awareness regarding a serious social problems, drug addiction. It was also perceived that the CRM effort was successful in motivating the general public to assist in the efforts of the charity to help drug addicts undergoing rehabilitation treatment through the donation of money.
Benefits to the Football Association:
The ‘Value for Life’ campaign has strengthened the culture of our organization. It has enhanced our corporate values and we know that it is important to the management, our staff and our customers that we demonstrate our CSR by making a positive impact on the local community. Ever since 2005, every introduction of a new car model is linked to the campaign … for example the 316i, and the Mini Cooper. The campaign has reinforced both company and staff support for Ayia Skepi. (Marketing Manager of Char. Pilakoutas)
Though not directly researched, as indicated earlier the Football Association gained knowledge and understanding of a new form of promotional and cause related marketing. Their involvement, use of the BMW cars in quiet times during the game, sale of raffle tickets and a minor price premium, in this case, helped underpin a positive image for the Association and indeed the stadium where the matches took place. Such experience, especially when positive outcomes ensued, would be utilized in subsequent seasons, and of course can be extended to other major branded companies and other social causes.
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Thus, a number of advantages were associated with the tripartite effort that formed the foundation for this CRM strategy the most important of which is the increased number of human resources (volunteers and participants), which subsequently increased the promotional effort, exposure and of course the impact of the campaign. However, there were also a number of difficulties and challenges that made the overall effort more problematic, as difficulties in coordinating the communicational and promotional effort, as well as the overall CRM program was encountered. These, however, were overcome. Although not researched to the same degree or extent, the fact that this tripartite relationship continued is indicative of a CSR initiative that ‘worked’ for several years, benefitting all participants. Although somewhat speculative, perhaps even good CSR initiatives and programs such as the case given here may need to be revamped, readjusted and renewed, as social causes change, and indeed as environmental circumstances change and other social causes and issues come to the fore, which are relevant to brand organizations. In this case, BMW was the primary mover of the activity. But it is not unreasonable to suggest that CRM may be triggered by those involved in the social cause approaching branded companies. There is nothing to countermand the idea that while most CRM initiatives involve dual partners, a tripartite approach may not be unusual and could involve multiple partners. Thus, we anticipative such initiatives taking place on a wider scale or platform, with much greater budgets and involving a multiplicity of partners.
CONCLUSION AND MANAGERIAL IMPLICATIONS
Specifically, the case shows that the BMW dealer in Cyprus utilized and is still utilizing CRM as a highly potent tool for achieving marketing and corporate objectives, as well
as a significant contributor in addressing an important social issue together with the needs of a local charity. The CRM campaign launched by the dealer demonstrates the convergence of several socio-cultural themes for example religion, football, the fight against drugs and a powerful brand such as BMW. CRM worked by integrating the core trading objectives and activities of the business with the needs of the particular cause or charity. The study shows that CRM has the potential to deliver greater benefits per pounds spent by achieving a wide range of business, marketing and social benefits. These include building and enhancing corporate and brand reputation, differentiating the brand, building relationships and loyalty, demonstrating the organization’s values, developing morale and increasing sales and income. In the case, the dealer used CRM in order to demonstrate and communicate to stakeholders its value of good corporate citizenship, introduce a new car model in the local market and then extend to subsequent new models and create awareness for a social problem while raising money for a local charity. The case illustrated that in order for CRM to deliver expected benefits there is a need to integrate it in the overall marketing mix used alongside the more traditional tools such as advertising and PR and view it as an integral part of the long-term strategy of the corporation. The essence of the marketing approach here is to associate the cause selected with one or more of the core values of the organization. Clearly, a good match is important, as the case demonstrates. Using a third organization as a means of bringing together messages concerning the cause and the product on offer to the attention of the desired audience can also be beneficial. In the present case study, football matches were gatherings where various messages about the product, the cause and customer involvement via donations could be communicated with excellent effect.
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In a more general sense, it it evident that as customers and stakeholders become increasingly demanding of business, as society sets higher moral expectations of business and as marketing noise, clutter and competition increase, it will be increasingly important to develop stronger relationships with stakeholders. CRM has the potential to provide opportunities because it can portray emotional commitment and moral engagement of companies with specific societal needs in relation to stakeholder groups and hence in our view will continue to grow in importance as a marketing tool. In essence, CRM has the potential to maximize the impact of the firm’s marketing strategy and can deliver benefits for the business, the community and society as a whole. It is a relatively inexpensive way of creating awareness of brands, products and companies, but at the same time is likely to be viewed with enthusiasm by organizational stakeholders since it offers considerable societal value to the parties involved.
Acknowledgments
We express appreciation to the Editor and the two anonymous reviewers for their critical comments and helpful advice. These have helped improve the paper markedly.
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