As I’ve explored models for business development in the emerging growth countries, I have naturally looked to my own country for inspiration. America is still the largest consumer market on the planet, although maybe not for long. China and the rest of Asia are rapidly gaining ground. The competition for consumer dollars is fierce in the USA. It is worth studying what companies do to succeed here, to see what lessons might transfer to emerging growth countries such as Turkey. What works here will not always work in other places. With localization, some things might just work very well.
The brand Paul Newman’s Own was the brainchild of the late actor and foodie, famous for his role in the “French Connection” and other Hollywood movies. His company, which sells food products in supermarkets (and coffee in McDonald’s), donates all profits to charity. Newman’s Own has raised many millions of dollars for needy charities. Volvic, a French brand, donates ten liters of clean drinking water to poverty stricken African children for every bottle of their spring water sold in the USA, up to a certain limit. In America, the charity tie-in is a common marketing ploy. In Australia they call it “cause-marketing”. Although this phenomenon does exist in Turkey, I have noticed that it isn’t as widespread as it is in America and other developed (western) countries.
Newman’s Own and Volvic’s products are of exceptional quality, and the price reflects this fact. While many shoppers will always choose cheaper brands, there is a portion of the consumer population that is willing and able to spend more, though they may not be swayed by quality alone. These higher income individuals are often better educated and have more self-awareness in regards to their economic power. They tend to donate to charity, and will view the purchase of a product from a company such as Newman’s Own as a chance to do something good for others less fortunate than they, while enjoying the benefits of a higher quality product. For the marketer, there is an opportunity to positively position and define their brand’s identity through association with a charitable cause.
This is a culturally rooted mechanism; it remains to be seen how well it will work in emerging growth countries. While citizens of these countries certainly believe in charitable giving, they already have other culturally ingrained ways ofdoing so. Although charity tie-ins do exist in Turkey, we have not yet seen the huge upwelling of consumer-based philanthropy like we have in the USA. I think that there may be a great opportunity for this to happen. It will take visionary companies and innovative marketers to find out if I am right.
Brands are always searching for a characteristic identityas part of a positioning strategy. Besides the usual ways companies like to be seen, for example, being known for high quality or great service, there is a desire among companies to be seen as doing good for the community. For this reason many companies donate money or services to support worthwhile causes, such as alleviating global poverty. According to the Global Corporate Giving Initiative, leading companies tend to target their philanthropic giving internationally: companies surveyed in 2011 reported designating 44% of their contributions internationally. The median amount given among 214 respondents was $39 million. Leading companies also tend to make efforts to pay attention to sustainability of the environment in their operations and buildings, and generally try to be good corporate citizens.
Many small companies want to do what they can to contribute to making the world a better place. All big companies were small at one time. How does a company come into existence and grow while contributing in some way to making the world a better place? We have seen the term “corporate social responsibility” (CSR) used more frequently in recent years. This refers to the efforts of companies to integrate practices into their development that somehow “give back” to society.
There are many smaller companies that would like to do business in Turkey and other emerging markets. These are not multinationals. They don’t have the resources to establish centers on the ground. They need to form joint ventures with companies inside the host country in order to be able to market and sell their products and services there. The same is true of Turkish businesses wishing to do increased business abroad. These companies need to find common ground on which to meet and rally their forces, while energizing their workforce and commanding a portion of market share.
Everyone can get behind worthy causes, such as alleviating poverty, protecting the environment, or increasing social justice. Why not make these and other worthy causes the cornerstones of a business paradigm? Joint ventures built around a cause have the potential to invigorate brand loyalty, capture the imagination of relatively wealthy consumers, and actually do some good for society. This is the vision I have referred to as “doing well while doing good”. There are many forums for this to happen. In America there is a plethora of festivals and conferences devoted to this undertaking. Business schools are taking notice and instituting curriculum to teach techniques relative to CSR.
While this type of marketing and venture is certainly not unique to America, it is widespread in this country. This may be a function of our culture more than anything else, and it may never become as prevalent in the emerging growth countries. After all, there are older and more established mechanisms for charitable giving already in place. Cross-cultural business can be enervating and fraught with pitfalls and miscues. Perhaps joint ventures with charity tie-ins is a way for hands to reach across borders, grow wealth for companies, and support the causes most everyone really cares about.
Tom Stein is a senior Professor at Berklee College of Music in Boston. He is the USA Country Manager for the International Institute of Marketing Professionals (IIMP®) and a branding consultant in the entertainment media business.
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