Spurred by the consumer demand for companies to be socially responsible, cause-related marketing (CRM), in which fundraising for a cause is tied to purchase of a firm’s products, has become popular in recent years. Research has shown that CRM campaigns that allow consumers to choose the cause that receives the donation often leads to greater consumer support than those in which the company determines the cause (Grau, Landreth, & Garretson 2007, p.25).
This is exactly what LUSH has done in its ‘Charity Pot’ campaign which launched in 2007, the campaign seeking to raise money and awareness about featured non-profit organizations (NGO). Each pot has a label on it informing customers about one of the featured charities, which are hand-picked by LUSH representatives. All sales from the product (apart from the V.A.T. which goes to the government) will go into the Lush Charity Pot Fund, and then given to the chosen NGO (Hovitz, H 2014).
The campaign is yet another extension of the company’s dedication to their moral and ethical standpoint, their focus on promoting improvements within the cosmetic industry and “supporting good causes by acting responsibly as a company” (Marie Claire 2014, p.45). Since its invention in 2007, the company has raised $6 million for over 600 nonprofits, which consist of mostly animal welfare, environmental conservation, and humanitarian causes with annual revenues below $500,000 (Lush 2014).
It becomes evident that in this context customers respond positively to choice, as it increases their perception of their personal role in helping the cause. Purchase intention is further enhanced by customers with high collectivism and a high perceptual fit between customer, company and cause (Shabbir, & Ruediger & Kaufmann & Ahmad 2010, p. 1231). This strategy can be beneficial for corporate image and customer engagement, but experts warn that companies need to take an integrated approach, and ensure that marketing communications reflect genuine corporate social responsibility (Peggy , Vrioni 2012,p. 216). As customers are willing to use their spending power to reward or punish companies based on their corporate social responsibility (Peggy , Vrioni 2012,p. 212).
Figure 1: Taken from Grau & Landreth & Garretson 2007, p. 20
Figure 2: Taken from Hovitz 2014
Figure 3: Taken From Marie Claire 2014
Hovitz, H 2014, Following the Millions in LUSH’s ‘Charity Pot’, Forbes, http://www.forbes.com/sites/helainahovitz/2014/12/22/following-the-millions-in-lushs-charity-pot/, accessed 12/05/2015
Lush 2014, Lush Newsletter, www.lush/whatsnew.com
Grau, S & Landreth, F & Garretson, J.A, 2007, Cause-Related Marketing (CRM) , in Journal of Advertising, Volume 36, no. 4, pp. 19 – 32
Marie Claire 2014, Why We Love Lush Cosmetics, Vol. 21, no 6, Hearst Magazines, a Division of Hearst Communications, Inc, US, New York, pp. 44 – 46
Shabbir, S, Ruediger, H & Kaufmann, I & Ahmad I.M 2010, Cause related marketing campaigns and consumer purchase intentions: The mediating role of brand awareness and corporate image , in African Journal of Business Management Vol. 4, no. 6, pp. 1229-1235
Peggy , S, Vrioni, B.A 2012, Corporate Social Responsibilty and Cause-Related Marketing: An Overview, in International Journal of Advertising, vol. 20, pp. 207–222