Tackling Business Problems using ‘purpose led branding’ strategy

Tackling Business Problems using ‘purpose led branding’ strategy

Consumers increasingly expect brands to have not just functional benefits but a social purpose. As a result, companies are taking social stands in very visible ways. Brands increasingly use social purpose to guide marketing communications, inform product innovation, and steer investments toward social cause programs. Corporate Social Responsibility (CSR) and purpose may go hand in hand but brands adopting purpose don’t come naturally. Making CSR  a part of the brand’s core purpose takes commitment from the top leadership. It takes time and it takes money. But it can have a huge pay-off when handled with authentic, sincere, and meaningful programs that are appropriate for the markets in which the brand operates.

In 2009, a then little known author by the name of Simon Sinek got on stage at his now infamous TED Talk and told Entrepreneurs and Business Leaders to “Start With Why”. It’s still one of the most-watched TED Talks of all time. Indeed, that’s an interesting question for every company to ask from oneself – apart from Commercial Interest, Why is it that you do what you do?

Indra Nooyi, chairman and CEO at PepsiCo says, “By continuing to apply our scale and capabilities to address shared societal challenges, we will further strengthen our company and the communities where we operate.”

However, companies need to be careful about doing such campaign and put heart and soul into it, not just with the purpose of building intangible benefits such as brand affection or as a means to communicate the company’s corporate social responsibility, without consideration of how they might create business value for the firm. If done well, this can help corporate become more competitive in their markets.

Steps to build a social purpose brand

STEP 1: Identify the cause to support 

To develop a social purpose strategy, managers should begin by identifying a set of social or environmental needs to which the brand can make a meaningful contribution. Most companies are already having corporate social responsibility programs under way, some of which could become relevant aspects of the brand’s value proposition. Yet focusing on only those initiatives could limit the potential of a purpose-driven brand strategy. To create a more comprehensive set of choices, managers should explore social purpose ideas in three domains: brand heritage, customer tensions (exploration of relevant social issues), and product externalities (perceived / potential harms being created by your product category). 

To work in a focussed manner, the company must then drill down to a few causes, and evaluate them in detail. An effective social-purpose strategy creates value by :

  • Strengthening a brand’s attributes 

Let’s understand this point with a case-study about Vaseline. In 2014, the product was at risk of becoming a commodity and to grow, it needed to find new ways to remind existing customers of its core attributes while attracting newer customers. The business problem found its solution in the brand tagline – “the healing power of Vaseline,” which captures its core attribute. Asking “Where is our healing power most urgently needed?” the team began the process of developing a social purpose for the brand. Through research they figured out that Vaseline jelly was an indispensable part of emergency first-aid kits. In refugee camps, for instance, minor but common skin conditions such as cracking and blistering could become dangerous and debilitating. Petroleum jelly, and Vaseline in particular, was often a first line of care. With this insight, the team crystallized a social purpose strategy around skin care for the most vulnerable—people living in poverty or emergency conditions—and in 2015 the Vaseline Healing Project was born. In partnership with the non-profit Direct Relief, the project has reached to over 70 countries by 2020, in just 5 years. The program partners with medical college hospitals and dermatologists to train doctors and nurses in diagnosing and treating skin conditions. The Healing Project was not a CSR or public relations initiative; it was designed to connect business goals with societal needs. Taking learnings from this case, to assess the relationship between different social-purpose strategies and brand attributes, companies should ask themselves:

  • Does the strategy reinforce existing brand attributes?
  • What new and valuable brand attributes might it create?
  • Would the strategy be difficult for competitors to imitate?
  • Building new adjacencies. 

Another way by which a social purpose strategy can boost business performance is by enabling the brand to compete in adjacent markets. Consider the case of Brita which until 2005 primarily sold tap-water filters. Concerned by slowing growth, they wanted to enter a related bottled-water segment. With research they realised the need of community is to  access clean drinking water at affordable rates and that too without creating environmental pollution due to plastic water bottles. Thus Brita seized on a social need and launched the reusable water-bottle and pitcher innovations with its filter technology to expand the brand’s market presence. Over time, they evolved from being just a filter brand to position themselves as ‘water brand’. Within three years, the company revenue grew by almost 47%. 

To gauge whether a brand can support a move into adjacent markets, companies should ask:

  • Can the strategy help create a new product or service for current customers?
  • Can it help open a new market or channel or attract a new customer segment?
  • Can it help reduce costs or increase the profitability of the business?
  • Manage the risk of negative associations among consumers.

Research shows that millennials are putting their money where their mouths are, when it comes to CSR. In the last 5 years, 9 out of 10 millennials said they’d make personal sacrifices to support causes that are important to them, according to a Berkeley study. This could mean switching to a brand that prides itself on purpose-driven marketing tactics, paying more for products from brands that support their causes, or refusing to work at companies that don’t use CSR, even if that means they’ll earn less money. For brands looking to resonate with these cause-interested consumers, transparency and authenticity are crucial. Take a look at what your audience is saying in the social media space. What are they passionate about? It’s important to think through how consumers will perceive the social purpose a brand is considering. Will they see the benefits as an asset? A liability? Or irrelevant to their purchase decision? 

Take, for instance, the brand attribute of “organic ingredients,” which is typically used to support claims of health or environmental benefits. If it appears on the label of a tea product, consumers may associate it with augmented qualities—perhaps improved taste or healthfulness. To assess these associations consumers may have with different brand-purpose strategies, managers should consider the following questions:

  • Is the social need likely to be perceived as personally relevant to target consumers?
  • Will consumers be able to easily associate the brand with the social purpose?
  • Will the social purpose strategy induce positive (and not negative) associations about the brand or product?

A Harvard research has found three drivers of negative reactions from consumers: inconsistency between the brand claim and the company’s actions, politicization of the claim, and suspicion about the firm’s motives. Stakeholders may question a brand’s motives if the initiative appears to be driven primarily by commercial interests. Stakeholders understand that companies are profit-driven, but if the company’s initiative offers no apparent social benefit, they may feel manipulated—as often happens if a brand is found to be “greenwashing.” 

STEP 2: Define the Brand’s Role 

Once a company decides which social need a brand will focus on, it must determine what the company should do about it. There could be two ways for it – 

  • Helping generate resources to address a social need by sharing a % of profits associated with sales. 
  • Influence mind-sets with a social cause campaign.  
  • Take up CSR projects with appropriate implementation partners.

One quotable example of brand taking a unique role is L’Oréal. The cosmetics brand, achieves this through a focus on science. As much as its recent campaign #changethenumbers, which looks at promoting positive perceptions of women in science, it is involved in several  other schemes. In 2007, together with the United Nations’ sustainable development agency, the company established the L’Oréal-UNESCO For Women in Science fellowships. It has awarded a total of £480,000 to a network of 37 fellows, helping female scientists to further their careers and research in the UK and Ireland.

Another example is Philips, which has its own index to measure the number of lives improved on an annual basis, which is calculated using an algorithm that looks at demand for products with a direct relation to health and how many people those products have affected. The Philips Foundation, is an important part of the corporate social responsibility programme. The foundation uses the brand’s expertise, innovations and global partnerships to the benefit of young and underprivileged people and communities around the world. It aims to take insight from community level in one country and apply it across multiple communities in numerous countries.

One way brands can create a truly authentic campaign and show consumers how they’re supporting a cause with tangible metrics is to leverage non-profits and their expertise on a given cause. These campaigns can significantly boost a brand’s image and expand the company’s reach. This approach to social impact marketing not only creates more value for the brand, but it can also generate entirely new sources of funding for non-profits by tapping into the company’s marketing budget. 

Summary

Companies often have the best intentions when trying to link their brands with a social need, but choosing the right one can be difficult and risky and has long-term implications. Competing on social purpose requires them to create value for all stakeholders—customers, the company, shareholders, and society at large—merging strategic acts of generosity with the diligent pursuit of brand goals. Businesses need to think holistically and innovatively across their entire value chains. They need to set standards for sustainable practices—including those that enable transparency and traceability—that earn trust from purpose-driven consumers. And they need to apply this thinking and practice, not just to their organizations as a whole, but to each of their products—the level that will resonate most with purpose-driven consumers making a buying decision.

In defining how their social purpose programs will create value, companies should partner with organizations that are actively working on the front lines of the social issue. This ensures that the brand’s capabilities are focused on the most pressing needs of the social issue. NuSocia Strategy cell works with brands to create strategic CSR programs which can help the business as well as the community.

Author – Aditya Singh

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