Friday, April 22, 2011

Is Starbucks Free Coffee on Earth Day Really Cause Marketing?

It’s Earth Day today and how could anyone on the internet miss it? Just check out Google’s cute green logo for the day, or on Twitter and Facebook the uncountable number of #earthday hashtags. One of the largest group of tweets,( my current count for just the last hour was 200), were about Starbucks giving free cups of coffee or tea to anyone who brings their own reusable mug.

As I dashed off to meet a friend, I grabbed two coffee mugs, one for her and one for me to take to the nearest Starbucks and I stopped to think about the consequences and the benefits and the balance between the two, that his type of promotional/ cause marketing may bring about and whether this actually is cause marketing. Several cause marketing pro's, like Joe Waters that writes about a partnership and like wikipedia which defines it as :

Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a "for profit" business and a non-profit organization for mutual benefit.

Basic definition of cause marketing is defined by Business

"Joint funding and promotional strategy in which a firm's sales are linked (and a percentage of the sales revenue is donated) to a charity or other public cause. However, unlike philanthropy, money spent in cause related marketing is considered an expense and is expected to show a return."
HMM! No joint funding, no cooperative efforts between Starbucks and a non-profit, no partnership. So can it be called cause marketing? Well certainly there is marketing and there is a related cause. So now let's look at the benefits to both.

Benefits to the cause:Raising Awareness of Earth Day and about the environment.
Eliminates waste by diminishing the use of paper cups
Inspires other businesses to follow its example by celebrating Earth Day, thus creating a viral effect impact.
Customers feel good about feeling they are part of the cause.
Starbucks lends credibility to the cause because they are a big corporate name.

Benefits to the business: (or return, as stated above)
Creates goodwill for Starbucks for the future
Brings in more sales that day for other products.
Brings in new customers for the future.
Creates awareness about other Starbucks environmental causes

This definitely isn't philanthropy either yet there is a huge expense to Starbucks and with that comes the following downsides:
It costs  a lot to give away the extra drinks.

It brings freeloaders that don’t care about the cause
The environmental impact of the extra water and energy used to make the free drinks might offset the environmental benefits.

Most likely Starbucks has assessed the cost benefit of this cause marketing campaign both for their business and for their cause. But in the end they have brought themselves a lot of great publicity by essentially throwing a big celebration in honor of  a cause that they really do care about.

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