Paper Topic: TOMS Shoes and Cause-Related Marketing

Walking around campus you will see tons of people, both male and female, wearing simple canvas shoes with very little detail. They come in multiple colors, but really don’t have much to them other than that. These shoes are called TOMS, and although they might appear simple, there is an intricate story behind them. These shoes also gave me in the inspiration for my paper. For each pair of TOMS purchased in stores or on the TOMS website, one pair is given to a child in need. Since it began, the company has given 10,000 pairs of shoes to children in Argentina and 50,000 pairs to children in South Africa. The motto of the company is “one for one”. For at least part of my paper, I would like to focus on the TOMS business model.

TOMS engages in what is called cause-related marketing. In the case of TOMS shoes, the cause came first and the product was secondary, in the sense that the product idea was created out of one person’s desire to support a cause. I’m sure that there are other products on the market that were created based on a similar mentality, and I would like to look into these companies and their product offerings more in depth. More common, however, are already established companies that decide to associate their name with and give a portion of their profits to a cause. One of the most common examples of this is when companies turn their product packaging pink, signifying that they provide funding for breast cancer research and support.

Another route that would be interesting to explore involves corporate social responsibility in general, and how it affects a customer’s view of a product. For instance, if a company prides itself on being “green” and their attempts at helping the environment are widely publicized, will that better encourage customers to buy products made by that company? People like to feel good about their decisions, and buying something attached to a cause is an easy way to achieve this.

This topic is interesting to me because I see great value in volunteering for non-profit organizations, or providing some kind of monetary support to them. Monetary support does not only come in the form of donations; it can also come from purchasing those products that are connected to a cause. I made the connection between cause-related marketing and customer experiences because I realized that I am the type of consumer to give in to cause-related marketing, and I know there are many people out there who feel the same. When I am faced with a wall of similar products, it makes my decision much easier to see that one is connected to a cause, because that will then become a factor in my purchasing decision. It makes me feel good, so why not? At the same time, I know that there are people out there who do not feel the same way, so in my paper I would also like to explore how much cause-related marketing affects purchasing decisions. From my initial research, it seems that connecting a product to a cause has a very positive affect on sales, so it might be hard to find people who disagree that cause-related marketing is a good thing.

I found a great article on TOMS shoes in Business Week. To see the article, follow this link:

http://www.businessweek.com/smallbiz/content/jan2009/sb20090123_264702.htm?chan=smallbiz_smallbiz+index+page_top+small+business+stories

The article talks about Blake Mycoskie, the entrepreneurial mind behind TOMS. Mycoskie always had a passion for travel, and even finished third on Amazing Race. He launched the company with $300,000 of his own money, and with the help of some major national retailers, sold 10,000 pairs in the first year. Since launch, estimated revenue for TOMS is $4.6 million. In his buy one, give one away model, the purchase of a pair of shoes for $40 provides enough money to create another pair and turn some profit, so basically, the company sustains itself.

I also found a number of articles discussing cause-related marketing in general. I will only post one link because I found several; some focused on opinions on the topic, and some defining what cause-related marketing is and the many ways that companies engage in it. Click the following link for an example:

http://www.businessweek.com/the_thread/brandnewday/archives/2007/07/most_cause_mark.html

This article discusses a 2007 survey that found that “2/3 of Americans consider a company’s business practices when deciding what to buy”, and also found that “87% of U.S. consumers would switch from one brand to another if the other brand was associated with a good cause.” The author of this article shows some skepticism as to the accuracy of these figures. Regardless of the numbers, the survey shows that people want to help, and buying products that support a cause is one way to do so.

I felt good just reading about TOMS, so I’ll take that as proof that this is a good topic for my paper. I don’t own a pair yet because it was just recently that I became aware of the cause - but now it’s next on my list of things to buy. I have also started looking into participating in a TOMS Shoe Drop in Argentina. If anyone is interested in joining me, please let me know!