I have the wonderful opportunity of assisting one of our MBA fellows (and experienced consultant) as she consults for a great organization this summer! In this role, one of my tasks at work is to analyze successful merchandising campaigns of cause-related products for one of our clients. The first campaign I was eager to look at was the (RED) campaign because of the popularity of (RED) products and the campaign’s successful partnerships with top retailers.
The (RED) campaign launched in 2006 with an enticing new idea: shop to save lives. Founded by Bono and Paul Shriver, (RED) works with retail corporations to provide a simple solution to the problem of HIV/AIDS in Africa. Participating retailers, such as Coca-Cola, Apple and Starbucks, create a (RED)-inspired line for their products, and donate a percentage of the sales to the Global Fund. The Fund then uses the funds to provide ARVs to selected organizations in Africa. This co-branding method of (RED) with consumer goods is marketed as a positive solution to the HIV/AIDS epidemic, and as an effective CSR strategy for these corporations.
However, even though the campaign seems to be an ideal cause marketing strategy for CSR, there are a few problems with the partnerships that need to be addressed. For instance, there is a lack of transparency in the corporations’ contributions to the Global Fund. There is no public disclosure on how much each retailer contributes to the Fund and in providing ARVs. This prevents the (RED) organization and other stakeholders to assess the impact and effectiveness of the Project.
Moreover, (RED) was formulated without consulting local stakeholders in Africa, such as their local business leaders, NGOs and the ARV recipients. Input from locals is important to create the best product for the local community, and crucial to build a sustainable campaign that would benefit all stakeholders (including RED and the retailers).
Lastly, the affiliation with (RED) gives retailers a positive spin to their overall brand without requiring any actual changes to their business practices. The fact that business practices of the retailers are not reviewed or challenged prior to their partnerships with (RED) is problematic because it runs the risk of being affiliated with a company’s bad practices.
From the examples above, it is clear that corporations have an incentive to participate in (RED) to bolster their CSR and brand reputation. However, participating in (RED) requires these corporations to simply produce another product line instead of actually implementing a CSR strategy in their internal operations. In order to become a truly effective CSR framework, I have the following recommendations for (RED):
- Require conditions for membership: Companies have to meet environmental and labor standards before they are able to participate in the campaign. These standards can be based on pre-existing conditions available, such as the European Commission’s Labour Law or the US’ Environmental Protection Agency, or formulated through independent experts.
- Improve transparency: The contributions of each retailer to the Global Fund and the percentage of this contribution that goes to providing ARVs in Africa should be disclosed in public. This information can be used as a benchmark each year for future contributions, and to inform the public of how much of their profits is going to the intended cause. Moreover, this information can be used to improve and measure efficiencies in the Project operations during program reevaluations.
- Work with NGOs or nonprofit organizations to strengthen support and credibility: (RED) can benefit greatly from working with established NGOs, unions and activists in the environment and labor sectors. These stakeholders can help monitor the retailers that partner with RED, provide their own recommendations on RED’s required conditions, and improve the Project’s framework.
- Improve local ownership with recipients: The Project was created with a top-down approach, using experts and celebrities from the US and Europe. I believe that working with stakeholders in Africa will promote shared responsibility and increase support from the region, which can enhance the credibility and effectiveness of the Project. For instance, working together can improve (RED)’s operations by finding other, cheap ways to address HIV/AIDS in Africa.
Overall, (RED) is an innovative way to address a growing epidemic in Africa, and provides incentive to both retailers and consumers to get involved in the campaign. As one of the leading initiatives that use capitalism to solve global problems, (RED) has the opportunity to expand its reach to other regions and become a global CSR model to follow. However, unless they make significant changes to improve their framework, (RED) is at risk of being deemed as simply another marketing tactic for corporations that need to improve their CSR.