1. Definition and concept of Product Red
2. Product Red: A comparison of consequentialist and deontological views
2.1 Product Red’s effect on Solving the Problem of AIDS
2.2 Ethical Theories
18.104.22.168 Consequentialist view of Product Red: Companies
22.214.171.124 Deontological view of Product Red: Consumers
3. Sustainability of Product Red
List of Figures
1. Definition and concept of Product Red
Product Red: A comparison of the consequentialist and deontological view: This is my paper’s issue. To entirely register the theme, one has to deal with Cause-Related Marketing in general at first.
Cause-Related Marketing (CRM) is subordinated to Corporate Social Responsibility (CSR) which is comparable to the term Corporate Philanthropy. Basically CSR labels a range of “corporate activities, with the common goal of achieving the ‘triple bottom line’—based on financial, social and environmental objectives.“ (Ponte et al. (2009) p. 302)
Thus, CRM is a kind of marketing, as its task is to sell a product or service “by highlighting the fact that part of the profit or sale price will be donated to a ‘good cause’.“ (Ponte/Richey (2014) p. 67) In most cases the donated amount depends on the volume of sales during the campaign (Ponte/Richey. (2014) p. 67) but the purpose is clearly “to benefit the cause and society.” (Conaway/Laasch (2012) p. 111)
The pioneer of CRM - American Express - first used this strategy in the 1980s, when they combined their credit card selling with regional causes in the US, one example being the restoration of the Statue of Liberty. As an effect, they did not only collect money for a good purpose but could also raise their card use tremendously. Since then, the amount of CRM campaigns has increased steadily being boosted by the development of Social Media and globalisation. (Ponte/Richey (2014) p. 67f)
Because of this causality, CRM „is one of the most rapidly growing marketing strategies”. (Steckstor (2012) p.1) Another subitem is the so-called Brand Aid or Cause Branding. More specifically, this term defines the endeavour of different companies supporting the same social, environmental or animal-welfare international cause to generate donation by selling products, connected with the cause. (Conaway/Laasch (2012) p. 112) To reach a broad section of consumers, celebrities are often used as mediators in the marketing of the campaign. (Ponte/Richey (2014) p. 65)
Presumably, the most famous Brand Aid business model is Product Red with partaking companies like American Express, Apple, Emporio Armani, Nike, Starbucks and The Gap. (Steckstor (2012) p. 13) The initiative was founded in 2006 by Robert Shriver and Bono, a member of the band U2. (Wirgau et al. (2010) p. 614) In principle “[e]very partner of the program donates up to 50 per cent of the profits of specially “RED- branded” parts of their products or services portfolios to The Global Fund1 to support HIV and AIDS programs in Africa (The-Persuaders-LLC 2011).” (Steckstor (2012) p. 13) The initiative’s main goal was to free Africa from AIDS until 2015 (Conaway/Laasch (2012) p. 112) and to generally increase awareness for The Global Fund fighting diseases like AIDS, malaria or tuberculosis by matching the cause to popular brands. (Ponte et al. (2009) p. 301) Participating firms offer special editions of some of their products which are exclusively designed for Product Red.
Now, we can see, their efforts have not been in vain: According to the New York Times “Red has taken the merger of marketing and philantrophy to new levels, becoming one of the largest consumer-based income-generated initiatives by the private sector for an international humanitarian cause”. (Nixon (2008))
2. Product Red: A comparison of the consequentialist and deontological view
2.1 Product Red’s effect on solving the problem of AIDS
„Together, we’ve raised 350 million Dollars and impacted 60 million lives“ (Product Red 2016) This is the counterintuitive statement at the opening of Product Red’s website. At first, this result seems to be outstanding.
Though, when we remember the actual deadline Product Red set with an AIDS-free Africa by the year 2015, the vision is rather disillusioning. On the one hand, a great amount of money could be spent to The Global Fund but on the other hand, the initiative could not keep their auspicious promise. The deadline was now postponed until 2020.
Then again, “the world reached a tipping point in the AIDS fight” (ONE (2014) p. 22): For the first time, the number of people freshly provided with a medical treatment surmounted the number of newly infected. (ONE (2014) p. 23)
Altogether, 34 million people died because of AIDS since it has been discovered in 1981. Today, more then 37 million people are infected and constantly the virus is handed on to neonates. Just 14 years ago, 1,500 newborns had been infected with HIV, comparing with only about 600 today. (Product Red 2016) The measure of saving the lives of the already infected ones is the provision with so-called antiretroviral medicines (ARVs), that “works to keep HIV from growing and multiplying within the human body” (Product Red 2016) and minimizes consequently the chance of passing it on to newborn children. Thanks to The Global Fund and especially Product Red - which generates most of donations to the fund - more than 15 million people are endowed with medication or treatment.
Product Red focuses on the regions where AIDS is the most widespread and “countries with high prevelance of mother-to-child transmission of HIV” (Product Red 2016), being Ghana, Rwanda, Lesotho, South Africa, Swaziland, Zambia, Kenya and Tanzania. The number of people provided with ARVs varies in each country, the lowest number being 6,200 in Zambia up to more than 830,000 people in Tanzania. In average 228,000 people could be helped with the medication.
In addition to Product Red’s primary goal - the actual decrease of HIV infections - an appreciable contribution was made to enhance the awareness concerning AIDS. This was achieved mostly through events like art auctions. But other cultural highlights should also be mentioned, for example The Killer’s annual Red Christmas single, the #onestep4RED initiative at the Time’s Square in New York, a pop up concert at the World AIDS Day in 2014, or the red lighting of famous landmarks all over the world in 2010. (Product Red 2016) Potential consumers of Red products and donators could also be reached for example through `Share the Sound´ of Coca Cola and Product Red, where one could win special experiences with celebrities by donating money.
Another point of increasing attention of AIDS and also other crucial social and environmental issues, is done in the cooperation with ONE, Product Red’s sister organization. The main goal of ONE is to convince people signing a petition that the world’s politicians and influencers keep their promises and to admonish them to provide further steps for example in the struggle against AIDS. (Product Red 2016)
Summing up, one can say that until now, Product Red has done quite a good job in fighting the problem of AIDS in Africa. However, critics are giving warning of the initiative’s disregard of other focal points like fair trade and exploitation during the production of goods, with no exception of their own Red products. As the products are made in developing countries without difference to the company’s original not-Red products, “no explicit attempt has been made through [Product Red] to implement better working, social or environmental conditions of production.” (Ponte et al. (2009)
p. 313) Knowing this matter of fact, Product Red’s founder Bono mentioned, “[they] did not think that trade is bad. [They] were for labour issues. Labour issues were very serious but six and a half thousand Africans dying was more serious.” (Ponte et al. (2009) p. 313) Nevertheless one has to be careful not to promote “towards the beneficiaries of causes that have little or no relation to the product itself“ (Ponte/Richey (2014) p. 69) which is definitely a jeopardy within Product Red.
Another noticeable negative point, is the lacking transparancy in some of Product Red’s actions. When it comes to the total amount donated by each brand, only Armani was willing to state a concrete number. That might be the case, because Product Red’s „headquarters has refused to provide a breakdown of contributions by company.“ (Ponte et al. (2009) p. 312)
Furthermore „Cause-[R]elated [M]arketing campaigns do not always detail the specifics of their agreement to support the recipient organisations.“ (Ponte et al. (2009) p. 312) Some of them even base on the customer’s misunderstanding. As the amount of donations per company differs extremely within Product Red’s initiative, it is unclear how much is actually contributed in the end. For example American Express dispenses one percent of money paid with their card, whereas Gap or Armani spend 40 to 50 percent of their net profits. (Ponte et al. (2009) p. 312)
2.2 Ethical Theories
Consequentialism is the umbrella term for the so-called teleological theories. (Frankena (1973) p. 14) In general, “[a] teleological theory says that the basic or ultimate criterion or standard of what is morally right, wrong, obligatory, etc., is the nonmoral value that is brought into being.” (Frankena (1973) p. 14) If the result, in any way, is something good, the whole action is considered to be right and ethically respectable. In fact, the action itself is not regarded and the ethical rightness of the activity - according to the rating of other ethical theories - is irrelevant. Essential is just the goodness of the consequence.
Precisely, “an act is right if and only if it or the rule under which it falls produces, will probably produce or is intended to produce at least as great a balance of good overevil as any available alternative; an act is wrong if and only if it does not do so.” (Frankena (1973) p. 14)
1 The Global Fund partnership induces and invests almost US$4 billion a year to support programs of prevention and treatment for AIDS, tuberculosis and malaria (The Global Fund 2016)