CSR BEST PRACTICES: Figaro

April 8, 2009
Finding a Cause in the Quest
for Barako 

“CSR  is not simply philanthropy or dole outs, it is about sustainable activities that benefit a business while it benefits all stakeholders, and making business itself sustainable”

 
By Justine P. Castellon

Customers are worn-out with oversaturated messages from different brands touting the EST (best, hottestPICTURE taken from FIGARO website, newest and cheapest).  In this advertising-bloated and customer- centric society, customers’ behaviors and preferences have evolved.  They prefer a better relationship with you and eventually want to align themselves to what your brand stands for. And, for entrepreneurs, corporate social responsibility (CSR), also known as corporate stewardship is becoming a best bet alternative to stand out from the crowd and forms instant relationship with the customers.

CSR is generally understood to be the way a company achieves an integration of the business, communities, shareholders, and stakeholders. Its primary focus is the commitment to improve community well-being through discretionary business practices and contributions of corporate resources. It is seen to help improve corporate image and clout, strengthen brand positioning, enhance employee commitment, increase appeal to investors, and strengthen financial performance and profitability.

CSR in the Philippines is becoming an ever more important field for the business. Today's companies are investing in corporate social responsibility as part of their business strategy to become more competitive. However, very few understand the real principle of integrating CSR in the business.

 

SOCIAL RESPONSIBILITY IN THE COFFEE BUSINESS.
fig2The success of the Figaro Coffee Company which started in 1993 is a popular coffee store and a 100 percent Filipino-owned that can compete internationally. Apart from the superior-tasting coffee that a customer can enjoy, Figaro is known for the social cause for saving the coffee industry that gives the coffee an added value to the customers.  Figaro’s popularity is not the effort of a public relations spin-doctor; rather, it started from the very core of its business perspective. The CSR came about because of the state of the coffee industry in the country. 

The overall coffee industry in the Philippines was in risk and Figaro cannot just sit and relax, and watch as the industry declines. As the company sourced coffee around the country, they discovered that a lot of coffee trees were chopped down due to volatile prices and conversion of lands to golf courses and subdivisions particularly in Batangas and Cavite.

Figaro looked for the variety Liberica or “Barako” and found out that farmers are no longer interested as no one was buying Barako and the tree occupied more land and bore less fruits as compared to Robusta which the instant coffee manufacturers readily bought from farmers”.

In 1999, they formed the Figaro Foundation Corporation to help resuscitate the Philippine industry, and make it a major coffee-producing country. The campaign ‘Save the Barako’ was formed and the company donated part of the sales of the Barako beans to the project.  The project also encompasses awareness programs, research, and targeted marketing. Today, Barako is the highest bean seller in all its stores and commands a better price. Now, farmers are back in the farms planting Barako.

ENGAGING CUSTOMERS, EMPLOYEES AND SHAREHOLDERS.
Since CSR agrees with almost everything they (Figaro) do and everyone they deal with, all social responsibility programs are geared toward the business entity. For Figaro, it is not simply philanthropy or dole outs. It is about sustainable activities that benefit a business while it benefits all stakeholders, making business itself sustainable.  Most importantly, it is not the sole responsibility of the company’s shareholders; it is the involvement of employees, suppliers, community and the customers.

Figaro holds coffee tree planting and coffee harvest tours twice a year, and engages Figaro coffee club members to join the tours. They continuously conduct tree-planting activities with volunteers from among managers and employees, and with volunteers from among our customers.  The announcements were made through newsletter in the stores or it in the website. 

When you encourage staff to play an active role in the local community, you are not just developing employee skills, but increasing morale and building successful teams. Employees value the company more if they enjoy your interest and support. You will attract and keep staff who are committed and enthusiastic. Your business, and the way you run it, has an impact in your environment.  Your customers, employees, suppliers and the local community are all affected by you and what you do.

INTEGRATING CORE VALUES IN THE BUSINESS.
While CSR’s primary purpose in the beginning is to make a brand differentiation, it eventually evolves in taking responsibility for society. Running a business is not all about making money, it is about moral responsibility to share the blessings, and bringing it back to the community.  While the foundation’s agenda is to secure the supply of local coffee, Figaro secure the business first to continue to help farmers and the coffee industry and help address the lack of supply in the market.

ALIGNING THE BRAND AND COMMUNITY PROGRAMS.
At the same time as it deals directly with people in the community, it also aims to nurture them and develop them to become their brand advocates.  The consumer’s willingness to act as an advocate gives them a very personal stake in the brand. So it is important that activities must be in tune with brand.

Align your CSR activities to your business.  This is also the formula for  a sustainable program.

The corporate activities and programs are the extension of the brand message and they play key roles in the company’s overall mission to deliver a competitive and sustainable return to shareholders.  Coffee business is Figaro’s business – from raw materials down to the single cup enjoyed by customers.  Putting coffee farmers as the top priority in the program is binding. 

BALANCING THE  BOTTOM LINE CONCERNS.
The most important lesson to be learned in CSR is sustainability. It must be inherent in an organization’s objective strategy, and not just simply to aid the well being of society. It should become part of the way in which a company carries out its business. Further, your business makes a profit first before it can contribute to a society in dire need. Hence, when the business entity is profiting, social integrity can be regarded as preeminent concern. Always remember, without the bottom line concerns, social responsibility cannot be implemented.

The quest of Figaro in looking for Barako, paves its way to a cause which involves the business, its employees, the community it serves and the customers who patronize them.  And with the clear vision to give back to the industry it serves, Figaro’s undaunted spirit enables the company to see this project through. The business becomes more profitable, and the brand itself gains its maturity in terms of brand equity.

 

COMPONENTS OF CSR

Cause Promotion

  • Increase awareness and concerns about social cause
  • Support fundraising

Cause-Related Marketing

  • Donate a percentage of revenues to a specific cause based on product sales

Corporate Social Marketing

  • Focus on behavior modification

Corporate Philanthropy

  • Create corporate social initiatives that benefit to direct contribution to a charity

Community Volunteering

  • Empower and motivate employee to volunteer their time support local community

Socially Responsible Business Practices

  • Conduct discretionary business practices to improve community well-being

 

 

 

2 Comments | consumer strategies | Permalink
Posted by marketplace21

Spreading the Virus

July 5, 2008

(making the most out of your viral marketing)

 

 

By JUSTINE P. CASTELLON

 

When a trusted friend, officemate, relative, or acquaintance recommends a product or service to us, we normally won’t hesitate to try that product or service at the first opportunity. And when someone has had a very good experience with your product or service, he or she would most likely turn around and tell as many as 10 people about that good experience. Conversely, however, they would likely tell as many people if their experience with your product or service had been bad or negative.

 

The phenomenon involved in situations like these is called word-of-mouth (WOM) or viral marketing, which has been described as a promotional method “of customers, by customers, and for customers.” When it brings positive results, such as when your loyal and satisfied customers actually brag about how good your business is, viral marketing is the ultimate dream of every entrepreneur.

 

THE VIRAL SPOTS

There are several ways of doing viral marketing, with each variation operating for different reasons by using different methods to bring in different outcomes. Whatever the variation, however, they largely have the same mechanism at their core—a means for providing customers with quality experiences and for encouraging people to pass the message along.

 

The entrepreneur can consider using any of the five most common types of viral marketing, namely pass-along, buzz marketing, incentive viral, undercover marketing, and a user-managed database.

 

Pass-along. This is the type often used by users who do their business on the Internet. It consists of a short note that’s automatically attached to the footer of every electronic message when it is sent out to its recipient. A good example of this pass-along viral spot is the one being used by Hotmail.com. It comes in the form of a tag line at the bottom of every outgoing email that reads “Get your free, private email at www.hotmail.com…” The promotion operates on autopilot, with the message automatically spread out by all Hotmail.com users when they use the mail server to send their mail. Through this simple expedient, Hotmail.com was able to rapidly grow a huge subscriber base.

 

Buzz marketing. This viral type involves getting mass media celebrities to discuss their experience with your product or service, preferably on a provocative but always positive note. The idea is to deliberately create noise and buzz about the product or service among the readers, viewers, or listeners. For instance, Oprah and her choice of Wacoal created buzz on how to alter a woman’s figure minus the expensive surgery.

 

Incentive viral. This scheme gives people an incentive to pass a viral message or viral object along. To get the reward, the passer of the message must get the user to take the desired action. This type of viral marketing is the primary tool of multi-level marketing companies, some of which have grown from nothing to multibillion-dollar businesses because of some astute use of an incentive viral. Incentivizing viral messages latches onto a force that’s even more effective than broadcast television, yet one that’s far less expensive.

 

Undercover marketing. This is the most interesting type of viral marketing. It occurs when people don’t know they are being marketed to. Such a campaign needs to be camouflaged as a piece of news, without obvious incitements to link or pass along. 

 

undercover marketing is perhaps the most difficult type of viral spot. It has to be made to appear simply trendy or curious, it should not seem to be asking an individual to forward them, and it should create the impression that nothing in particular is being promoted. This, for instance, is exactly what Canon Inc. did when it sent out couples to the field to pretend to be Japanese tourists politely requesting passersby to take their photos. They would hand a target passerby the newest Canon camera, and this target passerby in the process would subconsciously learn how easy, smart, and fun it is to use the camera.

 

User-managed database. This refers to a database of prospects that a user generates with the help of online service providers. By inviting other people to join and participate in the user’s group, the user creates a viral, self-propagating chain of contacts that grows naturally, thus encouraging others to sign up as well. Two good examples of this self-propagating type of viral chain are online dating services and the highly popular site Friendster.com.

 

THE VACCINES FOR VIRAL MARKETING’S DOWNSIDE

Viral marketing should be useful particularly to start-up entrepreneurs because of its ability to obtain a large number of interested people at low cost and because of its extensive reach, high credibility, and high efficiency.  However, vital marketing has several downsides: the difficulty in measuring the reach of failed campaigns, the lack of control, the risk that the viral message might be perceived as spam, and the limited possibility for segmentation. Since viral marketing depends on people not too familiar with your branding strategies, it is very important to carefully develop a message that’s strong enough to prevent misinterpretations of your brand.

 

Particularly on the Internet, you should avoid using purely money as an incentive for your viral marketing. This is to avoid the likelihood that your message would be spammed across the web. When you offer money as incentive, most of the time your message would be perceived as ‘too-good-to-be-true’, and you wouldn’t get good results that way. So if you wish to offer incentives to prospective participants to get immediate results, use incentives like discounts or gifts for message recipients instead, or perhaps rewards for those who make referrals.

 

That way, you preserve the credibility of your message, for the best viral campaigns work on the principle of value, not greed. And since the strength of viral marketing is its credibility, you must avoid being perceived as a spammer, and you must make an effort as well to find appropriate triggers to ensure that customers will function as advocates for the brand, rather than as spammers themselves.

 

The vital in viral marketing

While it has come under strong criticism from consumers and privacy advocates because of their concern over unsolicited messages, viral marketing remains a good alternative to expensive traditional marketing. Should you decide to use it, you can avoid negative reactions by making sure of using the principles of viral marketing very tactfully. This is because viral marketing is not only about getting someone to interact with a message; it also needs to be really viral—meaning that it needs to have a pass-along effect. 

 

One good example of viral marketing is Sun Cellular’s 24/7 promotion, which offers unlimited calls and SMS within the network for a flat monthly or weekly rate. It takes advantage of a natural human motivation, using its own subscribers to create the buzz and recruit new customers. For their own benefit, the subscribers work autopilot to convince friends, relatives, and family members to subscribe to the same mobile phone service. By encouraging others to do so, they can fully maximize the potential of experiencing longer—if not unlimited—call time for themselves.

 

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How to build a successful WOM Campaign

·         Create the Buzz. Create value-driven news using your best customers. Involve them in the process of making and delivering your products or services. This way, it creates positive feelings that lead them to talk about your business.

·         Incentivize. WOM is very much about the “WIIFM” principle: “What’s in it for me.” Offer an incentive to someone to tell others about you.

·         Personalize. Response rates increase dramatically when users can see that a message is coming from a friend, and it brings instant credibility to your message. If you’re using e-mail as courier of your message, insert the sender’s name in the subject line, like “Juan de la Cruz thinks you will like to avail the exclusive membership fee…”

·         Get ready for the takeoff. If your viral campaign shoots up towards success, your systems have to be ready to handle the traffic and transactions.

·         Measure. If you want to be able to measure the effectiveness of your viral marketing campaign, you may want to dissect what transpired that led to the success of your respondents.

 

Sources:

 

  • The Secrets of Word-of-Mouth: How to Trigger Exponential Sales Through Runaway Word of Mouth by George Silverman
  • Marketing Management (International Edition) by Philip Kotler
  • The Six Simple Principles of Viral Marketing by Dr. Ralph F. Wilson

 

2 Comments | advertising, consumer strategies, consumer-brand relations, marketing, public relations | Permalink
Posted by marketplace21

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