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Many marketers are trying to answer these questions, but it’s not as easy as the current hype and a multitude of research studies suggest.
In this article, we’ll explore how to determine whether purpose marketing is right for your company, and how to decide whether your company is ready to launch an effective purpose marketing program.
Why Purpose Marketing
Purpose marketing is the use of content in external communications that emphasizes a company’s core mission and values, i.e. its brand purpose.
A company’s brand purpose essentially describes its “reason for being” beyond the basic business functions of offering products or services and earning a profit. The brand purpose encompasses how the company is making a positive contribution to society and where the company stands on important social issues.
The current popularity of purpose marketing has resulted from a growing interest in corporate social responsibility (CSR). The principle that business organizations have obligations to society isn’t new, but increasing concerns about climate change, the massive disruptions caused by the pandemic, and recent social and political upheavals have made CSR a major priority in corporate boardrooms and executive suites.
Several recent developments illustrate CSR’s growing importance. For example:
- In 2019, the Business Roundtable, an association whose members include the CEO’s of nearly 200 major U.S. companies, released a new Statement on the Purpose of a Corporation. The 2019 statement departed from earlier versions and declared that in addition to serving shareholders, corporations should deliver value to customers, invest in employees, treat suppliers fairly, and support the communities in which they operate.
- At the end of 2020, there were 392 ESG* mutual funds available to U.S. investors, according to a report by Morningstar. That was up from 303 such funds in 2019. The Morningstar analysis also found that 2020 was the fifth consecutive calendar year ESG-focused funds received record cash inflows. (*Environmental-Social-Governance)