November 02, 2012

Why Purpose is the Fifth “P” of Marketing

Carol Cone

Carol Cone On Purpose

I wrote this as part of the 25th anniversary of the AMA Marketing series. Purpose’s role, as core to to organization’s reason for being beyond profits, is more important than ever before.

Marketers are now operating in a “new normal”. Transparency and authenticity are the modus operandi by which stakeholders and the public- at-large scrutinize companies. Sustaining corporate character and Trust is the new imperative.  A major finding from the 2012 IBM CMO Study is that “corporate character is key” – how an organization acts is as much, if not more, important that what it says.   And an organization’s behavior is as much a part of the value equation as products and services.

“Citizen” consumers can now “vote” with their purchases and vocalize their commitment to an employer as well as advocate for or against brands and companies. Years of research from diverse sources decisively shows there is a progression and strong desire for brands and companies to stand for more than the bottom line. We call this Purpose – the strategic, emotional driving force behind an organization’s or brand’s core value proposition delivered through a variety of strategies.

In this transparent, interconnected, consumer- empowered marketplace, the 4 “P”s of marketing have forever changed: clear product differentiation and protectable brand affinity so desired by marketers becomes harder to deliver.  Since 2008, Edelman’s goodpurpose research has found that after price and quality, the next trigger for consumers in purchasing a product or service is Purpose, soundly trumping design and product innovation, globally growing +26% over the last five years.

Purpose, we believe, has become the uber “P.” It is a higher-order value that is embedded in a company’s DNA – its culture and operations. Purpose, when strategically crafted to bridge relevance and engagement with core stakeholders – consumers, employees, customers, distributors and communities — provides a humanizing and compelling differentiation for a brand and a company.

The number of proof points is multiplying as CEOs and top executives are shifting their priorities to better balance commerce and social responsibility in an authentic manner. IBM’s Smarter Planet is a cohesive theme that applied IBM’s business expertise to solve critic al business issues with societal impact – water and food logistics, and access to education for example. After it no longer sold the iconic PC products that defined its brand for 25 years, IBM transformed to a higher-value services and software partner. This global strategy created an estimated 40% growth in IBM’s “addressable market opportunity.” [Source]

Dove’s Campaign for Real Beauty sparked a nationwide dialogue about the definition of beauty, in part through partnerships with Boys & Girls Club of America and the Girls Scouts, among others, self-esteem workshops , and the launch of Dove Movement for Self-Esteem. This social mission has boosted overall sales of Dove products 24% during the initial 2005 launch period and has helped over 8.5million young people to date.

A brand defines what your product or service is and what it stands for. Yet, “best-in-class” companies aim higher through the various strategies of Purpose. Purpose creates a more meaningful, sustainable differentiation. Purpose fuels product innovation, growth and sales. Purpose builds and protects corporate reputation as well as engages and inspires customers and employees. What other “P” can achieve that?

 

Carol L. Cone wrote this during her tenure at Edelman as Global Practice Chair, Business + Social Purpose. She can now be reached at ccone@purposecollaborative.com.

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