|The Business Response to HIV/AIDS: Innovation & Partnership (UNAIDS, 1997, 60 p.)|
|Examples of Company Actions on HIV/AIDS|
A. THE COMPANY
United Distillers is the world's largest and most profitable spirits company. Its core business is the worldwide marketing of prestige brands such as Johnnie Walker Scotch whisky and Gordon's gin, both leading products in their category The company also produces three other gin brands, one of which is Tanqueray, the number one premium imported gin in the US market. United Distillers is part of UK-based Guinness plc, and it contributed approximately 75% of the Group's US$ 75 billion revenues in 1996.
B. REASONS FOR ACTION ON HIV/AIDS
Guinness Plc and United Distillers have a commitment to corporate responsibility globally, and have adopted a number of approaches to the issue of HIV/AIDS, including employee protection work around the world and financial support for the Confederation of Indian Industrys "Aids in the Workplace" initiative (see Profile 4).
In addition, United Distillers has for some time shown creativity in linking social and environmental issues to the marketing of its brands. For example, in Taiwan the Johnnie Walker "Water of Life" project linked the sale of the product to raising funds to preserve the country's rare and endangered cherry salmon.
This type of cause-related marketing differs from the company's philanthropic programme. Support for HIV/AIDS initiatives at United Distillers is integrated into the marketing strategy and is paid for from marketing budgets because of the clear commercial benefits to the brand. Benefits may include greater name recognition, enhanced customer base and loyalty, and increased sales during the period of the promotion.
C. EXAMPLE ACTIONS
In 1993, the organisers of the first California AIDS Ride (in which individuals are sponsored to ride by bike between major cities), were looking for a major sponsor for the event. They made contact with Schieffelin and Somerset, the United Distillers subsidiary that imports and markets Tanqueray Gin in the US. The subsidiary took a leap of faith and decided to back the event, despite no evidence it would be a success. It has continued to sponsor the rides since then.
Schieffelin and Somerset is devoting up to 20% of its annual American marketing budget of US$ 27 million to support the event. It is doing so for clear commercial reasons. The Tanqueray brand's target audience is young drinkers aged between 21 and 34. In focus groups and market research, they told the subsidiary that HIV/AIDS was an issue of great concern to them. Schieffelin and Somerset's former vice-president and product group director Deborah Callahan told the New York Times that the sponsorship: " ... makes a statement that some people are uncomfortable with. But that's just fine ... because the brand is aimed squarely at consumers who see themselves as a little more open minded, a bit on the leading edge; so the promotion fits." 1
1 New York Times, 24 July 1995.
D. RESULTS TO DATE
The first AIDS ride in California in 1994 raised US$ 1.6 million pledged to 500 participants, and the second in 1995 raised US$ 5.3 million, the number of riders increasing to 1,825. By 1996, five such rides sponsored by Tanqueray were held in the US. Attracting 12,000 riders, the five rides raised more than US$ 25 million to support 28 HIV/AIDS projects in the 10 host cities.
By August 1997, four rides had been completed, raising US$ 20 million (California alone raised US$ 9.4 million with 2,200 riders). The Boston to New York Ride in September was budgeted to raise a further US$ 6 million, and with 5,000 people signed up, the organisers closed registration for the first time as they were unable to safely accommodate more riders. The total raised since 1994 is US$ 60 million.
The campaign is now the biggest single AIDS fundraising event in the US, and it won the 1995 Brandweek magazine's gold award for the best cause-related marketing promotion in the US; Brandweek is the US's leading marketing magazine.
Commenting in the New York Times on the runaway success of the promotion, Journalist Stuart Elliot wrote: "To be sure, a growing number of advertisers are seeking to enhance their appeal to consumers by linking themselves with social, philanthropic and political issues in a strategy known as cause-related marketing. Few, though, spend such a large portion of their budgets on those programmes.. Even fewer are participating in AIDS-related causes, given the stigma that still surrounds the disease. And fewer still are doing so as part of mainstream marketing programmes rather than solely in campaigns aimed at homosexuals." 2
Many US commentators have welcomed the decision by Schieffelin and Somerset to take a lead in supporting AIDS causes through marketing dollars. The cash generated has far exceeded anything given by any private company from its philanthropic budgets, and HIV/AIDS non-profit groups in the US have benefited handsomely. In return, the brand has received excellent publicity that has definitely been good for business a clear "win/win" situation.
Contact: Peggy Bernstein
Schieffelin and Somerset
Two Park Avenue
New York, NY 10016
Tel: 1 212 251 8274
Fax: 1 212 251 8382
AIDS Rides is at http://www.aidsride.org
Note: On 17th December 1997 Guinness plc merged with Grand Metropolitan plc to from a new company called Diageo