Download Present Situation and Strategies of Public Welfare Marketing in

Present Situation and Strategies of Public Welfare Marketing in
Chinese Private Enterprises: A Case Study of R Enterprise
ZHOU Hongyong1, RUAN Jiachun, QIU Junjie2
1 School of Business and Management, Shaoxing University, Zhejiang, P.R.China, 312000
2 school of finance, shanghai University of Finance and Economics, P.R.China, 200433
Abstract: According to the existing problems of R enterprise in public welfare marketing operation, this
paper analyzes the causes for immature operations of public welfare marketing in Chinese private
enterprises, and puts forward four suggestions including building a scientific concept of establishing
public welfare marketing, producing public welfare marketing strategies, establishing a complete
system of public welfare marketing and utilizing feasible form for public welfare marketing, in order to
enable enterprises to effectively carry out public welfare marketing.
Keywords: private enterprises, public welfare marketing, problems, strategy
1 Introduction
With the rapid development of science and technology, China’s economy has entered the phase of global
competition. So enterprises must try their best to get rid of their traditional practice of marketing for the
sake of marketing and at the same time shoulder their social responsibilities by implementing “public
welfare marketing” that conforms to social ethics and morals. Public welfare marketing refers to
marketing strategies that the enterprises employ to enable consumers to cultivate their preferences for
the products and primarily choose their products as their purchase decisions, by starting from the point
of human development and social progress, communicating with the consumers through public welfare
activities to establish good company image. In recent years, public welfare marketing has already
received more and more attention as a powerful and influential marketing method. However, because
this is a newly introduced practice and also because the enterprises are strongly influenced by the
traditional Chinese culture, Chinese enterprises always face many problems and traps in the actual
implementation process of public welfare marketing and cannot give full play to the function of this type
of marketing. Based on the problems of R enterprises in operation of public welfare marketing, this
paper analyzes the causes for their immature operation of public welfare marketing in Chinese private
enterprises, and brings up some relevant countermeasures and suggestions in tackling these problems in
the hope of enabling enterprises to effectively implement public welfare marketing strategically.
2 Problems of Public Welfare Marketing in R Company
Table1 Main Methods of Public Welfare Activities and Investment of R company Unit: 10,000 Yuan
Year
2006
2007
2008
Project
Charity
3600
300
400
Social Culture
100
200
0
Educational Development
Internal Culture
Sum
400
60
4160
1000
25
1525
68
0
468
As a big enterprise engaged in producing and managing dying materials, R company enjoys the
reputation of a national key high-tech enterprise belonging to the national top-500 companies, one of the
big international production bases, and a representative Chinese private enterprise. R Company puts
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great emphasis on public welfare activities: sponsoring education and road-building that benefited local
people as well as the society. In total, R Company has invested more than 60 million Yuan RMB in the
activities mentioned above. These activities mainly include charity work, social culture, educational
development, internal enterprise culture and etc. (as shown in Table1), for which the company has
gained many philanthropic awards. However, subjected to traditional Chinese concepts of doing good
deeds without pursuing honorable titles, the development of public welfare sales activities of R
Company still remains in the primary stage, with most of their activities limited to donations, which
indicate that there is still a long way to go to reach the standards of public welfare marketing. In its true
sense this situation is not equal to the public welfare responsibilities the company has already
shouldered.
2.1 Lack of Strategic Orientation
Instead of being simply composed of charity activities, public welfare marketing is an integral
systematic project which runs through the whole marketing link. It not only demands a theme that
agrees with the operational concept of the company to fulfill the company’s social responsibilities, but
also carries out public welfare activities continuously under the guidance of the best public welfare
strategies that can promote the development of core businesses of the company. The continuous public
welfare activities can produce “1+1>2” effect, which can greatly facilitate the company’s development.
Mainly concentrating on items such as charity, disaster relief, education and poverty alleviation, current
public welfare behaviors of R Company are not integrated in its business strategy. Although the
company has participated in a wide range of public welfare activities with great enthusiasm, especially
in some disastrous accidents, these activities only show their Chinese philanthropic mind in business
operations instead of fully interpreting and infusing the core business operational concepts in the
activities, which led to a lack of values and guidelines in public welfare marketing, restricting its
effectiveness. Besides raising the reputation and popularity of the company temporarily, these charity
activities cannot fully encourage the society to better identify the core business concept of the company
or even the company itself, which enormously limited the public welfare marketing effects of the
company.
2.2 Lack of Professional Implementation Department
Public welfare marketing is the common practice of multinational enterprises, and most organizational
structures set up professional departments to take charge of these jobs. Usually, a certain amount of fund
is taken out of the sales revenue at a fixed rate to be allocated to the public welfare business department
of the company. The public welfare business department will select public welfare projects according to
the products and marketing strategies in inspecting projects. In selecting public welfare projects, the
department needs to take the company’s brand strategy into consideration. In other words, it should
check whether the project is in agreement with the culture and values of the company, and closely
combine the public welfare projects and products with services provided by the company together to its
best ability.
It’s quite another matter in R Company, as the R Company has no specific department to implement
public welfare marketing, which makes the company seldom think about strategy establishment of
public welfare marketing, let alone utilizing charity sponsors as a marketing strategy. The causes for the
two problems are as follows: firstly, the ambiguity of the entrepreneur’s behaviors and the enterprise
behaviors makes it hard to define the charity behaviors as individual behavior or collective enterprise
behavior, leading to discounts in effects of public welfare marketing, which is not equivalent with the
current public responsibilities shouldered by the company; secondly, restricted by outdated public
interpersonal relationship and traditional methods, the company doesn’t know how to utilize charity
activities to do marketing, and it is very likely to lose good opportunities in a confusing state, or may
even create a bad public image of “eagerness for quick success and instant benefits” and “selfish and
unjustified purpose” because of untimely over-publicizing and media hype, drawing public criticism and
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becoming a bad example.
2.3 Lack of the Consciousness of Combining Public Welfare Marketing with End Marketing
Activities
The basis of public welfare marketing is charity activities, and charity activities in public welfare
marketing are not purely philanthropic. Enterprises must combine charity with public welfare marketing,
and increase popularity of the company through charity activities to cultivate consumers’ preferences for
their products and services, maximize the enterprise profits and achieve win-win-win situation of the
enterprise, public welfare organizations and specific groups.
However, charity activities of R Company do not combine charity activities with enterprise marketing in
many circumstances to cultivate consumers’ preferences for their products and services or increase
popularity of the company through charity activities. Its understanding of charity activities only stays at
the low level of paying back to society, which led to the low level of public welfare marketing whose
purpose is only to blow out a slogan without substantial contents. Because of the lack of public welfare
marketing consciousness, the company usually downplays the potential opportunities hidden in public
welfare marketing. Many donating behaviors are blind or without plans, which will obviously
significantly discount its influences and fall short of marketing performances.
3 Countermeasures for Private Enterprises to Enhance Public Welfare Marketing
Performances
With the progress of the times, advance of consumers’ consciousness and rising standards of the
company’s self requirements, public welfare marketing will become more and more prevalent. In market
competition, enterprises will develop itself while consciously shouldering their own social
responsibilities through establishing a public welfare marketing system, and will gain a higher level of
trust in the public, forming enormous intangible assets and making its products and services more
attractive to consumers.
3.1 Establish Scientific Public Welfare Marketing Concept
In a time of product homogenization, the power of brand mainly originates from customer relationships
while consumers mainly acquaint themselves with products through enterprise recognition. Therefore,
charity activities in public welfare marketing are not purely philanthropic, but designated marketing
activities that enable consumers to feel the enterprise brands and touch the products, achieving the
unification of interests of consumers and enterprises. Public welfare marketing is marketing behavior
that brings “substantial results” to the enterprise by carrying out marketing activities “effective for a
period of time” based on social hotspots. On the basis of public benefits, the company should find out
the conjunction point of time and brand, establish the connection between brand and event, and
publicize appropriately to realize the marketing behavior of the company by giving consideration to both
public benefits and enterprise substantive results. Charity needs to be done while benefits should not be
abandoned. Profits are the life of enterprises while collectivity and public benefits are emphasized in
traditional Chinese culture. Therefore, public-benefits-before-profits in speaking and
profits-before-public-benefits is absolutely not hypocrisy, but a public welfare marketing strategy fit for
Chinese culture.
3.2 Draw Up Explicit Enterprise Public Welfare Marketing Strategy
Domestic enterprises lack systematic and strategic planning in public welfare marketing. The
understanding of public welfare marketing of some enterprises is taking out an amount of money to do
charity work and a large amount of money to publicize it, which brings huge profits. Actually, this is a
kind of event marketing whose purpose is to form and enlarge news exploding point through public
welfare activities and events, but this cannot maximize the marketing performance. Therefore,
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enterprises must draw up public welfare marketing strategies and planning, with a long-term view
instead of current benefits. As the cycle of public welfare marketing input is relatively long, short-term
investment cannot product obvious effects, and the eagerness for quick success and instant benefits
needs to be overcome.
Although Chinese private enterprises constitute the backbone of Chinese public welfare and charity
enterprise from statistical results, people often feel that multinational tycoons donate in more projects
and make a greater contribution to public welfare enterprises. The vast contrast between statistical
figures and cognition indicated the lack of public welfare marketing strategies. Therefore, companies
should have a strategic view for enterprise public welfare activities, bringing competitive edge to the
company while solving social problems. Enterprises should select social problems that intersect with
their own businesses to create shared values of enterprises and society.
3.3 Establish a Complete and Thorough Public Welfare Marketing System
Although Chinese entrepreneurs, especially those of private enterprises, usually engage in public
welfare activities individually, this kind of donation behaviors is charity behavior instead of public
welfare marketing. In the long term, however, public welfare marketing will become an indispensable
marketing tool and important means for companies to fulfill their social responsibilities while realizing
self-value elevation. Development of public charity enterprises and government’s vigorous support will
eventually make public welfare enterprises become common practice of companies. Therefore, Chinese
enterprises should establish public welfare charity departments to consciously implement public welfare
marketing as the necessary option of marketing innovation and fulfilling citizen obligations. Chinese
enterprises should learn from the mature public welfare marketing system of foreign-funded
multinational companies and determine the donation amount by the whole development strategy of
enterprises. In the meantime, the enterprises should implement overall public relation publication
strategy in all stages of charity behaviors to form a complete and rational public welfare marketing
system.
3.4 Utilize Various Feasible Public Welfare Marketing Forms
In selecting marketing forms, enterprises should opt for effective marketing behaviors according to
production and operational development stages and specific circumstances. Against the same economic
background, some enterprises need a kind of public welfare marketing with short-term effects, while
others need long-term effects; some enterprises need public welfare marketing while others do not. So
enterprises should determine whether they really need public welfare marketing through rational
judgments according to different development stages. Further on, in cases that public welfare marketing
is necessary, companies should determine which form of public welfare marketing should be adopted
and how it can be organically combined with other forms of marketing in search of the most appropriate
marketing mix for the companies.
4 Conclusions
Influenced by traditional Chinese culture, Chinese enterprises face many problems and traps in the
implementing process of public welfare marketing, and cannot give full play to its functions. Enterprises
must establish scientific public welfare marketing concepts, set up explicit public welfare marketing
strategies, build complete and thorough public welfare marketing system, and utilize feasible public
welfare marketing forms, etc., so that public welfare marketing can be smoothly and effectively carried
out.
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