Tuesday, April 11, 2006

When Buying, It's Your "State" Of Mind That Matters

My Brand, My Cause - For some Americans, how you vote is a big influence on what you buy ... and where - Image Credit: Business Week

Many companies factor in the capitol consequence of corporate activism. Marketing and public relations departments throughout the business world are beginning to realize that customers are allowing their political views color or shape their purchasing patterns.

Red state, blue state, it is all a state of mind when a customer makes the choice to shop at your store or buy your products. People, more often than not, are voting with their pocket books in real time.

Excerpts from Business Week, issue release APRIL 17, 2006 -

Companies In The Crossfire
The politically passionate are taking aim at businesses they see as repugnant. Red or blue, they can be a PR nightmare

When Martha E. Ture took a road trip from Indiana to California on I-80, she ate at Subway restaurants rather than Wendy's (WEN ) or McDonald's (MCD ). When she last flew to Las Vegas, she took United Airlines, not American or Continental. When she drinks beer, Ture, who describes herself as a "writer, singer, guitar picker, nature lover, [and] politico," eschews Coors (TAP ) for Sierra Nevada. She stays at Hyatt hotels (never Marriott), and, when she visits a big-box discount store, she always patronizes Costco (COST ), not Wal-Mart (WMT ).

Then there's Jennifer Giroux of Madeira, Ohio. The mother of nine, a registered nurse and Christian-bookstore owner, always gets her pizza at Domino's. She never takes the kids to Ben & Jerry's, opting instead for Cincinnati hometown favorite Graeter's Ice Cream. At the mall, she won't allow the family to walk anywhere near Abercrombie & Fitch, famous for its suggestive advertising. And when she does laundry, and she does a lot, she never buys Procter & Gamble's Tide detergent or Bounce fabric softener.Ture and Giroux don't have much in common. But they do share a trait: Their product choices are driven not by low price or customer service, but by politics.

Like millions of Americans, these two consumers choose -- or avoid -- certain companies because of the political donations of their management or the controversial causes they support.
Crisis communications strategists say some companies get it right. They cite P&G and Miller Brewing Co. for responding to incipient crises by reaching out to angry consumers and communicating a concise, consistent, nonpolitical response. But others only compound their woes. Ford (F ) and Microsoft Corp. (MSFT ) changed positions in their attempts to appease critics, only to face an even stronger backlash from the other side.
Boycott efforts sometimes veer into slapstick. In 2004, Teresa Heinz Kerry, widow of Senator H. John Heinz III, made headlines campaigning for her second husband, Democratic Presidential candidate John F. Kerry. Conservative talk-show hosts told red voters to buy new W Ketchup instead of H.J. Heinz' signature product. The upstart's slogan: "You don't support Democrats. Why should your ketchup?" Heinz limited the damage by quickly issuing a statement noting that Mrs. Kerry had nothing to do with the company. One corporate counselor says Heinz let the world know that "Teresa is not on the assembly line stomping tomatoes, and the money is not going to her.

"Three conservatives angry at Bennett Cohen and Jerry Greenfield, the liberal founders of Ben & Jerry's Homemade Inc. (UL ), launched Star Spangled Ice Cream in 2005. Its flavors include Iraqi Road, I Hate the French Vanilla, and Smaller GovernMINT. "We're trying to appeal to conservatives, red states, and NASCAR dads who like Ben & Jerry's ice cream but can't [swallow] their politics," says Vice-President Richard Lessner. The boutique brand is available online, at retail outlets in the Mid-Atlantic region, and at 10 military bases in Texas. Lessner says its sales continue to build as conservatives talk it up and spoon it down.
Take Wendy's, for example. Although the hamburger chain's PAC has given 93% of its campaign contributions to Republicans over the past five years, it views itself as a "nonpolitical company" that does not take positions on controversial issues, says spokesman Denny Lynch: "We serve customers on both sides of the aisle." Wendy's backs winners, he says, and today those incumbents are mostly Republican. "We're not a red company," Lynch says. "If Democrats start winning, we'll move our money to Democrats. It's just business."

Other companies say it's better business to steer clear of politics. Costco has won praise from liberals as the un-Wal-Mart, with higher wages and better benefits. But Costco CEO James D. Sinegal has not created a corporate PAC because "we don't believe a public company should take shareholders' money and support political candidates or causes." He and Chairman Jeffrey H. Brotman donate heavily to Democrats, Sinegal says, "but we do it with our own money. I'm a merchant, not a politician." Most American merchants would agree -- if only the activists would leave them to their business.
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