(red): Selfish giving?

Part one of a two part series by William Zhang

A giant global initiative’ aimed at you…
If I told you that some of the largest multinational corporations in the world have joined together to form a giant global initiative’ which is targeted at you, the consumer, what would you think? With names including Microsoft, Apple, Motorola, Hallmark, Converse, Gap, Emporio Armani, and even American Express, you’d probably think it must be some sort of a marketing conspiracy by the most powerful companies in the world to get us all to spend more money and boost their profits.

What if I told you that these companies are not after your money for their profit, but to help the fight against AIDS in Africa — would you believe me? That these enormous companies, with a combined profit exceeding the GDP of many small nations, are committed to fighting the ongoing struggle against AIDS. And that so far, $100 million has already been contributed by this initiative. That we’re not talking about simple donations and charity, but something much bigger and more sustainable.
red-ipod
Don’t believe me? Just walk down to an electronics store and look for a red coloured iPod. That’s right — a red iPod. Trust me, there’ll be one there. This little red iPod is proof that these huge multinational companies are not all about sales and profit.

What’s so special about a red iPod?

The answer is PRODUCT(RED). PRODUCT(RED) is a global initiative in which some of the world’s largest companies are working together to promote their unique PRODUCT(RED) branded items. What makes these products special is that up to 50% of the profit from their sales is given to the Global Fund, an organisation established to combat AIDS, tuberculosis and malaria in Africa. The PRODUCT(RED) range includes iPods, laptops, credit cards, watches, shirts, shoes and even birthday cards. Usually, there’s little or no difference in price between a PRODUCT(RED) item and a normal one.

aids ribbonAccording to its website, PRODUCT(RED) is neither a charity nor a campaign, but an “economic initiative that acts to deliver a sustainable flow of private sector money to the Global Fund.” The key word here is sustainable. Rather than simply asking these corporations to donate a chunk of money to the Global Fund, a sustainable and longer lasting flow’ of money is created through giving a percentage of the profits from consumer purchases. Sounds good right? Before we can dig any deeper into this issue though, we need to know what exactly holds together the PRODUCT(RED) initiative.

What does the initiative rely on for its success?
While on the surface it may appear that the ultimate aim is to help AIDS victims in Africa, once we look a little closer it becomes clear that all three groups involved (consumers, companies and the Global Fund) are in it for themselves. Ultimately, PRODUCT(RED) is based on the premise that our actions are usually motivated by personal gain.

As consumers, we think that we are getting a great product, while at the same time supporting a great cause and making a statement about our values. In effect though, our actual motivation is the feeling of generosity and satisfaction from knowing that part of our purchase is going towards helping AIDS victims in Africa. It’s this feel good’ sensation which motivates consumers. We’re encouraged to think: “Why not? I’m going to buy this anyway, so why not do some good if it doesn’t cost me much extra?”

The companies involved are also motivated by self-interest, concealed behind the mask of good will’ or charity’. Ultimately, they hope their image and reputation will be enhanced, which will have a positive impact on their profits. After all, profit is the primary goal of private sector business. These corporations are aware that as consumers become more ethically minded, lab-workthey’re more likely to buy products which give them the feel good’ sensation.

Finally, the Global Fund is obviously motivated by the boost to their finances, allowing them to build more treatment centres, research facilities and improve medical supplies in Africa, especially for women and children.

What’s wrong with a bit of self-interest?
Although there is a tendency in society to see self-interest as selfish and egotistic, it is the key factor holding together the PRODUCT(RED) initiative. Like it or not, in this case at least, philanthropy is only a mask for self-gain.

For instance, if the companies involved did not gain from PRODUCT(RED), it’s unlikely that they would have even taken part and the initiative would never have gotten off the ground. In a survey by The Conference Board, a business research organisation, 77 % of businesses said that the needs of the business itself is the most critical factor to affect their giving’ to charity, campaigns or initiatives). This pretty much confirms that corporate philanthropy is a myth.

Likewise, if consumers were not motivated by the feel good’ sensation, the PRODUCT(RED) label would become just another brand among the ranks of Ralph Lauren, VISA and Sony Ericsson. This feel good’ sensation is the major point of difference’ for the PRODUCT(RED) brand — it lets you be both consumeristic’ and socially conscious’ at the same time!

A win-win situation for everyone?

By now, you’re probably thinking: Great! I get an awesome feel good’ product, the companies enjoy some promotion and the Global Fund is able to do more to combat AIDS in Africa. If only it were that simple.

If you read a little more about PRODUCT(RED) on the internet, you’ll find several articles where it is quite savagely attacked . For example, check out Spending to save, (Product)Red: help or hindrance?, or the Buy (Less) Crap campaign, which questions whether shopping really is the answer. Before you make up your mind though, read on to my next article and see why I really think it is worthwhile to support PRODUCT(RED).

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