Wednesday, July 23, 2008
Marketing Ploy: "It's for a Good Cause."
Just for a a little context, my liberal friend recently sent me an e-mail with a link to the Thanksgiving Coffee Company, which purports to better the lives of poor African coffee farmers by buying coffee from them at the Fair Trade price and to bring together Christians, Muslims, and Jews by having them plant coffee together. She wanted me to start buying my coffee from this company because it was for a "good cause." Below was my reply:
"This is interesting Laurie. Well, as sort of a coffee snob, I'm always looking for great coffee. I visited the website more out of an interest in the coffee than out of an interest in the company's purported "good cause." My government taxes me aplenty and sends much of it as aid to Africa and beyond, and obviously, no one appreciates our generosity, so, forgive me if I'm not constantly looking for ways to give away my hard-earned money.
At any rate, I noticed a couple things about this company. But here's my preface: I praise the creative entrepreneurial spirit of the CEO. It seems these days, for good or ill, companies are finding that a great way to sell a product (that perhaps wouldn't survive in a competitive market that runs purely on quality) is to tap into people's conscience. As a free-marketeer, I don't have any qualms about that. A great example of such a company is the Ethos Water Bottle Company recently bought up by Starbucks. It purports to give "a portion" of the price to help a "good cause." Well, the founders got a huge payout by Starbucks when it was bought out. (But I've always wondered whether they knew that their plastic bottles were a large contributing factor to the world's pollution problem.)
Anyway, you can correct me if I'm wrong, since I only briefly perused the website, but they purport to purchase a pound of coffee (16 oz) from the cooperative at the Fair Trade price of $1.61. And they also purport to send the cooperative an extra $1 for every pound as part of their profit-sharing plan, which, by the way, they make it sound like the farmers are seriously partners to this enterprise (uh, not quite).
The company then sells 12 oz (less than a pound) at a range from $10.50 up to $25! So, looking at this in the light most favorable to the company, for every 12 oz of coffee they sell at $10.50, they're giving back less than $1. Don't forget the $1.61 is their overhead. So in essence, the company is marking up their product almost seven-fold! Just to put this in perspective, this mark-up is very similar to how much big (bad) multi-national companies like Walmart and Nike mark up their products after buying them from third world countries like Africa. What would people say if the CEO of Nike said, well, we're giving jobs to these poor indigents, giving them a better life, so buy from us. People would laugh.
Moreover, they have a coffee bag with Che Guevara on it, and appear very proud of it. I mean come on, he was to Castro what Himmler was to Hitler - his chief executioner! He killed hundreds and thousands of people with his travelling death squad. He set up death camps where he killed gays, dissidents and people with AIDS. To spin it in another way, he was a miserable failure. He was Castro's bitch his whole life and nothing but a wanna-be revolutionary. I mean, if you want to lionize a totalitarian on your coffee package, put Stalin, or Mao, or Hitler.
Point being, don't get sucked into their marketing campaign. Like all other marketing campaigns, this one is solely to turn a profit, and a big one at that. Again, I'm not saying there's anything wrong with turning a profit, but, I do have a problem with companies feigning righteousness and trying to pull a quick one over consumers, when, in fact, they're like any other company operating out of self-interest and profit. For these reasons, I won't buy coffee from this company. But who knows, their coffee could be really really good, in which case, they don't have to feign anything! Sad...
By the way, this is good material for my blog. :) Thanks."