Essay Instructions: Please answer each question with about a hundred words. The case study question will need to be a little over a hundred.
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Discussion Questions 7
1. Discuss the concept of unit pricing. Who uses it, and how does it impact consumer behavior in the marketplace?
2. Discuss the six "Consumer Bill of Rights" in the United States?
3. Why do people shoplift? What are some of the explanations that your book gives to account for shoplifting behavior?
Case Study 7
Ben & Jerry?s (http://www.benjerry.com)
By M. Joseph Sirgy
A-1 The Company
Ben & Jerry?s is a top maker of superpremium ice cream. Co-founded by Ben Cohen and Jerry Greenfield in 1978 in a renovated gas station in Burlington, Vermont, the company was bought by consumer products giant Unilever (http://www.unilever.com) in 2000. The company sells ice cream, ice cream novelties, and frozen yogurt with names such as Phish Food and Cherry Garcia. With markets including the United States, Canada, Mexico, and Europe, it also franchises or owns more than 230 Ben & Jerry?s ??scoop shops.?? Ben & Jerry?s donates $1.1. million of pretax profits to philanthropic causes.
The original owners, Ben and Jerry, took special pride in creating and testing original flavors, instead of allowing food scien- tists to do these chores. In testing those original flavors, the found- ers made sure that testers ate an entire tub before rating the taste. Ben & Jerry?s ice cream stood out from a crowded field of com- petitors largely because of the personalities of the founders.
In 1978, Cohen and Greenfield embarked on their mission to build an ice cream company by taking a correspondence course at Penn State on how to make ice cream. The same year, Ben and Jerry opened their first ice cream store in Vermont. In 1980, the founders began distributing their ice cream to local grocery stores. Four years later, Ben & Jerry?s filed suit against Ha ?agen-Dazs (and the parent company, Pillsbury) because Ha ?agen-Dazs had attempted to limit the distribution of Ben & Jerry??s ice cream in Boston. In 1985, Ben
& Jerry?s built its ice cream manufacturing plant, established its headquarters in Vermont, and created the Ben & Jerry?s Founda- tion. Nearly a decade later, in 1994, Ben & Jerry?s began to distrib- ute its ice cream (in pints) in the United Kingdom. Also in 1994, the company began a national search for a new CEO, doing so in a very innovative way. Ben and Jerry?s held a ??YO! I?m Your CEO!?? contest, inviting 100-word applications from anyone interested. In 1999, New York University?s School of Business ranked Ben & Jerry?s as first for its stance on corporate social responsibility. In 2000, Unilever was successful in acquiring Ben & Jerry?s.
A-2 Company Image
Ben & Jerry?s Homemade, Inc., has an image of being independent, earthy, and hippie-like, an image ascribable to the company?s founders, Cohen and Greenfield. Over the years, the founders made their brand of ice cream stand out by developing goofy flavor names (occasionally linked to their favorite musicians, such as Jerry Garcia and Phish) and through their stance on the environment.
A-3 Promoting the Environmental Cause
Although Ben and Jerry?s has been sold to Unilever, the environ- mental cause remains linked with the brand name. For example, the most recent cause-related tie-in has been the Dave Matthews Band. Matthews has put his own ??green?? philosophy on the new flavor, One Sweet Whirled, a play off of his song ??One Sweet World.?? The promotion campaign encourages the reduction of greenhouse gases. Marketers at Ben & Jerry?s have held One Sweet World Interactive Events at Matthews? concert venues, offering tastes of the new product and giving information about how to help reduce global warming. The same information can be found on their website (http://www.onesweetwhirled.com). At the retail level, Ben & Jerry?s is setting up ??action stations?? to encourage people to become active in the environmental movement. A portion of sales goes to a con- sortium called Save Our Environment, to green nongovernment organizations (NGOs), such as the Sierra Club (http://www.sierraclub. org), and to the World Wildlife Federation (http://www.wwf.org). To learn more about the consortium, visit its website at www.Save OurEnvironment.org.
It seems that Ben & Jerry?s is countering the Bush Adminis- tration?s stance on the environment. The Bush Administration has failed to sign the Koyoto Treaty, which puts pressure on govern- ments to take measures to reduce toxic gas emissions. The same administration also has pushed hard to open the Alaskan National
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660 Case A Ben & Jerry?s (http://www.benjerry.com)
Wildlife Refuge to oil drilling, despite the fact that the majority of Americans wants a cleaner and safer environment. According to Gallup, 60 percent of Americans favor energy conservation, 72 percent support tougher auto emissions standards, 83 percent favor higher standards for corporate pollution, and 82 percent want tougher enforcement of environmental laws.1
A-4 Effectiveness of the Promotion Campaign
Who buys Ben & Jerry?s One Sweet Whirled brand of ice cream? Mostly young adults and the baby boomers. This ice cream is essentially flavored with caramel, coffee, and marshmallow. Amer- ican Demographics (http://www.demographics.com) reporter Mat- thew Grimm believes that Ben & Jerry?s environmental campaign is not making much of an impact because the message is not reaching mainstream America.1 He reports the results of a survey of the Gallup organization that tracked American consciousness of global warming. The survey results indicated that consciousness of global warming rose from a low of 24 percent in 1997 to a high of 40 percent in 2000, but then fell to 29 percent in 2002. September 11 and the economic recession made environmental issues still a lower priority in 2003.
A-5 Using Music to Help Provide Aid in Sudan
Jesse Brenner, a 23-year-old senior at Wesleyan University, studied abroad in Botswana in 2003 and came back determined to help people caught in the escalating ethnic violence in Darfur, Sudan. Brenner with his friend, Eric Herman, started Modiba Records, focusing on African music. The Afrobeat Sudan Aid Project (ASAP) is the label?s first release, a compilation of African-beat music with 100 percent of the proceeds going to Kebkayiah Smallholders Charitable Society, a com- munity group that helps the Sudanese find food and shelter.
When Brenner approached Ben Cohen for startup funds, Cohen fronted Modiba the cash needed for production and legal costs (about $10,000), while Brenner secured the African artists through connections from his semester abroad and New York?based music organization Afropop Worldwide. Then iTunes, Apple?s (http:// www.apple.com) successful Internet music store, signed on as a pro-bono distributor. Within a week of the launch (in early Decem- ber 2004), ASAP had already cracked the iTunes top 30 albums chart, sharing space with the likes of Shania Twain and U2.
A-6 Largest Baked Alaska for Earth Day
In 2005, Ben & Jerry?s decided to do something about Congress? decision to open up the Arctic National Wildlife Refuge for oil drilling. The company created the world?s largest Baked Alaska for Earth Day 2005, placing the 1,140-pound, 4-foot-tall dessert made from Ben & Jerry?s Fossil Fuel flavor in front of the Capitol. What was the message? Drilling in the wildlife preserve would cause environmental damage. This event received more than 30 million media impressions. The cost of the event was a miserly $40,000.
A-7 Taking on the Issue of the Decline of
Family-Owned Farms in the United States
Ben & Jerry?s launched an ad campaign to address the hot issue of the vanishing family farm. In the ad, a farmer by the name of Mike Eastman speaks about his dairy farm in Addison, Vermont. The
farm is operated by his family (he and his wife and children). His farm is one of the 520 farms in a cooperative that supplies milk to Ben & Jerry?s. The ad addresses the reality that family-owned farms are losing business and government subsidies to large factory farms. Ben & Jerry?s website and ice cream stores offer more information on how to help save family farms.
A-8 Other Elements of the Marketing Mix
The company is implementing what it preaches to others. Ben and Jerry?s is evaluating its refrigeration systems to reduce CO2 emis- sions, looking at alternative energy sources, and encouraging its own employees to buy and consume products in ways that can reduce CO2 emissions.
Ben & Jerry?s truck fleet uses clean renewable energy from Native Energy, a Vermont-based energy provider with methane-capture, wind, and solar projects. The company has also introduced a video game at www.lickglobalwarming.com. The video game is designed to motivate kids to make sound environmental decisions like recycling and driving a fuel-efficient car to win backstage passes to a Guster concert.
A-9 Ben & Jerry?s OriginalValues
Many social critics are positing the question, ??Can a large company take over a socially responsible small company and still act socially respon- sible??? Ben & Jerry?s has been under Unilever?s ownership for about 8 years. Does Unilever have the same ethical image as Ben & Jerry?s? Are consumers even aware that Ben & Jerry?s is no longer truly Ben & Jerry?s? Does the change of ownership really matter? Can a smaller company built on a different set of values really operate comfortably as a multinational company? Ben & Jerry?s relationship with Unilever remains an uneasy one. In 2005, a social audit highlighted poor morale among employees. Ben & Jerry?s employees are questioning whether the company is simply a Unilever marketing operation that uses Ben & Jerry?s reputation for social responsibility to promote sales.
Discussion Questions
1. One of the important consumer rights is the right to a healthful environment. Ben & Jerry?s is a company that advocates sustainable consumption. How does it do this? Read the section on consumer rights in Chapter 16 and discuss.
2. Do you believe that business should be involved in advocating causes like sustainable consumption? How do you feel about cause-related marketing in general? Read Chapters 16 and 17 and discuss.
3. Do you believe that Ben & Jerry?s cause-related marketing campaigns are successful? Evaluate the company?s environmental campaign using the principles specified in the Communication and Persuasion.
