Here's the math:
BCRF = Breast Cancer Research Foundation
(Mission: To achieve prevention and a cure for breast cancer in our lifetime)
October = National Breast Cancer Awareness month
(In its honor, here's a special, limited edition MICHAEL Michael Kors canvas tote)
Amount going to BCRF = $34.00
(Purportedly, 50% of the proceeds from the sale of this tote bag will be donated to BCRF)
Amount going to Michael Kors = $34.00
Cost of making tote (including overhead and opportunity costs) = your guess...
But is the cost really $34.00 or even close? I doubt it. Needless to say, Michael Kors is probably making a profit out of his act of do-gooding. And perhaps he should! Anyone buying the bag should realize that they are donating $34 to breast cancer research and $34 for the actual bag, which really doesn't sound tooooo bad. On the other hand, we have Coach trying to be a part of the solution as well. Here's what Coach came out with and here's the math:
From left to right: Coach BCRF Key Fob $58,
Coach BCRF Lanyard $48,
Coach BCRF Charm $38
(Available in stores and at Coach.com)
Amount going to BCRF from Key Fob = $11.60
Amount going to BCRF from Lanyard = $9.60
Amount going to BCRF from Charm = $7.60
(20% of the sales proceed will be donated to BCRF)
Amount going to Coach from Key Fob = $46.40
Amount going to Coach from Lanyard = $38.40
Amount going to Coach from Charm = $30.40
Cost of making these accessories = my guess is less than $10 for sure.
If my guess is correct, then Coach gets ~500% of its cost of making these accessories. And they will be nice enough to donate around 25% of their raw profits to BCRF. Well, it's a brand, so the only thing that can be said is that branding and market positioning is important because it will determine the magnitude of your profit margin. To be really fair, at least these accessories are in the same price range as other similar Coach products.
Honestly though, why wouldn't anyone truly interested in helping breast cancer research just give the entire amount that would have been spent on the tote or the key charms to BCRF directly?
It could be that the society produces such charity initiatives to spur on people who otherwise would not have considered giving to breast cancer research. It could be that the people buying pink products are just interested in the merchandising and really don't mind being seen by others (when they carry around such products) as charitable and generous. It is, after all, "cool" to be affiliated with certain charitable causes, don't you think?
No comments:
Post a Comment