Scott Pledges 5 Cents to Charity for Each Sale of New Products
Scott Paper Co. joined a growing list of companies embracing charitable causes as a way to market their products and promised Wednesday to give a nickel to charity for each purchase of its new line of paper towels and other household products.
It became the first major U.S. firm to establish a line of products whose sales would always generate money for charity, the company said.
Every time a consumer purchases one of Scott’s seven Helping Hand products, Scott said it will donate 5 cents to a group of six charitable organizations. Initially, Scott will limit sales to stores in Southern California, Las Vegas, Phoenix and Tucson in order to assess the viability of the new line, and it hopes to raise $1 million in the first year after the products arrive on store shelves June 1.
The new products include paper towels, facial tissue, napkins, bathroom tissue, fabric softener, trash bags and kitchen bags. They will be priced in the middle of the company’s product line. Paper towels, for example, will cost about 85 cents.
J. Richard Leaman, president of Scott’s packaged products division, said in a Los Angeles news conference Wednesday that the Helping Hand line “shows more promise than any other product launch in the history of the company. . . . And the (financial) benefits will flow back into the community. Everybody wins.”
The new products were developed after two years of super-secret meetings in which Scott secured written confidentiality agreements with outsiders before the company even discussed their plan. In addition, Scott did not test market the new products out of fear that word might leak to competitors.
Scott’s goal is to raise $1 million each each year for six charitable health organizations involved with helping children: United Cerebral Palsy Assn., Cystic Fibrosis Foundation, National Easter Seal Society, Leukemia Society of America, March of Dimes Birth Defects Foundation and National Assn. for Sickle Cell Disease.
Another goal, some experts believe, is to improve Scott’s position in the competitive paper products market, which has been hurt by competition from inexpensive generic and private-label brands.
“One of the biggest penetrations for the generic class has been in the paper industry,” said Dennis Rook, assistant professor of marketing at USC. “Scott has a good image for quality,” Rook noted, “but consumers are not very brand loyal when it comes to paper products.” They are more price sensitive, he said.
It is not the first time that a company has turned to cause-related marketing for a sales boost.
American Express, promising donations for restoring the Statute of Liberty each time its products or services were used, raised more than $1.7 million from its credit card users and other consumers. And the Texize division of Morton Thiokol, which makes Fantastik spray cleaner and Spray ‘N Wash, among other products, raised $707,000 between August and December of last year when it promised to donate 20 cents to the National Center for Missing and Exploited Children each time consumers redeemed a coupon for its products.
Although corporate donations last year amounted to less than 10% of the $66 billion that individuals gave, it increased at a faster rate than any other group--rising 13% to $4.3 billion in 1985, according to the American Assn. of Fund-Raising Counsel in New York.
Scott, which in 1985 had net income of $201 million on sales of $3 billion, gave $1.5 million to charity last year. Officials said the success or failure of the Helping Hand products will not affect Scott’s future charitable giving.
