Toms shoebox promoting the “one for one” deal
I am opposed to the “one for one” business model from a humanitarian viewpoint because although it is very effective marketing, the product given to the customer is often of bad quality. Products should be to alleviate “pains” in the most convenient and affordable way possible, providing the highest marginal utility. If the “one for one” model is implemented, that would cause there to be less consumer surplus.
In addition, the model does not provide long term solutions; instead actually provides a negative impact to the same communities it is trying to assist.
“By undercutting local prices, Western donations often hurt the farmers, workers, traders, and sellers whose success is critical to lifting entire communities out of poverty. That means every free shoe donated actually works against the long-term development goals of the communities we are trying to help.” – Cheryl Davenport
I agree with and support the “one for one” business model from a business viewpoint because put simply, “Toms isn’t designed to build the economies of developing countries. It’s designed to make western consumers feel good”. Providing a strong enough incentive for a consumer to purchase your product, even if the incentive is a false sense of goodwill, means that the marketing is working. Toms has implemented this model in a successful way, with enough feelings of reliability given to the consumers to drive sales, and ultimately make profit.
Sources:
[1] http://www.fastcoexist.com/1679628/the-broken-buy-one-give-one-model-three-ways-to-save-toms-shoes