So this is my first blog post and it is going to be about CSR.
I came to Canada on the 8th of August for the first time in my life and I still remember the first time I saw a pair of TOMS shoes. It was in Vancouver, when a couple of friends and I were strolling through the UBC bookstore looking to see if we could buy anything for the start of university. I saw a booth selling TOMS and Daniella, my friend, explained to me that they are an established brand who’s known for their good CSR. There was also a big sign saying that they are sending one pair of TOMS per every pair purchased to some child in an undeveloped country (I forget which country it was). Anyways, when Daniella briefed me on the business model of the company, I was very impressed with their marketing aspect of the product and how they managed to target a very big range of customers whilst taking advantage of this very perception-conscious society that we live in. But one thing disappointed me and that was their pricing of these shoes which was approximately $60 on average and the reason I was disappointed was because I thought I had found a company with the perfect business model with a TRUE strong emphasis on their corporate social responsibility.
Perhaps the title of this blog is misleading as the corporate social responsibilities of TOMS are far more unique and greater than many of the retail brands out there but in some ways, the title is correct as their CSR is perceived to be more than what they are actually providing, in other words, overrated.
The reason I was so disappointed with this company was because they are basically deceiving the majority of consumers into thinking that the $60 spent is justifiable while in fact, they aren’t as socially responsible as they seem if you look into their business model a little closer. For example, on their website (http://www.toms.ca/corporate-responsibility/l) they state that their shoes are made in China, Ethiopia, and Argentina. There are (probably) two problems hidden in this statement: 1)With Ethiopia being one of the poorest country in the world, it’s good that they base their production there but the matter of fact is, production based in all three of these countries is for the cheap labour and easier distribution for when they give out their shoes to people in undeveloped countries. 2)It doesn’t state how many of the shoes are created where which means we can assume the worst, the majority is mass produced in China (Come on guys, how cliche can you get?).
Another example, their most effective sales pitch to customers is that they give one pair for every pair purchased to someone in an underdeveloped country(they even have a catch phrase for it: One for One). First of all, this is a very smart marketing move on them as it taps into the most fundamental human want which is that every human being likes feeling better about themselves. But realistically, this will only cost about $5 per pair maximum(no, I didn’t have time to do a full-on research but be my guest) and the production cost will probably be about $5 a pair maximum (again, be my guest) which means their profit-margin is substantially huge. This is the reason why I was so disappointed with the ridiculously high pricing of their products. In the end, they are just another shoe brand who have little to nothing to offer anyone except for those who were sent free shoes. If you look at it this way, buying a pair of Nikes might even be a better way to fight poverty as they provide jobs all over the world and they are one of the bigger CSR emphasized companies.
As I had to write this blog on “ethics”, I couldn’t write much about their marketing aspect of TOMS but I feel that TOMS has a very smart and business model that is well adapted to the 21st century.
Yoshi Murakami
Reference:
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