Exploring Market Behavior and the Relationship Between For-Profits and Non-Profits
Two entities: 1) a company and 2) a charity (non-profit). The company produces a product valued at $18. The charity solicits donors to give $20. You, the consumer (donor), initially do not give to the organization and are not interested in purchasing the product. The charity allies with the company. The company marks up the product by $2 and relaunches the product now with a gold star symbolizing their support of a cause (the charity). The company then markets that it will give 10% of each unit sold to the charity. You purchase the product under the pretense of activism. Realizing the company will donate only $2 per unit and profit $18 per unit you advocate that the company should give 100% especially since the company is worth millions. There are many questions to explore in this conundrum. Why not give the $20 directly to the charity? Why not purchase the product at $18? Is there anything emblematic about possessing the product in relation to the charity? Why place the onus on companies to give? What is the attraction of purchasing a product from a company associated with a charity? How did this phenomenon come about? Why has this scenario become common play in the marketplace?