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CASE EXAMPLE

(PRODUCT) RED and Gap

(RED) was created by Bono and Bobby

Shriver, Chairman of DATA, to raise
awareness and money for The Global Fund
by teaming up with the world’s most iconic
brands to produce (PRODUCT) RED-
branded products. A percentage of each
( PRODUCT) RED product sold is given to
The Global Fund. The money helps women
and children with HIV/AIDS in Africa.1

The (RED) initiative was set up in

early 2006, with Rwanda selected as
the initial country to benefit from sales
of the (RED) products. The first products
launched in the UK were the (PRODUCT)
RED American Express card and a
(PRODUCT) RED vintage T-shirt from
Gap launched in March 2006. Other
companies joining the scheme included
Source: http://www.joinred.com/manifesto.asp.
Motorola, Converse, Apple (introducing a
(PRODUCT) RED iPod) and Emporio
Armani. There was also a special (PRODUCT) RED
edition of the Independent, guest edited by Bono. Ad Age figure of 100 million was merely a ‘phantom
Support for the (RED) campaign has come from Bill number pulled out of thin air’.
Gates, interviewed in Advertising Age: ‘Red is about An article in the Independent went on to do its own
saving lives . . . if there’s not enough money to buy mathematics, concluding that the figure raised was
drugs, people die, and so we can say, “Hey, let’s $25 million in six months and that, on an advertising
just let that happen,” or we can take all the avenues investment of $40 million, this was a ‘staggeringly good
available to us.’ He acknowledged that this included rate of return’.
governments being more generous, but also believed They went on to argue:3
that consumers wanted ‘to associate themselves what the RED initiative has set out to do – and with some
with saving lives’ and that what Gap or Armani success if $25 million in six months is half the profits RED
were doing through (PRODUCT) RED provided this products would have made – is create a stream of revenue
opportunity. for the fight against AIDS in Africa which will far exceed
Other commentators were not so positive. Another one-off payments from corporate philanthropy budgets. It
2 looks set to create a major source of cash for the global
article in Advertising Age claimed that the campaign
fund, and one which is sustainable. It is an entirely new
had raised only $18m (A15m; £10m) in a year despite a
model for fund raising.
marketing outlay by companies involved in the scheme
(including Gap) of $100m. Gap was the biggest spender But wouldn’t it be better if people simply gave the
here with an advertising budget of $7.8m. A money that they spend on the products directly to
spokeswoman for (RED) claimed that the charity? ‘If only that were the choice. But most people
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118 CHAPTER 4 STRATEGIC PURPOSE

wouldn’t give the cost of a new ipod to the global fund.’ designed to generate awareness and money to alleviate
They continued: suffering in Africa. . . . It is pledging to give half of the profits
from its iconic red T-shirts and leather jackets to Aids/HIV
The money RED has raised means that some 160,000
relief. The campaign was launched here last week, with the
Africans will be put on life saving anti-retrovirals in the
always crucial imprimatur of Hollywood. It features stars
coming months, orphans are being fed and kept in school
such as Steven Spielberg and Penelope Cruz in red T-shirts
in Swaziland and a national HIV treatment and prevention
with one-word messages that say, with a modesty that
programme has begun in Rwanda.
doesn’t fit quite as well as the clothes, INSPI(RED) and
ADMI(RED). The message is that, by buying these products,
(RED) Gap ordinary mortals such as you and I (well, all right, you) can
look like Hollywood stars and save lives in Africa too. You
On their website Gap’s Senior Vice President for can almost taste the pity and charity oozing from Ms Cruz’s
Social Responsibility, Dan Henkle, explained Gap’s pouted lips, the love pouring from Mr Spielberg’s dewy
commitment in relation to its work in Lesotho. Lesotho eyes.
has a population of 1.8 million, with almost one-third Sorry to play the curmudgeon here. But this latest
HIV positive. Gap has invested significantly in the concession to the galloping forces of corporate social
responsibility, far from helping the benighted of the world, is
manufacture of T-shirts in that country, as well as in
actually going to make things worse. I am sick and TI(RED)
community initiatives, for example in HIV testing and
of companies trying to demonstrate to me how seriously
treatment to garment workers. It has also promoted
they take their supposed duty to bring joy to and remove
forums to encourage the growth of the garment industry pain from the world. They can take their charge card (S,
in that country. CREWnecks and mobile phones and ask THEMSELVES)
The British pressure group, Labour Behind the Label, whether this is really the sort of thing they should be doing
which campaigns to improve the working conditions of with their shareholders’ money.
garment workers around the world, expressed its Now I don’t here intend to demean the charitable spirit or
support for efforts being made by Gap to move towards the work of good people such as Bono or Bob Geldof, nor
more responsible sourcing of products. By deciding to the perfectly decent motivation of millions in the wealthy
manufacture the (PRODUCT) RED T-shirts in Lesotho,
Gap had helped to safeguard workers’ livelihoods there
at a time when other companies were increasingly
sourcing garments from China and India:
While GAP, like all clothing companies, is a long way from
resolving all workers’ rights issues in its supply chain, it
has come further than many. Whilst we would like to see
initiatives like RED being more comprehensive in their
attitude towards combining charity and political change,
so far indications suggest that the way the RED T-shirt has
been put together could be a positive step for the African
garment industry as well as for the fight against AIDS.4

Others were less supportive. A parodying website,

Photo: M. Spencer Green/AP/PA Photos

mirroring the Gap advertising, was set up by protesters

in San Francisco. It urged people to support causes
directly, rather than via shopping. Its message:
‘Shopping is not a solution. Buy (Less). Give More.
Join us in rejecting the ti(red) notion that shopping
is a reasonable response to human suffering.’
And in October 2006 there was a lengthy critique in
The Times:5
GAP, America’s still-trendy mass-market clothing retailer,
is winning plaudits over here for its new campaign . . . Bono and Oprah promoting Gap
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world who genuinely want to help to improve the wretched
lives of those less fortunate than themselves. Don’t get me
wrong; charity remains one of the finest of virtues and
should, in almost all instances, be encouraged.
Nor am I going to point out the nauseating
conspicuousness of the consumption represented by the
RED campaign (‘Look,’ it says, ‘I not only look good. I AM
good!’). Nor am I even going to dwell on the fact, though
I could, that for all the aid Africa has received over the
past 50 years, the continent remains poorer than ever, and
certainly poorer than parts of the world that have received
little in the way of charity in that time.
My problem here is with what this does for the very idea
of capitalism, for companies pursuing their real and entirely
wholesome responsibility of making money. Free market
capitalism, untrammelled by marketing people in alliance
with special interest groups on a mission to save the world,
has done more to alleviate poverty than any well-intentioned
anti-poverty campaign in the history of the globe.
By concentrating on selling quality, low-priced goods,
some of them made with labour that would otherwise lie
idle (and dying) in the developing world, Gap saves lives.
By helping to keep prices down and generating profits,
Gap ploughs money back into the pockets of people in
the US, the UK and elsewhere. Which creates the demand
for imports of products from the developing world. Which
keeps the poor of those countries from suffering even more
than they do now.
In a complex world, we all operate in a division of labour.
Companies make profits. It is what they are designed to do.
It is what they do best. When they depart from that mission,
they lead their employees and their shareholders down a
long, slow route to perdition.
You think that is over the top? What is most troubling
about campaigns such as Product Red is that they
represent an accommodation with groups who think the
business of capitalism is fundamentally evil. By appeasing
people who regard globalisation as a process of
exploitation, companies such as Gap are making the world
much worse for all of us. They are implicitly acknowledging
that their main business – selling things that people want for
a profit – is inherently immoral and needs to be expiated by
an occasional show of real goodness.
Rather than resisting it, they are nurturing and feeding an
anti-business sentiment that will impoverish us all. What’s
more, this encroachment by companies is fundamentally
undemocratic. Companies should not collude with interest
(PRODUCT) RED AND GAP 119
groups and non-governmental organisations to decide on
public priorities. That is for free people, through their elected
governments, to do.
None of this is to say companies – or the people who run
them – should not behave morally. They should observe not
only the law, but the highest ethical standards, which means
honesty, straight dealing and openness. It might even
at times be in their corporate interests (ie, longer-term
profitability) to contribute to political or charitable causes
– in those cases shareholders can and should vote on the
appropriation of funds for such purposes.
But shareholders – all of us – should be concerned
when managements decide, for whatever reason, to make
common cause with those who oppose the very principles
on which their business is conducted. That represents a
case of misguided corporate BULLS(HIT) TING the wrong
target.
Notes
1. Source: (PRODUCT) RED website http://joinred.blogspot.com/.
2. M. Frazier, ‘Costly Red Campaign reaps meager $18m’,
Advertising Age, vol. 78, no. 10 (5 March 2007).
3. P. Vallely, ‘The Big Question: Does the RED campaign help big
Western brands more than Africa’, Independent, p. 50, 9 March
(2007). Copyright The Independent, 9.3.07.
4. Source: http://www.labourbehindthelabel.org/content/view/
67/51/.
5. Gerard Baker, ‘Mind the Gap – with this attack on globalisation’,
The Times, 24 October (2006). © Gerard Baker/N.I. Syndication
Limited, 24.10.06.
Questions
1 What is the rationale of:
(a) The founders of (PRODUCT) RED?
(b) Dan Henkle and Gap?
(c) The author of the article in The Times?
2 What views might shareholders of Gap have of
its involvement in (PRODUCT) RED?
3 In your view is (PRODUCT) RED an appropriate
corporate activity?
4 If you were a shareholder of a company and
wished to persuade top management to join the
(PRODUCT) RED initiative, how might you do
this? (Use stakeholder analysis as a means of
considering this.)