Purpose-Driven Marketing: When it Works and When it Backfires

I am pleased to share a recent Harvard Business Review article “Are Your Company’s Purpose Initiatives Working?” which I co-authored with my colleagues Chris Blocker and Jon Zhang. It was based on research we previously published in the Journal of the Academy of Marketing Science. The research examines how companies approach corporate purpose and whether their efforts lead to meaningful impact. As might be expected, the HBR version is more managerially focused and more accessible.

In this paper, we introduce a framework that categorizes organizations based on two dimensions:

• Impact substance (the tangible actions a company takes toward purpose-driven goals)
• Impact signal (how much a company communicates its purpose externally)

From this analysis, companies typically fall into one of four categories:

1. Profit-centric – Focused entirely on profitability, engaging minimally in social issues.
2. Profit-masking – Promotes purpose-driven messages but lacks substantial action (risking accusations of “purpose washing”).
3. Transitional purpose – Prioritizes meaningful action but communicates cautiously to avoid backlash.
4. Deep purpose – Fully integrates purpose into company identity, operations, and strategy.

The article also warns against the “muddy middle”, where companies struggle to balance signaling and substance, leading to inconsistency and skepticism from stakeholders. Organizations should assess their position honestly and make strategic adjustments to ensure their purpose-driven efforts are credible and sustainable.

The article may be particularly relevant given some of the activity going on recently. While it might have previously been difficult to definitively identify “profit-masking” (greenwashing) firms, they are now lining up and calling themselves out. Political pressure, legal risks, economic considerations and social backlash have contributed to this retrenchment. However, all these companies have now demonstrated that their previous claims of being purpose-driven were not authentic. It may harm them with employees and customers in the future. In fact, right now there is a 40 day boycott of Target Stores. They include some pretty big names including Pepsi, Uber, Google, McDonald’s and more.

This article and discussion may fit with Chapter 1, where Essentials of Marketing introduces the idea of purpose orientation, and Chapter 19 where we reflect on marketing’s roles and responsibilities.

Class Discussion Ideas

In-Class Activities:

1. Company Purpose Audit: Assign students a company (Nike, Patagonia, Amazon, etc.) and have them evaluate where it falls within the framework (profit-centric, profit-masking, transitional, or deep purpose).
2. Marketing vs. Reality Exercise: Have students analyze a company’s marketing claims and compare them to actual business practices.
3. Crisis Simulation: Give students a scenario where a company faces backlash for its purpose claims. Have them craft a response strategy to rebuild trust.

Discussion Questions:

1. How do companies benefit from purpose-driven initiatives? (Chapter 1)
   Answer Idea: They can improve brand loyalty, attract employees, and build long-term competitive advantages.
2. What risks do companies face if they emphasize purpose but fail to follow through? (Chapter 19)
   Answer Idea: Consumers may accuse them of “purpose washing,” leading to backlash, boycotts, and reputational damage.
3. Why might a company choose to under-communicate its purpose efforts? (Chapter 1)
   Answer Idea: To avoid skepticism, refine initiatives before publicizing them, or maintain focus on business execution rather than PR.
4. What are examples of companies in each quadrant of the framework? (Chapter 19)
   Answer Idea: Patagonia (deep purpose), Target (profit-masking with its fluctuating Pride campaign approach), Tesla (transitional purpose), Walmart (profit-centric but evolving).
5. What role does transparency play in making purpose-driven initiatives credible? (Chapter 19)
   Answer Idea: Transparency builds trust by showing real progress, sharing metrics, and being honest about challenges.
6. How can marketing leaders align purpose with profit without alienating stakeholders? (Chapter 19)
   Answer Idea: By integrating purpose into core business practices rather than treating it as a marketing campaign.