Mont Blanc pens and philanthropy

Mont Blanc are donating Rs 1000 received from the sale of every Meisterstuck pen in India, to the Red Cross Initiative to reduce illiteracy here. It claims that Rs 1000 will educate one child per year. In an excellent example of reconciling commerical and charitable interests, it exhorts its customers to buy a Meisterstuck pen and "educating as many as possible". The hand crafted Meisterstuck 149, besides being "one of the best known and most famous writing instruments of our time", is also one of the most expensive pens.

The potential inherent in this sales pitch by Mont Blanc may have more universal learnings. Here is a premium brand with a dedicated, niche market following, especially among the very rich. Many of them, for whatever reasons, are likely to approve of being closely associated with some charitable cause and also be known as supporting that casue. The Meisterstuck sales pitch is a superb exapmle of double signalling. First, the company signals to the potential buyers about the charitable dimension, second, the presence of the Meisterstuck pen signals to everyone that its owner is a contributor to a worthy social cause!

Some would argue that the donation component, by raising the price, would put away many customers. But given the donation being a small proprotion of the cost of the pen, and the rich customers less likely to be affected by the small differentials, this apprehension may be misplaced. Further, the marginal utility gained by the customers from contributing to a worthy cause is most likely to be much greater than the increased price. In fact, if anything, tagging a worthy cause is likely to broaden the potential market and thereby attract a few more customers!

I am not concerned with how many pens Mont Blanc will sell and how much money will be raised for the literacy initiative. The more important point for consideration is whether this sales model can be replicated for other luxury brands and philanthropic donations raised. Such sales bundling provides an excellent platform for utilizing the power of the market to raise philanthropic donations. (This concept is not new and has been used by many voluntary organizations like CRY to raise donations through sales of branded greeting cards) Theoretically atleast, it throws up the possibility of raising substantial sums by selling branded premium jewellery, automobiles, and other luxury goods. Here is an ideal opportunity for Tiffanys, Swarovski, Mercedez, Rolex, Luis Vuitton, Armani etc to meet their Corporate Social Responsibility (CSR) obligations and for their rich customers to generously donate to noble causes!