News

The Power of a Penny: Students Win Pearson & (RED) Challenge

Eight-track cartridges, vinyl records, cassette tapes – these devices have practically vanished due to the convenience and accessibility of digital music. Apple Inc.’s iTunes Store, just one outlet where you can purchase and download music to electronic devices, sells over 15 million songs a day worldwide at a general rate of 99 cents apiece.

Imagine this: What if iTunes gave you the option to donate a penny to (RED) for AIDS research when purchasing a song? Consistent with the statistic above and if each purchaser chooses to contribute, that would roughly amount to about $150,000 a day and $1,050,000 a week. This is the concept Saint Peter’s College honor students Matthew Feeney ’15 and Christopher Cowell ’15 developed to win the ultimate prize in the Pearson & (RED) Challenge.

“We thought of the idea when I ordered dinner one night from Delivery.com, which has an option on the payment page to donate a dollar to a charity,” said Feeney. “We liked the idea, but wanted something that did more sales in a day. That led us to iTunes. With the large volume of sales done on iTunes, we felt we could make all of those pennies add up.”

Their marketing plan, titled (iRED) = iRoundEveryDollar, took the top spot among entries from college students across the country in a national competition sponsored by Pearson, a higher education business that develops content, learning tools and services; and (RED), an organization dedicated to change the number of babies born with the human immunodeficiency virus (HIV) to zero by 2015.

Pearson and (RED) invited students nationwide enrolled in a collegiate Principles of Marketing course to develop a marketing plan for the next (PRODUCT) RED, a fundraising brand licensed to partner companies such as Nike, Starbucks, Converse, Gap, Apple and more. To raise awareness and funds to help eliminate AIDS in Africa, these companies create products exclusively with the (RED) branding. The items are then sold at stores nationwide, with a percentage of the proceeds going to The Global Fund to fight AIDS, tuberculosis and malaria in needy countries.

According to Feeney’s and Cowell’s marketing plan, “The demand for digital music is growing, particularly for iTunes as they are seeing growth of over 1 billion songs per year on average (15 billion sold from 2003 to 2011). Since the iTunes pricing strategy [a marketing tool that is used as a way to stop customers from focusing on the price] generally uses 99 cent prices, the one penny donation is easy and is not a burden on consumers.”    

In order to make the donation, consumers would have the option to click on a checkable box that states “Donate a penny to (RED) with this purchase” during the check-out process when purchasing a song. For those unfamiliar with (RED), a “What is this?” hyperlink would outline the organization’s mission statement when hovered over with the cursor, allowing people to become familiar with (RED) and The Global Fund. An additional checkable box, stating “Always donate a penny,” would also be provided for customers who wish to continuously donate with each purchase.

As part of the Challenge, students also had to create a promotional video. Cowell and Feeney created a commercial that describes in a nutshell their intentions with the iTunes/(RED) collaboration.

To strengthen this marketing plan, Cowell and Feeney surveyed 93 college students to see if the concept would work. The results found that 60 of the 93 individuals purchased music on iTunes, 45 were not familiar with the charity, and yet 75 of all those surveyed would donate a penny at least once. It was Cowell’s and Feeney’s hopes to raise 100 million pennies for The Global Fund through the (RED) and iTunes collaboration. But with results like this from potential consumers, the total donations made for this charity could add up to much more for AIDS research.  

In order to move on to the final stage, where judges would choose the winning marketing plan, all submissions were placed on the Internet for public voting. As one of the top 10 entries that received the most votes, Cowell’s and Feeney’s project made the cut.

“We tried to have our friends, family and other students go online and vote for us because we felt that if we got enough votes to get us into the top 10, we could definitely win,” said Feeney. He was right. Officials from Pearson and (RED) selected Cowell’s and Feeney’s iTunes idea as the best. They will now head to New York for two nights to present their marketing plan to the (RED) team.

“It’s a great opportunity to showcase our abilities to business professionals, and as an aspiring marketer, it’s very exciting for me to be able to show real marketers what Chris and I were able to do,” said Feeney.

It is customary for companies that create (PRODUCT) RED items to manufacture tangible products for the fundraising effort, which have included such things as clothing, perfume, mobile phones, digital cameras, and even greeting cards. One such company is Apple, who participates in the (PRODUCT) RED campaign by developing exclusive red-colored iPod nanos and iPad Smart Covers. However, the iTunes collaboration idea is an original model created by Feeney and Cowell.

“One penny is so small that people don’t even notice it,” said Karl Alorbi, Ph.D., assistant professor of business. “To me, it is painless. All you need to do is market it to the people who buy the music.”

This is the third year Dr. Alorbi’s students have participated in the Challenge. Not only does this assignment fulfill the students’ Service Learning requirements to devote time to not-for-profit activities to foster the College’s mission to prepare students for a lifetime of learning, leadership and service to others in a diverse and global society, it’s also a requirement of Dr. Alorbi’s Principles of Marketing course that is even outlined in the syllabus. Students began working on the Challenge the very first day of class by dividing into groups to brainstorm potential marketing ideas, eventually narrowing it down to one solid plan. Utilizing a “teach and apply” method, Dr. Alorbi’s pupils even used their Principles of Marketing textbook to develop their concepts.

“It was tough writing the plan, and it took many all-nighters and days full of research and writing,” said Feeney.  “It seemed that every time we showed Dr. Alorbi our plan, he had more for us to work on. But in the end, it all paid off. Despite how much hard work went into our plan, I enjoyed every minute of it.”

In addition to Feeney’s and Cowell’s Challenge winning proposal, other pitches from Saint Peter’s students included (PRODUCT) RED pens and Lifesavers candy. One idea for a special pair of red shoelaces even made it through to the top 10 after Internet voting was completed.

“This win shows – very clearly – that with the right support, students from here can rise up to the occasion and compete against the very best in the world,” said Dr. Alorbi.

Since this was a class assignment, Feeney and Cowell received an extra bonus. “I promised the class that those who win the [ultimate prize] will get a final grade of A,” Dr. Alorbi chuckled. “I kept my promise.”