TOMS: "We are in Business to Improve Lives"

Abstract

This paper analyses the use of the "buy one give one" model as part of the cause-related marketing activities that firms can develop. The specific case of the firm TOMS is studied as a paradigm for the application of this type of model. First, the model is described, and a reflection is made about the main advantages and disadvantages of its application. Second, the temporal evolution of the model is detailed. Since its creation (2006), TOMS has applied the "buy one give one" model. During that trajectory, a clear three-phase evolution is apparent: an initial stage and classic application of the "buy one give one" model (starting in 2006), a stage of slight evolution of the initial model (starting in 2014), and the current stage (starting in 2015) in which the model is further relaxed through the creation of a donation fund. Currently TOMS is managing to combine the classic "buy one give one" model with more sophisticated formulas, while always keeping profits above 30%.