Management Accounting
1. a) What is the rationale of founders of (product) Red?
Their main reason for creating Product Red was to raise awareness and money for the Global Fund by teaming up with the world’s most iconic brands to products that would be sold. A percentage of each product sold would be donated to the Global Fund to help women and children affected by pandemics such HIV/AIDS and malaria. A basket of consumer goods were launched to this effect which included Product Red- American express card, vintage t-shirts, Motorola handsets, converse wear, apple iPod, Emperio Armani and also an edition of the Independent.
The Red manifesto, clearly outlined the core reason as, “we believe that when consumers are offered this choice and the products meet their needs they will choose red…when they choose red over non-red, then more brands will choose to become red because it will make good sense to do so, and more lives will be saved.” It went on to state that “Red is not a charity. It is simply a business model…buy red stuff; we get the money, buy the pills and distribute them. (Infected individuals) take the pills, stay alive and continue to take care of their families and contribute socially and economically in their communities.
In the words of Bill Gates, “Red is about saving lives…if there’s not enough money to buy drugs, people die and so we can take all the avenues available to us.” In this case, the avenue being selling Red products to raise money for the aforementioned fund. The proponents of Product Red believed that consumers wanted to associate themselves with saving lives hence these products would sell successfully in the quest to raising the required funds.
Product Red was seen as an entirely new model for fundraising, one of its kind when compared to one-off payments emanating from corporate humanitarian budgets. It looked set to create a major source of cash for the Global Fund (continuous cash inflows). Prior research has shown that Bono and Bobby know that
Their main reason for creating Product Red was to raise awareness and money for the Global Fund by teaming up with the world’s most iconic brands to products that would be sold. A percentage of each product sold would be donated to the Global Fund to help women and children affected by pandemics such HIV/AIDS and malaria. A basket of consumer goods were launched to this effect which included Product Red- American express card, vintage t-shirts, Motorola handsets, converse wear, apple iPod, Emperio Armani and also an edition of the Independent.
The Red manifesto, clearly outlined the core reason as, “we believe that when consumers are offered this choice and the products meet their needs they will choose red…when they choose red over non-red, then more brands will choose to become red because it will make good sense to do so, and more lives will be saved.” It went on to state that “Red is not a charity. It is simply a business model…buy red stuff; we get the money, buy the pills and distribute them. (Infected individuals) take the pills, stay alive and continue to take care of their families and contribute socially and economically in their communities.
In the words of Bill Gates, “Red is about saving lives…if there’s not enough money to buy drugs, people die and so we can take all the avenues available to us.” In this case, the avenue being selling Red products to raise money for the aforementioned fund. The proponents of Product Red believed that consumers wanted to associate themselves with saving lives hence these products would sell successfully in the quest to raising the required funds.
Product Red was seen as an entirely new model for fundraising, one of its kind when compared to one-off payments emanating from corporate humanitarian budgets. It looked set to create a major source of cash for the Global Fund (continuous cash inflows). Prior research has shown that Bono and Bobby know that
Bibliography: * Fundamentals of Cost and Management Accounting. Niemand, AA et al. 5th Edition. LexisNexis Butterworth, Durban 2004. * Advanced Cost Accounting. Directorate of Distance Education. Maharshi Dayanand University. 2004. * Managerial Finance. 2nd Edition. 2002. * ACCA Study Texts and Handouts. Kaplan Business Analysis. 2008 – 2010. * The Internet.