Marketing for public and Marketing for public and non profitsnon profits

By Maxwell RanasingheBy Maxwell Ranasinghe

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Organisations, management and Organisations, management and marketingmarketing

What is an organisationWhat is an organisation Basically, an organization is a group of Basically, an organization is a group of

people intentionally organized to people intentionally organized to accomplish an overall, common goal or set accomplish an overall, common goal or set of goals.of goals.

Organizations can range in size from two Organizations can range in size from two people to tens of thousands.people to tens of thousands.

Organizations have major subsystems, Organizations have major subsystems, such as departments, programs, divisions, such as departments, programs, divisions, teams, etc..teams, etc..

These organisation in nature could be These organisation in nature could be Private, Public & Voluntary ( non – profit)Private, Public & Voluntary ( non – profit)

What is ManagementWhat is Management

“ “ A set of activities( including A set of activities( including planning and decision making, planning and decision making, leading and controlling) directed at leading and controlling) directed at organisation’s resources ( human, organisation’s resources ( human, financial, physical and information), financial, physical and information), with the aim of achieving with the aim of achieving organisational goals in an efficient organisational goals in an efficient and effective manner – ( R.W. Griffin and effective manner – ( R.W. Griffin -2005)-2005)

PUBLIC SECTORPUBLIC SECTOR

The The public sectorpublic sector is a part of the state that deals is a part of the state that deals with the delivery of goods and services by and for with the delivery of goods and services by and for the government whether national, regional or local the government whether national, regional or local or municipalor municipal

Examples of public sector activity range from Examples of public sector activity range from delivering social services such as administering the delivering social services such as administering the samurdhi and other welfare programs for poor and samurdhi and other welfare programs for poor and needy of the society, health, education, road needy of the society, health, education, road networks, urban and municipal planning, providing networks, urban and municipal planning, providing policies services and national defense, policies services and national defense, administering the court system, collecting taxes, administering the court system, collecting taxes, holding elections, running many regulatory bodies holding elections, running many regulatory bodies such as TRC, Consumer Authority. Central such as TRC, Consumer Authority. Central Environment Authority etc.Environment Authority etc.

Two major types public Two major types public organisationsorganisations Direct administration-Direct administration- Public Departments Public Departments

funded through taxation; the delivering funded through taxation; the delivering organization generally has no specific organization generally has no specific requirement to meet commercial success requirement to meet commercial success criteria, and production decisions are criteria, and production decisions are determined by government. determined by government.

Indirect AdministrationIndirect Administration - Publicly owned - Publicly owned corporations (in some contexts, especially corporations (in some contexts, especially manufacturing, "state-owned enterprises"); manufacturing, "state-owned enterprises"); which differ from direct administration in which differ from direct administration in that they have greater commercial that they have greater commercial freedoms and are expected to operate freedoms and are expected to operate according to commercial criteria, and according to commercial criteria, and production decisions are not generally production decisions are not generally taken by governmenttaken by government

Non Public sectorNon Public sector

Enterprises that are not part of Enterprises that are not part of public sector are called the public sector are called the voluntary sector. voluntary sector.

Voluntary sector comprises of Voluntary sector comprises of Private SectorPrivate Sector Non- profit sectorNon- profit sector

The The private sectorprivate sector is the part of is the part of the economy which is both run for the economy which is both run for private profit and is not owned by private profit and is not owned by the state. the state.

There are so many individual There are so many individual enterprises to corporate and enterprises to corporate and multinational enterprises in this multinational enterprises in this category who provide goods and category who provide goods and services to public with a view of services to public with a view of making profit. making profit.

The The non-profit sectornon-profit sector is the is the sphere of social activity sphere of social activity undertaken by organisations undertaken by organisations other than the public sector that other than the public sector that are for non profitare for non profit

This sector is also called the This sector is also called the third sectorthird sector, in reference to the , in reference to the public sector and the private public sector and the private sector sector

What constitutes the voluntary What constitutes the voluntary sector may be interpreted widely or sector may be interpreted widely or narrowly, and may include such narrowly, and may include such diverse groups as diverse groups as advocacy/interest groups. think advocacy/interest groups. think tanks, social movements, political tanks, social movements, political parties, charitable organizations, parties, charitable organizations, volunteer community volunteer community organisations, and religious organisations, and religious organizations. organizations.

Now talk Now talk

What is Marketing?What is Marketing?

Marketing is a societal and managerial Marketing is a societal and managerial process where people and organisations process where people and organisations

( customers) obtain what they need and ( customers) obtain what they need and want by exchanging value ( money) and want by exchanging value ( money) and products with each other.products with each other.

Marketing focuses on the needs and wants Marketing focuses on the needs and wants of customers. of customers.

It is concerned about satisfying customers It is concerned about satisfying customers through supply of goods and servicesthrough supply of goods and services

Many think marketing is only advertising Many think marketing is only advertising and selling. There are so many areas in and selling. There are so many areas in marketing and it is a wider subjectmarketing and it is a wider subject

If advertising and selling is marketing, If advertising and selling is marketing, anything could be manufactured and sold if anything could be manufactured and sold if advertising is doneadvertising is done

Egg. A company on its own manufactures Egg. A company on its own manufactures an ice cream with garlic flavor. The an ice cream with garlic flavor. The marketing Department is given unlimited marketing Department is given unlimited amount of money to advertise but they amount of money to advertise but they cannot make sales. Why ? The product is cannot make sales. Why ? The product is not wanted by the customers. So marketing not wanted by the customers. So marketing starts from customers needs and wants starts from customers needs and wants

Is Marketing a function of management Is Marketing a function of management

or a business philosophy ? Discussor a business philosophy ? Discuss

It is a function of management as well as a It is a function of management as well as a business philosophybusiness philosophy

It is considered as a It is considered as a function of function of managementmanagement as it uses management as it uses management techniques in satisfying customers. techniques in satisfying customers.

Businesses has various divisions that Businesses has various divisions that handles different functions such as human handles different functions such as human resource, financial, operations and resource, financial, operations and marketing. marketing.

Marketing functions in general is to identify, Marketing functions in general is to identify, create, retain and grow customers.create, retain and grow customers.

In a typical Marketing Department there are In a typical Marketing Department there are marketing managers, product managers, marketing managers, product managers, sales managers, sales representatives, sales managers, sales representatives, sales persons, delivery assistants etc.sales persons, delivery assistants etc.

As a function, marketing is involved in As a function, marketing is involved in several activitiesseveral activities

Identifying customer requirements through Identifying customer requirements through researchresearch

Study about customer perception and Study about customer perception and products, set prices, involved in distribution products, set prices, involved in distribution systems, promo activities, etc. systems, promo activities, etc.

Anticipate customer demand by forecastingAnticipate customer demand by forecasting Work with other functional departments to Work with other functional departments to

develop products and services to satisfy develop products and services to satisfy customer needscustomer needs

Simply analyzing, planning, implementation Simply analyzing, planning, implementation and control of all the marketing activities.and control of all the marketing activities.

Marketing as a business philosophyMarketing as a business philosophy

Marketing is considered as a overall Marketing is considered as a overall business philosophy which runs through all business philosophy which runs through all departments of an organisation and departments of an organisation and embedded in all the activities of a embedded in all the activities of a marketing organization. marketing organization.

The idea rooted in satisfying customers The idea rooted in satisfying customers through the supply of goods and services through the supply of goods and services does not restrict to one department or does not restrict to one department or function. function.

It is the purpose of the whole business. It is the purpose of the whole business. Everyone should have the customer Everyone should have the customer oriented attitude in an organisation.oriented attitude in an organisation.

Now talk Now talk

When you analyze the philosophy and When you analyze the philosophy and functions of marketing they are certainly functions of marketing they are certainly compatible with the ideals of Public Sector compatible with the ideals of Public Sector and Non- Profit Sector as they too are and Non- Profit Sector as they too are engaged in serving wants and needs of engaged in serving wants and needs of othersothers

Although the profit motive is absent, the Although the profit motive is absent, the way customers needs and wants are way customers needs and wants are identified, processed, delivered , identified, processed, delivered , communicated and followed up are similar.communicated and followed up are similar.

Therefore, Public Sector as well as the Therefore, Public Sector as well as the Non Profit sector should use the marketing Non Profit sector should use the marketing principles in pursuit of their objectives.principles in pursuit of their objectives.

They need to take 4 ps into consideration.They need to take 4 ps into consideration.

For example : Temple/Church provide theirFor example : Temple/Church provide their product product (service - spirituality, God, religious ideals, prayers, (service - spirituality, God, religious ideals, prayers, preaching, Bana ) preaching, Bana )

To its congregation To its congregation customerscustomers- devotees and - devotees and believers) believers)

It It announcers announcers its activities ( promotion – leaflets, its activities ( promotion – leaflets, posters, banners, newspaper, TV) posters, banners, newspaper, TV)

To its congregation (target market –Parish or the To its congregation (target market –Parish or the region). region).

It depends on It depends on price price congregation pay ( money to the congregation pay ( money to the till or offerings) for its survival. till or offerings) for its survival.

Further it is Further it is locatedlocated where their congregation can have where their congregation can have easy accesseasy access

( place). ( place). Therefore Therefore customer would be the most importantcustomer would be the most important

element of any religious organization. element of any religious organization. So temple/ Church needs to strive to satisfy its So temple/ Church needs to strive to satisfy its

customers as “ customers as “ No customers means No businessNo customers means No business””

Marketing is one of  the most misunderstood Marketing is one of  the most misunderstood functions in the public sector, often confused with functions in the public sector, often confused with “promotion” and “marketing communications”. “promotion” and “marketing communications”.

Major primary research studies on Major primary research studies on The State of Marketing in the Public and Non-Profit The State of Marketing in the Public and Non-Profit SectorsSectors have reinforced the belief that Public and Non profit have reinforced the belief that Public and Non profit sector do not practice marketing it should be sector do not practice marketing it should be practicing practicing

The lack of marketing expertise is very evident The lack of marketing expertise is very evident within the government environment. People are within the government environment. People are being put into senior “marketing” positions having being put into senior “marketing” positions having never taken a single marketing course in their lives, never taken a single marketing course in their lives, let alone attained a business degree. let alone attained a business degree.

Marketing is perceived as an “art” with no attention Marketing is perceived as an “art” with no attention being paid to the “science” side. Big mistake. being paid to the “science” side. Big mistake.

Public sector marketingPublic sector marketing

Customers are tax payers ( general public)Customers are tax payers ( general public)Customers may pay direct or indirect taxes to the Customers may pay direct or indirect taxes to the public sectorpublic sector

Public sector therefore has more responsibility towards Public sector therefore has more responsibility towards the general public in carrying out services to their the general public in carrying out services to their satisfactionsatisfactionPublic sector also should identify what general Public sector also should identify what general public really wantpublic really want

They should not start services or products where They should not start services or products where general public do not demand or requestgeneral public do not demand or request

should adopt customer centered approach in all the should adopt customer centered approach in all the aspectsaspects

Customer care and courtesy have to be improvedCustomer care and courtesy have to be improvedThey should change the attitude of government They should change the attitude of government servants to be more customer friendly and less servants to be more customer friendly and less bureaucraticbureaucratic

Lets discuss ? whatLets discuss ? what

A good example of public A good example of public sector marketing in Sri Lankasector marketing in Sri Lanka How public sector marketed the war in Sri How public sector marketed the war in Sri

Lanka could be an ideal example of how Lanka could be an ideal example of how the Public Sector adopts marketingthe Public Sector adopts marketing

They found the needs and wants of their They found the needs and wants of their customers ( general public)customers ( general public)

The need was “ people want a peaceful The need was “ people want a peaceful environment to live”environment to live”

They showed that it is been breached by They showed that it is been breached by the terrorismthe terrorism

Eliminating terrorism was the demandEliminating terrorism was the demand The Govt heeding to the general public( its The Govt heeding to the general public( its

customer) had two products E.g. peace or customer) had two products E.g. peace or war war

Product peace was not accepted by Product peace was not accepted by the customerthe customer

Product war was promoted and Product war was promoted and customer was compelled to accept it. customer was compelled to accept it. (lot of marketing was done)(lot of marketing was done)

How did the war mentality created How did the war mentality created ( a lot of marketing was done)( a lot of marketing was done)

How did the war was fundedHow did the war was funded How did the war was continuedHow did the war was continued How did the war was reportedHow did the war was reported

Govt can do the same thing for many Govt can do the same thing for many problems in the society if they use problems in the society if they use the marketing principalsthe marketing principals

They need to understand the needs They need to understand the needs and wants and then offer solutions and wants and then offer solutions that could be bearable for the public that could be bearable for the public to fund ( loans, taxes) them and to fund ( loans, taxes) them and provide services or products that provide services or products that would satisfy customers ( general would satisfy customers ( general public) public)

Feel like bored ?Feel like bored ?

Discuss what should the public Discuss what should the public sector do in adopting marketing to sector do in adopting marketing to

Developing RoadsDeveloping Roads Community servicesCommunity services TransportTransport Public services – Police, Local Public services – Police, Local

Govt Govt HealthHealth Electricity and water supplyElectricity and water supply

Non profit marketingNon profit marketing Non profit is a term that causes lot of Non profit is a term that causes lot of

confusion.confusion. It represents a tax exempt status and It represents a tax exempt status and

indicates that any excess resources or indicates that any excess resources or profits will not be distributed to the staff, profits will not be distributed to the staff, board of directors or others in a manner board of directors or others in a manner dividend are distributed in a for profit dividend are distributed in a for profit organisationorganisation

Such excesses if any should remain in the Such excesses if any should remain in the organisation to conduct future services organisation to conduct future services that it would renderthat it would render

However, it does not mean that they earn profit by However, it does not mean that they earn profit by way of their services. Even if there is a profit it is not way of their services. Even if there is a profit it is not called a profit. It may be named “ excesses”called a profit. It may be named “ excesses”

Some advocate that non profits should at least Some advocate that non profits should at least break even to further their causes. However, there break even to further their causes. However, there are many instances that one cannot do that. E.g. are many instances that one cannot do that. E.g. providing food for IDPs, can you sell it even at cost?providing food for IDPs, can you sell it even at cost?

Differences/ Similarities between Differences/ Similarities between For Profit and Not for profit For Profit and Not for profit organisationsorganisations For profit organisations major goal is to maximise For profit organisations major goal is to maximise

profitsprofits Not for profit major goal is to fulfill a well defined Not for profit major goal is to fulfill a well defined

missionmission Not for profit organisations must be aware and Not for profit organisations must be aware and

serve the wants and needs of a multiplicity of stake serve the wants and needs of a multiplicity of stake holders who may have conflicting expectationsholders who may have conflicting expectations

Creating demand is always important in for profits.Creating demand is always important in for profits.( Non profits also may want to create more ( Non profits also may want to create more participation for an event, celebration or for a participation for an event, celebration or for a donation)donation)

Prevention and abstaining ( reducing demand) may Prevention and abstaining ( reducing demand) may be part of the main activity in non profit. ( No be part of the main activity in non profit. ( No smoking, reduce drug abuse, prevent accidents)smoking, reduce drug abuse, prevent accidents)

Creating a positive image among stake holders Creating a positive image among stake holders ( important for both)( important for both)

Fundamental misunderstanding of marketing Fundamental misunderstanding of marketing by non profitsby non profits

We are doing a service almost at cost or We are doing a service almost at cost or less so we need not do marketingless so we need not do marketing

We do not have budgets to do marketingWe do not have budgets to do marketing If you do a good service or have a good If you do a good service or have a good

product it will sell itselfproduct it will sell itself Our staff is very busyOur staff is very busy We have been doing fine in the past and We have been doing fine in the past and

why should we bother now with marketingwhy should we bother now with marketing

It cant be that It cant be that

These myths These myths are mainly based on theare mainly based on the thinking that marketing is advertising and thinking that marketing is advertising and sellingselling

They have They have failed to understandfailed to understand that that marketingmarketing is an approach to understanding is an approach to understanding and serving the needs and wants of and serving the needs and wants of individuals and organisationsindividuals and organisations

Non profits have many Non profits have many stake holdersstake holders such such as donors, governments, authorities etc as donors, governments, authorities etc and they have to understand their and they have to understand their expectationsexpectations as well if they are to survive. as well if they are to survive. Therefore non profits needs more Therefore non profits needs more marketing than the profitsmarketing than the profits

What is marketed by non What is marketed by non profitsprofits

ServicesServices ExperiencesExperiences ProductsProducts ConceptsConcepts MembershipsMemberships

ServicesServices Medical servicesMedical services Legal assistanceLegal assistance Job placementJob placement Human rightsHuman rights CounselingCounseling Disease controlDisease control Family planningFamily planning

ExperiencesExperiences Visits to many places e.g.. Visits to many places e.g..

Children's parksChildren's parks Music and dramatic Music and dramatic

performancesperformances Educational excursionsEducational excursions

ProductsProducts Family planning productsFamily planning products BooksBooks Posters, leafletsPosters, leaflets Key tags, caps, T shirtsKey tags, caps, T shirts Food itemsFood items Products manufactured by Products manufactured by

disableddisabled

ConceptsConcepts ( mainly social marketing) ( mainly social marketing) Say no to drugsSay no to drugs Don’t drink and driveDon’t drink and drive Do not phone and driveDo not phone and drive Protect environmentProtect environment Outlaw abortionOutlaw abortion Stop smokingStop smoking Prevent diseasesPrevent diseases Protect MotherlandProtect Motherland Eliminate underworldEliminate underworld Say No to briberySay No to bribery Eliminate corruptionEliminate corruption

OrganisationsOrganisations Join political partiesJoin political parties Join professional organisationsJoin professional organisations Join social organisationsJoin social organisations Join religious organisationsJoin religious organisations

Four Ps in non profit marketingFour Ps in non profit marketing Price – Certain services are offered Price – Certain services are offered

free but others are offered at cost or free but others are offered at cost or with a lower margin that the private with a lower margin that the private sector.sector.

It should find out the price that their It should find out the price that their clientele would be willing to pay. clientele would be willing to pay.

There would be many people coming There would be many people coming for services such as medical, for services such as medical, counseling etc at lower costcounseling etc at lower cost

ProductsProducts It is discussed under what is marketedIt is discussed under what is marketed The important aspect here is to find out The important aspect here is to find out

what really wanted by the customerswhat really wanted by the customers A good mix of products and services to suit A good mix of products and services to suit

the customers should be made available.the customers should be made available. If not, a non profit will have close down due If not, a non profit will have close down due

to non demand for the their productsto non demand for the their products

PlacePlace

It should offer their products at a It should offer their products at a place where its customers can place where its customers can conveniently comeconveniently come

It needs to keep the place, safe, It needs to keep the place, safe, clean and attractive for their clean and attractive for their customers to comecustomers to come

PromotionPromotion You may have a fantastic productYou may have a fantastic product An affordable priceAn affordable price Good distribution networkGood distribution network

……… ……… But still if your consumer does not But still if your consumer does not know about all that your product will not be know about all that your product will not be sold…..sold…..So what….So what….

You need to let your consumer know about the presence You need to let your consumer know about the presence of your offer ( product) . That is the essence of marketing of your offer ( product) . That is the essence of marketing communicationcommunication..

Most people think this is “The marketing” No it is Most people think this is “The marketing” No it is only a part of marketingonly a part of marketing

Developing a marketing orientation in non Developing a marketing orientation in non profitsprofits

Marketing should be viewed as a total Marketing should be viewed as a total integrated approach rather than an isolated integrated approach rather than an isolated activity or functionactivity or function

Design all products with the customer in Design all products with the customer in forefrontforefront

Placing attention to user friendliness of Placing attention to user friendliness of everything they doeverything they do

Placing customer satisfaction as number Placing customer satisfaction as number one objectiveone objective

Keeping track of changing needs of Keeping track of changing needs of communities, nationscommunities, nations

Compiling and using information available Compiling and using information available for planning and implementation of for planning and implementation of programsprograms

Running pro active evaluating and Running pro active evaluating and control processcontrol process

Keep donors and other stake holders Keep donors and other stake holders well informed about the activities and well informed about the activities and progressprogress

Consult donors and stake holders for Consult donors and stake holders for important mattersimportant matters

Reduce bureaucracy and inefficiencyReduce bureaucracy and inefficiency Improve transparencyImprove transparency Divulge the objectives and have no Divulge the objectives and have no

hidden agendashidden agendas

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Adopt marketing to make all happy and contended.

• Take this presentation, learn from it, develop it with your own insights, master it, teach others. Knowledge is

universal. It is there to share among all.

Call Maxwell, if you need further help: 071 4 723 308 or email : maxran1@yahoo.com