Developing Marketing Strategies for Not-For-Profit Services
Dr. Brian Monger
The process of developing strategies in the not for profit sector are the same as those for services in the profit sector, identifying opportunities, defining target segments, positioning the service, developing a marketing mix, and evaluating and controlling service delivery.
Identifying opportunities for not-for-profit services
Research of not for profit service organisations customers’ (described alternatively as donors, subscribers, or contributors) and non-customers will often reveal potential new services for attracting additional revenue. For example, not many people were aware of the Sudden Infant Death Syndrome (SIDS) until Red Nose day was launched
Define target markets for not-for-profit services
Not for profit organisations must identify target segments for their efforts, from the standpoint of identifying both clients and donors. Thus, schools and universities identify donor targets from their alumni list based on income, age, and past history of donations.
Various segments exist in the not-for-profit organisation’s target segment. They all exchange a “payment” to receive the organisation’s value offering. One typical Target segment is contributors – those individuals and organisations who supply funds to the organisation. The contributor’s objective is to help the NFP organisation complete its mission rather than to consume the primary service offering. In general, they exchange donations for some sort of psychological return (like feeling good)
Positioning not-for-profit services
The importance of positioning services in the not for profit sector can he seen in recruitment advertising for the armed forces.
Marketing mix for not-for-profit services
Like other service firms, marketers of not-for-profit services must develop a mix of brand, advertising, distribution, and pricing strategies to attract funds and deliver services to clients.
The Red Nose campaign conducted by SIDS has, effectively, given this appeal a brand identity, symbolised by the red noses worn by people and attached to motor cars. This branding has created high community awareness of SIDS and a focus for the fund-raising activity.
Advertising is used by not for profit organisations to influence both donors and clients. Given decreasing government funding, a number of not for profit organisations public service advertising (see Chapter 17 )and direct-mail for attracting sponsorship, contributions, and donor funds.
Not for profit agencies use personal selling to attract funds from larger donors. Personal selling is most effective where there is a concentration of donors, such as corporate sponsors. Many NFP’s employ business managers, whose main role is to attract funds. These business managers frequently call on key organisation executives to negotiate sponsorships and other types of donations.
Unlike for profit firms, distribution strategies for not-for-profit services are usually directed to both donors and clients. Increasing the number of locations where donations can he made can stimulate contributions.
Most not for profit firms do not expect to do more than recoup costs, if that. For example, most of the social agencies provide free or low-cost services which are subsidised by grants and their fund-raising activity. Not for profit organisations must also take account of the other investments incurred by their users. This can include waiting time, inconvenience, discomfort, and the psychological costs involved. Minimising such costs helps to attract more customers.
Production or Sales Orientation
The nature of NFP organisations often results in a strong production orientation because social marketers tend to have strong beliefs in the righteousness of the cause. Not-for-profit organisations stand to gain by being consumer oriented instead of production or sales oriented.