Marketing for Nonprofit Organizations A presentation by Susan E. Hanford Presentation Objectives Present the purpose and elements of marketing, not a “how to do marketing” (later presentations) Define a “Marketing Orientation” for a nonprofit organization Compare marketing for a nonprofit with marketing for a for profit organization Discuss constituency, relational, and integrated marketing Offer a opportunity for questions and insights Get feedback for further presentations. QUESTION – What is marketing for a nonprofit, or for profit organization?

Three Alternative Views From a study of 300 college administrators whose enrollments were declining 60 % - Sales, advertising, and public relations 28 % - Sales, advertising, or public relations <10% - Needs assessment, marketing research, product development, promotion and advertising, public relations, pricing, and distribution Three Alternative Views:   A recent survey of 300 college administrators whose enrollments were declining revealed that 60% viewed marketing as a combination of sales, advertising, and public relations. The same survey revealed that 28% viewed marketing as only one of sales, advertising, or public relations. A very small portion viewed marketing as having something to do with needs assessment, marketing research, product development, pricing, and distribution. Most people view marketing as synonymous with sales and promotions. However, sales and promotions are only a small part of marketing. If appropriate products and services are offered, and pricing, distribution, and promotion is done effectively, selling goods and services is easy. QUESTION – How many of you are associated with organizations who view marketing as having only the sales, advertising, and public relations functions?

Definition of Marketing Using the Du Page Symphony Orchestra audience as an example Identifying the needs and wants of target markets (constituency groups) Developing products and services for target markets Developing pricing (transactions) for purchasing products and services Developing communications about the products and services Establishing marketing channels for products and services QUESTION – What is the most effective definition of marketing? Using the Du Page Symphony Orchestra audience as an example Identifying the needs and wants of target markets (constituency groups) Developing products and services for target markets Developing pricing (transactions) for purchasing products and services Developing communications about the products and services Establishing marketing channels for products and services

Three Alternative Orientations A Product Orientation holds that the major task of the organization is to provide a product, which it thinks, would be good for the public.  A Sales Orientation holds that the main task of the organization is to stimulate interest in the public toward the organization's existing products and services.   A Marketing Orientation holds that the main task of the organization is to determine the needs, wants, and interests of target markets and to satisfy them through the design, communication, pricing, and delivery of appropriate and viable products and services.

Nonprofit vs. For Profit Differences Provides products/services for a profit Directed by corporate managers Board of Directors has passive role Fewer constituency groups When working with nonprofit boards, I differentiate between marketing management for nonprofit and for-profit organizations.  In many ways, a good nonprofit should act like a business, but there is an important difference.  In managing for-profit organizations, the corporate management team has control over both the long-term and short-term strategies of the organization which are geared primarily to creating, promoting, and distributing products and services to target market(s).  As long as the management team meets the overall mission, is profitable, and abides by legal and ethical business practices, the Board of Directors and shareholders have a more passive role. 

Nonprofit vs. For Profit Marketing Provides products/services for a profit Board of Directors has active role Fewer managers and employees Ideal application of Constituency Marketing

Constituency Marketing Definition: Developing a marketing plan for each of the major constituency groups of the nonprofit organization. QUESTION – What is Constituency Marketing? In the case of a nonprofit organization, the Board of Directors and outside constituencies, including government agencies, local governments, chambers of commerce, foundations, advertisers, conductor(s), staff members, players, volunteers, facilities managers, other nonprofit entities and the community-at-large have a more direct effect on the management of the organization.  Therefore, it is wise to develop a strategic integrated marketing plan for each of the organization's primary constituency groups, which I term Constituency Marketing.

Nonprofit Constituency Groups Using the Quad City Wind Ensemble as an example Audience, subscribers Public and private foundations Corporate and individual donors Advertisers Managers and employees Volunteers Media Government Other supporting organizations QUESTION: What are common nonprofit constituency groups? Example: The Quad City Wind Ensemble Audience, subscribers Public and private foundations Corporate and individual donors Advertisers Managers and employees Volunteers Media Government Other supporting organizations

Relationship Marketing Emphasizes the long term value of customer relationships rather than immediate sales Develops a two-way communication between the organization and its customers : understand and respond to customer needs increase customer satisfaction with products and services builds customer loyalty and retention. Enhanced with the increased use of the Internet technology internet search strategies to find potential customers use online social/business media for communication develop websites and online media for public relations develop online tools to manage sales, marketing, and customer service activities.  Coordinates all activities which directly interact with current and potential customers QUESTION – What is Relationship Marketing ? Relationship marketing is a form of marketing that emphasizes the long term value of customer relationships rather than immediate sales.  This form of marketing develops a two-way communication between the organization and its customers in order to have a better understanding and response to customer needs and wants, increase customer satisfaction with products and services, and encourage development of customer loyalty and retention. Relationship marketing has been greatly enhanced with the increased use of the internet and other technologies.  Organizations can devise internet search strategies to find potential customers, use online social/business media for communication, develop websites and online media for public relations, and develop online tools to manage all customer relationships, including sales, marketing, and customer service activities.  When relationship marketing is fully-implemented, all company-wide business activities which directly interact with current and potential customers are coordinated so that people, processes, and technology work together to increase both the efficiency and effectiveness of the organization.

Integrated Marketing Integrates advertising, sales promotion, public relations, and direct marketing activities Establishes brand identity Ensures a consistent marketing message Provides most effective and efficient marketing impact QUESTION – What is Integrated Marketing ? Integrated Marketing is a management concept designed to accomplish the following: make all aspects of marketing communication such as advertising, sales promotion, public relations, and direct marketing work together in unison, rather than in isolation from one another establish a brand identity such that all communications present the same brand image ensures that the marketing message is consistently sent through all media and stages of a promotional campaign provides the most highly-effective and efficient impact on the largest possible number of people within the target market(s).