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The Value of Effective Marketing

 

The value of integrating marketing efficiently and effectively within a specific organisation

Academic

By Trevor Maynard © 2002

Fundraising & New Media

Introduction

Branding Or Not

Before discussing the value of marketing, it would be useful I believe, to first find a definition for what marketing actually is. Marketing could be defined simply as a management function “which identifies, anticipates and supplies customer requirements” (Chartered Institute of Marketing 1999).  It could also be defined as a social and managerial process “by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others” (Kotler 1991). Boone and Kurtz (1998) concentrate on this process aspect further, suggesting marketing is the “planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services, organizations, and events to create and maintain relationships that will satisfy individual and organizational objectives.” This could be taken to mean that marketing should be integral to an organisation and that all activities, external, internal and environmental, must necessarily be co-ordinated to benefit both customers and the company (Japan Marketing Association 1990).

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The Value of Effective Marketing by Trevor Maynard © 2002
It could said that these definitions illustrate the philosophy that marketing must start from the customer, and that, literally, an organisation’s reason to exist is to meet the needs of their customers.  Further, it could be said that no organisation can meet the needs of its customers if either it does not have the capability to produce the service, or its service is not one that is needed (Kolb 2000). I would suggest this goes to the heart of the organisation’s vision, its’ meaning, and a function of marketing is to convey that vision or meaning, or to be a “meaning broker” (Klein 2000).
The philosophy of why an organisation wishes to meet needs can be found using two intrinsically linked questions.  Who are we?  Who are our customers?  There are several marketing methods by which to answer these questions. An indication of who we are can be found by starting with the mission statement of the organisation (Keaveney 2001), and by using analytical tools such as PEEST (Political/Economic/Environmental/Socio-Cultural/Technological) and SWOT  (Strengths/Weaknesses/Opportunities/Threats) (Sargeant 1999).  Not only will this help identify the charity as a personality and a philosophical entity, but it will also help the organization to see if the way it sees itself, is the way it is perceived by its customers (Bruce 1998).  One way of doing this would be to gather information about former and current customers through market research, which in turn may suggest where potential customers may come from, which leads to question being asked, where can the research be found? Or may, in other words, where to segment the market (Bruce 1998).  The gathering and dissemination of this information throughout the organisation can then lead to that organisation being able to co-ordinate it’s future plans in order to strategically respond to current customers needs and future opportunities (Kohli and Jaworski 1990).

The information can then been filtered through the marketing mix.  The term marketing mix is attributed to Borden (1964), but in it’s most prescient form was encapsulated by McCarthy (1981) as the four ‘P’s – product, price, promotion and place.  However, it could be suggested that as service organisations do not deal in physical goods, then their product is intangible, and this intangibility makes it experiential rather than tactile.   Other characteristics such as inseparability (the customer and provider are in contact), variability (the quality of a service is paramount to its value) could lead on to the idea that a service is more of risk than a physical good, and therefore needs other criteria to describe it (Zeithaml, Parasuraman and Berry 1985).  These criteria could be described with a further three service orientated ‘P’s: people, physical evidence, and process (Booms & Bitner 1981).  These seven ‘P’s Sargeant (1999) calls the “tactical marketing mix”.   However, there is one further element that could be said to be crucial, particularly in the charity sector, to all the above, and that is philosophy.  This may be regarded as the bedrock of any organisation in that what the philosophy of an organisation is will be its raison d’tre (Bruce 1998).

It would seem clear that marketing can be defined for an organisation, whether it be commercial or non-profit, as meeting needs of its clients, and that there are processes which can integrate marketing into an organisation effectively (Bruce 1998).  For example, it could be said that in the charity sector in particular, the mission of an organisation is given cohesive definition through its identity or brand. (Ali1999)  From the perspective of the charity I work for, this was achieved by not only changing the name but also by modernising the mission.  The Victorian sounding Big Benevolent Committee *(pseudonym)  that was given a grant for a home for the “mentally subnormal” (sic London Borough of Islington caveat in the Deed of Sale), became The Big Society *(pseudonym) whose tag line is “Practical Pioneering with People With Learning Difficulties”; and then there was a new logo – which, though not tattooed on employees ankles and wrists like those of the Nike employees (Klein 2000) has still become a badge of ownership and identity for employees and service users alike.

The Big Society then, is an organisation, like many other charities, that has embraced some marketing, though in a somewhat adhoc and accidental way.  Part of this process has been the PEEST and SWOT analysis carried out by the organisation. Chiefly this identified the political and socio-cultural perceptions of outside and inside the organisation and revealed a need for an identity, while also questioning how internal capabilities of the organization were affected by the external environment (Sargeant 1999).   It could be said that such analysis could help a charity become a learning organisation (Bruce 1998) and also put a focus on a quality service approach.  The SERVQUAL Method or “gap” analysis developed by Parasuranam et al (1988) could be considered a useful tool in this approach; service quality is looked at in terms of identifying; what there is to learn - do we know what the service user expects?  Is the model of care correct? Does the end result match the results promised at the beginning of the process?

The Big Society could be said to be finding its market orientation through analysis.  Another way of saying this could be to say that by looking at who we, and what we do, we will find who we serve (Keaveney 2001).  This leads to what Sargeant (1999) calls “achieving a customer focus”.  The benefit of such market-orientated thinking manifests itself, for instance at The Big Society, in facilitating the setting up of service user advisory groups (with Trustees, staff, local and national authorities) which in effect tell all the stakeholders what kind of service the users want, and hence, how their needs can be met.

In effect, The Big Society has been doing qualitative market research without realising it; what Godin (1999) may have called “accidental marketing”. A better marketing strategy, I would argue, would be for The Big Society to decide upon what it actually wants to know, where and how it can obtain the information and how it plans to use its findings (Kolb 2000).  Essentially this kind of research is either qualitative (in depth interviews with a client group that you already know have a stake in the process) or quantitative (asking a large sample the same question to gain a general picture).   The first could be considered useful for assessing whether a service would be achievable, whereas the second could be said to find out whether customers would be interested in having such a service (Bruce 1998). 
Many companies now consider database and Internet research as crucial to their marketing strategy and targeting potential customers. Janette Southall, relationship manager of NCH Action For Children, goes so far as to say  I can only be effective if I have effective technological systems”  (Marketing Magazine June 1999). The value of Information Technology as this kind of resource could certainly be one area of marketing The Big Society could benefit from. It could be another marketing tool to help an organisation to think through whose needs they serve, how they serve them and to whose need they wish to serve in the future (Kotler 1997). Once the organisation is aware of whom its most likely clients are then it can concentrate its resources on that segment of the market.  Segmentation is a way of distinguishing one customer from another according to the needs that the organisation is most likely to meet – or in commercial terms, their “buying preferences (Hooley et al 1997).
The Big Society has segmented its market to a degree; our service users are defined as adults with mild or moderate learning difficulties.   Where The Big Society has been less successful is in segmenting its donor base, or indeed in promoting itself in terms of fund-raising and sponsorship. Segmentation in the commercial world has been highly successful in this regard, and it can be argued, in the nineties, was based on a single market segment – the “cool” youth.  Whereas parents looked to the bargain basements to clothes their children, the kids looked to designer brands and downloads off the Internet (Klein 2000).  I would suggest that charities are not unaffected by this – look at the popularity of youth-focussed events from Band Aid to Comic Relief. The latest example, of this pervasive segmentation is a rock concert at Buckingham Palace to celebrate the Queen’s Golden Jubilee, clearly I would argue, brought about because of the lack of interest in more traditional, less “cool” events previously planned.
Ideas could be said to be the product in the marketing mix of the not-for profit sector, in that a services could be considered to be “idea products” (Bruce 1998). Others have also tried to de-commercialise marketing terminology (as product is not the most popular name for service users) with phrases such as “value packages” “offerings” and “benefit bundles” (Kotler and Fox 1985), and although this may be seen as an example of the charity sector’s enduring general antipathy to marketing (Ali 1997), it could also be argued that viewing ideas as products actually helps charities to succeed in their charitable purposes, because, in a real sense, it identifies, even brands, that purpose.  The Big Society talks in terms of “care packages” meaning that our idea is care, and that we provide an individual solution, or “package” of care for each service user.
The second element of the marketing mix, price, can reflect quality (Sargeant 1999). A high-cost service may be justified over a low-cost one because it provides a better quality of service to its users.  It can also be a reflection of more qualified staff and a commitment to improving the ways in which it meets the needs of its customers (Bruce 1998). The Big Society has always anecdotally brought this into it’s pricing structures for services, though I feel it would certainly be more beneficial if we could integrate the idea of price based on quality into the organisational strategy.  However, in the field of fund-raising, price is also a very real factor in the commercial sense.  The current trend for charity branded station-stoppers sporting charity logo waistcoats over their jackets and carrying direct debit forms attached to their clipboards is blatantly putting a price on a charity’s work.  Usually this is £2 per month.  However, charities such as Medicine Sans Frontier, in their Christmas television advertising campaign asked for £10 per month on the grounds that they can achieve a higher quality of service. 
Of the Four ‘P’s promotion is perhaps the one perceived as the most commercial, and particularly associated with advertising.  However, if a charity does not say who it is, then no one will ever know of its existence, so it is in fact essential that it be fully integrated into the marketing mix of an organisation (Bruce 1998).  In this area, The Big Society has formed a partnership with the magazine Community Living that is beginning to filter into all areas of Big’s work and would gain greater value from a more planned approach.
One of the most contentious ideas raised within the Society is the subject of accessibility and in particular having an accessible building in which to conduct the charity’s services.  It could be argued that in developing a marketing plan, with place as a central factor, The Big Society could better meet the needs of its service users.  This is closely linked with the ‘P’ for physical evidence in that how the buildings are presented, furnished and how services can be facilitated is in fact inextricably linked to how the service users, and in fact all stakeholders perceive the organisation (Bruce 1998). The Big Society uses its buildings for drop-in, self-advocacy groups and education, but they are converted houses, which does limit users physical access to staff.
One of the most contentious ideas raised within the Society is the subject of accessibility and in particular having an accessible building in which to conduct the charity’s services.  It could be argued that in developing a marketing plan, with place as a central factor, The Big Society could better meet the needs of its service users.  This is closely linked with the ‘P’ for physical evidence in that how the buildings are presented, furnished and how services can be facilitated is in fact inextricably linked to how the service users, and in fact all stakeholders perceive the organisation (Bruce 1998). The Big Society uses its buildings for drop-in, self-advocacy groups and education, but they are converted houses, which does limit users physical access to staff.
For services, one of the most important factors is that of people, as this is a major factor in differentiating one charity from another as well showing quality of service, e.g. product.  It also goes to the heart of the organisational character for it could be said who the people are, is who the charity is (Sargeant 1999).  How the employees of an organisation present themselves to service users and others, for example how they adhere to policies such as equal opportunities can be a valuable resource in achieving the charity’s aims (Bruce 1998). 
For The Big Society and many service organisation the process criteria of the marketing mix is wrapped up with the service that is provided – because how the service is provided could be said to be the service itself (Bruce 1998).  Services such as education and facilitation, which The Big Society considers central to its mission, are all about the way in which things are done, and therefore the process actually becomes the policies the charity sets down and promotes as best practice.
Overall, Philosophy, the last of the ‘P’s, and the one added by Bruce (1998) runs through everything – it is the starting block and it is the tramlines between which the runner speeds, it is the finish line, and all the audience watching in the stadium and on world-wide television.  It is what identifies the charity as unique and it is reason for existing in the first place.  However, there is an inherent problem, and one that The Big Society and all organisations must deal with, and that is timeliness.  There are timeless philosophies such as to do good or to help others, and these provide a basis for the work, however, they do not provide a specific philosophy; they do not relay how the charity feels. A marketing strategy can help an organisation find this. In the case of The Big Society, since 1919 our philosophy has always been to help people with learning difficulties, but now it has become focussed on how to facilitate adults with mild learning difficulties into becoming inclusive members of society.     
It may be useful now, to return to the point at which this report started, that of defining what marketing is.  This I would suggest can be identified ever more simply.  A marketing policy “should recognise the fact that consumers' demands are the origins of economic impulses,” (Collins 1930) - or its purpose can be simplified as “to satisfy your customers" (Baker 1991), or finally, it can be reduced to just two words “Meeting Need” (Bruce 1998). I would suggest that like many other not for profit organisations, The Big Society does have a marketing strategy, but only in an adhoc and accidental manner, and therefore the challenge in the future may be identifying where the marketing exists, building on it, and fulfilling the potential value integrating marketing into the organisation would bring.
The Value of Effective Marketing by Trevor Maynard © 2002
References

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Keaveney, P. (2001) “The Charity Brand and its identity – who you are and what you do” in Marketing For the Voluntary Sector, Keaveney, P. and Kaufman, M. (Eds.)  Kogan Page

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