Some Differences of Nonprofit Marketing and Commercial Marketing
The aim of this paper is to post the nature of differences between nonprofit marketing and conventional commercial marketing and state some implications to the nonprofit marketers. It begins with a section dedicated to a review of nonprofit marketing concept. Afterwards, a series of comparison of nonprofit marketing and for-profit marketing is put forward associated with the implication and cases of Cancer Research UK. Finally, relevant conclusion is presented.
Notprofit marketing is different
Kotler and Levy (1969, p.15) started to state that the Marketing Philosophy could be applied to nonprofit marketing organizations in 1969. They stress that one of the modern marketing's meaning is “sensitively serving and satisfying human needs”, which make the marketing concept useful to all organizations. In their opinion, the choice for the management of nonprofit organization is not whether to adopt it or not, but whether to do it badly or well(Kotler and Levy, 1969) .
Blois (K.J.Blois, 1999) define that “Nonprofit marketing is part of ‘non-business' marketing which relates to marketing activities conducted by individuals and organizations to achieve some goals other than ordinary business goals of PROFIT, MARKET SHARE, or return on investments”.
As the society is moving on, the nonprofit organizations are developing very fast and also facing more intense market pressure. They are still devoted to” doing good”, but also they know without good management but only with good will is not helpful to the organization performance and reputation(Drucker, 1989). Marketing plays an even more important role to the management of many nonprofit organizations.
However, compared to commercial marketing, nonprofit marketing is definitely more complicated. Some features of the nonprofit organizations make the nonprofit marketing different and more complicated (Gallagher and Weinberg, 1991).
Cancer Research UK is a national registered charity to protect and promote the public health. It is dedicated to the research and prevention, treatment and cure applications of cancer, also provide information and raise public understanding of such matters(Anonymous), 2009). As a nonprofit organization, Cancer Research UK adopts a lot of marketing techniques and approaches. The differences of nonprofit marketing and commercial marketing are reflected in the marketing activities of it.
The goal of nonprofit marketing is nonfinancial and multiple
From the starting point, the nonprofit marketing is different to the for-profit marketing. The task of nonprofit marketing is undoubtedly different to the conventional commercial marketing whose goal is financial profit maximization. They intend to make some social benefits like education, health, safety, environment and other benefits to individuals and the public. And a nonprofit organization often have several goals base on its mission(Gallagher and Weinberg, 1991).
Take Cancer Research UK as an example, it claims that they have ten goals which are including: “people will know how to reduce their risk of cancer; the number of smokers will fall dramatically; people under 75 will be less likely to get cancer and etc”(Anonymous). All of these goals are distinctly not related to financial profit.
It's relately easy to measure commercial marketing success. Gallagher and Weinberg(Gallagher and Weinberg, 1991) stated that money is a measure of success in business. So it is easier to evaluate the result of marketing efforts for the organization focus on the profitability. But regarding to the nonprofit sector, marketing results are difficult to quantified and evaluated separately(Yorke, 1984).
To better estimate the contribution of nonprofit marketing program has made toward the certain objectives, it's important for a nonprofit marketing manager to set up well-defined goals and prioritize the multiple goals. And to make the public more easily understand and evaluate, the results should be made to more quantifiable.
Cancer Research provide a detail number of its goals and also the measurement method. For example, it states “three-quarters of the UK People” to better introduce their first goal-“People know how to reduce their risk of cancer”. To illustrate its achievements in 2008/09, it uses a lot of statistical numbers in its annual review, which provides a clear picture to the public for measurement. For example, to explain the process of dropping the number of smoker, it uses “1.3 million” which is the decreasing number of UK smokers from 2005 to 2007(Anonymous). However, it should point out the priority of the goals or which the most important ones are.
The nonprofit marketing does not always satisfy customer needs
To seek the profit, most of commercial marketers apply marketing orientation to satisfy the need of target audience. But in nonprofit organizations, the consumers who have opposite attitude to the organization offerings are often included in the target group(Bloom and Novelli, 1981). These groups are often unwilling to change their behaviour as the nonprofits requested, so it will be more difficult for the nonprofit marketers(Fox and Kotler, 1980). Moreover, Rothschild (Rothschild, 1979) stated that with highly defensive attitudes, these target groups are more resistant to change their views than consumer who have negative feelings of the products in the commercial marketing. And even that nonprofit organizations often pay more attention about their society benefit than catering the customer need(Sargeant et al., 2002).
In commercial marketing, consumers make decision considering the product or brand in their mindset. The marketing managers just look for the changes after the primary need. But in nonprofit area, the marketing managers often seek the consumer behaviour change which is new to the consumer, or ask the consumer to stop their favourable activity. It's probable a change in primary need(Rothschild, 1999).
It will clearly lead to dissatisfactory if the nonprofit organization does not please the customers. But even though the customer consideration is important, but from the point of social benefit, it's often not the only consideration in nonprofit marketing. So nonprofit marketers should firstly have a clear understanding of the mission of the organization and then closely check and balance the marketing activities adhering to the mission and goals.
An example is The“Out of Sight, Out of Mind”campaign led by Cancer Research UK ,which is to urge the government to prohibit tobacco displays at the point of sale or vending machines, and introduce plain packaging for tobacco products(Anonymous). Apparently this campaign will not appeal to the smokers which maybe some of them are donors. But as one of their goals is to drop down the number of smokers, and with the notion of long turn benefit to the society and the individual, Cancer Research UK works with effort on the campaign and gets a successful result.
The nonprofit marketing is serving multiple publics
Commercial marketing has one marketing function to seeking satisfy the consumer to make the profit. Shapiro (Shapiro, 1973) pointed out that it works because the organization has only make the profit from one constituency by offering products. The commercial organizations focus one public-who pay for their products. He also stated that the nonprofit profit marketing is different as they should simultaneously cater to at least two broad groups including the customers who are target audiences or recipients of the services and the donors who pay. Dolnicar and Lazarevski (Dolnicar and Lazarevski, 2009) stated that nonprofit marketer should use separated marketing to the different group.
But it is difficult for nonprofit marketing to meet the needs of all the groups. For example that if one customer who is paying has different needs with another who is receiving; it is dubitable whether the organization can satisfy both sides of needs to the full. Providing stakeholder and government are also involved in the need, it will be even more difficult to be settled down (Bruce, 1995).
Nonprofit marketing activities to the beneficiary and the donors should be different to get more effective results. Though it is more complicated, it's also a good practice for the nonprofit marketers. A successful marketing manager must be able to satisfy both groups. Besides implementing the campaign for the recipients, the manager should more rely on the cause related marketing and event marketing to build up good relationship with the funders and other related parties.
Cancer Research UK has a very successful marketing event-“Race for Life”. It's over 16 series and become UK's largest women-only fundraising event. In 2008 around 686,000 women came to this event to walk, jog or run the 5k course. Some of the participants were donors, some people were sponsored by others and some were the volunteers and other groups(Anonymous). Cancer Research UK applied a lot of marketing tools such as internet marketing, the minisite in the Facebook as an example, to promote this flagship event. The event was appeal to the multiple groups and raised over £60 million for the organization.
Special competition in nonprofit marketing
Nonprofit organizations have a fast development in resent years. And the competition they face is fiercer than before. But contrast to the business sector, the nonprofit organizations should have consideration on their more complicated competition. The relationship between nonprofit organizations is to a certain extent brotherly and not irreconcilable(Balabanis et al., 1997). It's different to the common practice in the business sector; nonprofits may have collaboration with some competitors which might be guilty in the business. Because the collaboration is not only good to the organizations themselves but good to the whole society (Putka, 1990).
Nonprofit marketing managers have the opportunity to have a good cooperation to finish their tasks. The composition of force made by the cooperation will make it more efficiently than executed by the individual. If the individual nonprofit organizations devote all to the cooperation marketing activity, they will make more significant achievements(Gallagher and Weinberg, 1991).
Every nonprofit marketing manager should always examine the role in terms of serving and the most important feature of the organization. And the manager should regularly identify and evaluate the suitable opportunities to use cooperation with other nonprofits for a same intention. Marketing research, marketing audit and other field information collection are useful tools to find the good chances for collaboration.
Marie Curie cancer care is a national charity and a direct competitor of Cancer Research UK in some fields. But for an intention to improve the care of people near the end of life, they started collaboration campaign on research of end of people's life and other marketing activities from October 2009(Anonymous). It is a good example of the “competitor cooperation” in the nonprofit organization. The complementary strengths will make them win more achievements on the related field and benefit to the society and individuals.
Nonprofit marketing is facing more intense public attention
More and more marketing tools are applied to the nonprofit organization. For example the caused-related marketing program possibly makes broad public attention for the nonprofit organization and the cause it supports (Polonsky and Wood, 2001). Compared to the commercial arena, the marketing activities carried out by the nonprofit organizations are often subject to more stringent monitoring of the public. The customers, donors, regulators and the mass media are more concerned to every nonprofit marketing activity such as adding new service.
One reason for this difference is that the demand of more transparency in public funded activities, the other reason is that the nonprofit organizations always intend to launch the programs involving health or safety which will get more extensive publicity (Gallagher and Weinberg, 1991). So the nonprofit marketing will be confronted with more public scrutiny which is far greater than for-profit marketing.
To have a good management on this public pressure reality is the best method for the nonprofit marketers. More successful public relation activities and events should be implemented to attract positive public attention. With the positive effect, the fundraising will become more easily. And the organization will set up good reputation to attract more resource. A nonprofit marketing manager also needs to handle any public issues very carefully to avoid negative damage.
Cancer Research UK often employs PR and event marketing to have a good communication with the public. Besides “Race for Life”, other successful cases are including “Ray for Life” and “Run 10K” and etc(Anonymous). And it also focuses on the internet marketing, one of the powerful and cost-saving ways to show its innovation and for better interaction with the public. It is the 2nd prize winner of 2009 ICAW/CAF Charities Online Account Awards (Anonymous). In its website, it provide very detail information about the mission and goals, marketing strategy, their regular report and accounts, activity update and so on. And the part of news and press releases is also a good way for the public to better know it.
Nonprofit marketing is a more difficult game to master than the commercial marketing. The reason is the nature of the difference, including nonfinancial multiple objects, the task to influence negative demand, serving of multiple publics, the more complicated competitive situation and more intense public scrutiny. The more complexity is a challenge to the nonprofit marketing managers. To manage successful nonprofit marketing，they need to have deeply understanding of the organizational mission and adopt the difference in marketing practice of nonprofits.