Publice sector & NFP marketing issues

Marketing Issues in Public and Not for Profit Sectors

Till the early 20th century , social service provision in the UK was undertaken primarily by the voluntary sector (on a not- for-profit basis . It was only in the 1940s that the State came to dominate the funding and production of healthcare , education and social insurance Recently , a new breed of NFPs have emerged in the UK which are providing major public services , and the government is playing a major role in their financial position and their sphere of activity . In the case of

the Welsh Water utility , Glas Cymru , and Railtrack 's successor , Network Rail , these are monopoly suppliers of public services where the current NFP status has arisen from the financial weakness of their predecessors The government is also creating such setups in health sector like NFP Foundation Hospitals and has indicated that it may also create NFP Primary Care Trusts . Older concept of NFPs was merely non-commercial and they heavily depended on grants and donations to survive other than government provided finance . However , this new breed of NFPs is commercial and is making all out efforts to survive in the commercial market . Still all rules of marketing applicable in commercial organizations are not valid for public or NFP sector due to varying reasons which are discussed in the succeeding paragraphs

Before going into the details of marketing strategies of commercial and public or NFP sectors , we must take a glance at what a marketing strategy is . It is obvious that a marketing strategy is derived from broader corporate strategies , corporate missions , and corporate goals It has to be in line with the overal organsational objectives and should help in attainment of the same . A good marketing strategy should integrate an organization 's marketing goals , policies , and action sequences into a cohesive whole . It should provide a platform from which plans could be developed and implemented . The most important thing is that the marketing strategies are heavily influenced by a range of microenvironmental factors . When we talk of the commercial sector , the marketing strategies may be based on achieving market dominance . These may deal with the company 's expansion and growth needs or in pusuance of a new product . Then there can be strategies which seek to answer the question as to how should the firm grow . Marketing is , at base , simply an activity carried out by individuals and organizations to achieve certain personal and social ends

To understand the difference between the marketing strategies of commercial and NFP sectors , we must consider the ways in which organisations differ between these sectors . Non profit organisations have unique characteristics which differentiate them from for-profit organisations . Major difference is the organisation structure and culture of NFPs . Nonprofit organizations are directly funded by individual and corporate donors , foundations , and government grants as well as by revenues from sales . They are also indirectly funded by tax concessions , donations of goods and services , and voluntary labor Another unique characteristic of NFPs is that those who provide resources do not have any influence on organisational decision making Moreover , they also receive no distribution of organizational surpluses and so their commitment to organizational success must come about in other ways

On the other hand , commercial marketers have very clear , relatively simple metrics by which to guide and evaluate their efforts , such as sales , market share , and profits . When we talk of the NFP marketers they are often challenged to achieve difficult-to-measure goals like reducing spousal abuse , increasing physical activity , or making the end-of-life years less stressful . Such challenges are hard to measure very long term , and subject to all sorts of influences outside the marketer 's control

There is also an inherent limitation on the functioning of NFPs that they are bound for formal or informal public scrutiny . This scrutiny may be by the government , a funding source and /or the general public as represented by the press or academic researchers and critics . This scrutiny , among other effects , makes risk-taking more difficult for nonprofit marketers and increases the importance of "politics " and "public relations " in the marketing mix . The constant need for outside assistance and /or the constant oversight by other individuals and agencies increases the need for nonprofits to market simultaneously to target customers and to those who are giving assistance or regulating activities . Another major difference between the commercial and NFP sector is that the commercial marketers often have generous budgets to meet given challenges . On contrast , NFP marketers have lot of limitations of spending . Then there are too many watchdogs who consider that spending on high salaries and advertising is a mere waste

Another scenario to understand is that the organisations outside of the commercial sector are not prone to the market pressures . As such the marketing strategies of such organisations are not driven by the customers or the market . Within the public sector , local and county councils are being asked by central government to tighten their spending while at the same time be expected to deliver improved services to their electorate . This puts a tremendous pressure on the organisation structure and planning process in these organisations

The Public and NFP sector is growing at a rapid pace in UK . In the year 2003 /04 , the sector 's ?1billion from the previous year . In the following year , England , Wales and Scotland all saw increases in income , whereas Northern Ireland saw a small decrease . This overall increase , however , is mainly due to the increasing number of organisations entering the sector . The focus of growth has been in the areas of Charity , Housing , Education , Central Local Government . One of the major drivers contributing to the growth of this sector has been the requirement for organisations to adopt a more commercial focus in their operations and support structures . These initiatives are not limited to organisational and structural reform but cultural change as well . The sector is now turning to be more proactive customer focussed with increased accountability and responsibility

NFP and Public sectors have come a long way . The world of public sector and nonprofit managers is rapidly changing . Increasing demands are being placed on managers in these sectors to adapt to their new environments Pressures to demonstrate value for money and also to prove their worth especially in making a measurable impact on their community , have become more intense for all public sector services in the UK . While constantly interacting and surviving with the commercial market , they have learned a lot . Probably the single most important contribution of marketing to the nonprofit world is what has been in teaching them what has been called the "customer mindset " Most people think that Marketing is a tool , but for Governments and Non-profits , it is a way of thinking . It goes beyond selling , and advertising . It is a mindset , which puts

clients first and ensures that the organization 's philosophy is without clients there is no organization

Bibliography

Andreasen , Alan R , A Profits for Nonprofits : Find a Corporate Partner Harvard Business Review , 74 , 6 , November-December , 1996

Edenbrook . Public and Not for Profit . 2006 . Retrieved 13 August , 2006 from HYPERLINK "http /www .edenbrook .co .uk /industries /not_for_profit .htm http /www .edenbrook .co .uk /industries /not_for_profit .htm

Frank , R . H . What Price the Moral High Ground ? Southern Economic Journal

63 (1 , 1996 . pp . 1-17

Grout , Paul , A Yong , Michelle J . The Role of Donated Labour and Not for Profit at the Public / Private Interface . Department of Economics University of Bristol . April , 2003

Margaret K . E , Quality Expectations in the UK public Sector Information Strategy and Services , Loughborough University , UK . 23 June 2000

Sheaff , R , Responsive Healthcare : marketing for a public service Buckingham , Open University Press , 2002

Wikipedia . Marketing Strategies . 2006 . Retrieved 12 August , 2006 HYPERLINK "http /en .wikipedia .org /wiki /Marketing_strategy http /en .wikipedia .org /wiki /Marketing_strategy

Graduate Prospects . Voluntary : As it is . Prospects House , Manchester 2006 , Retrieved 12 August , 2006 from HYPERLINK "http /www .prospects .ac .uk /cms /ShowPage /Home_page /Explore_job_sectors /V oluntary /As_it_is /p !ejFagm http /www .prospects .ac .uk /cms /ShowPage /Home_page /Explore_job_sectors /Vo luntary /As_it_is /p !ejFagm

Wilkie , William L . and Elizabeth Moore "Marketing 's Contributions to Society " Journal of Marketing , 63 , 4 October , 1999

Paul , Grout , A Michelle J . Yong . The Role of Donated Labour and Not for Profit at the Public / Private Interface . Department of Economics University of Bristol . April , 2003 .

. 1

Wikipedia . Marketing Strategies . 2006 . Retrieved 12 August , 2006 , ibid

Wilkie , William L . and Elizabeth Moore "Marketing 's Contributions to Society " Journal of Marketing , 63 , 4 , October , 1999 , pp . 198-218

Andreasen , Alan R , A Profits for Nonprofits : Find a Corporate Partner Harvard Business Review , 1996 , 74 , 6 , pp . 47-59

ibid

R . Sheaff , Responsive Healthcare : marketing for a public service Buckingham , Open University Press , 2002 ,

. 152

Frank , R . H . What Price the Moral High Ground ? Southern Economic Journal , 63 (1 , 1996 . pp . 1-17

Edenbrook . Public and Not for Profit . 2006 . Retrieved 13 August , 2006 from

Graduate Prospects . Voluntary : As it is . Prospects House , Manchester 2006 , Retrieved 12 August , 2006 from Margaret K . E , Quality Expectations in the UK public Sector Information Strategy and Services , Loughborough University , UK . 23 June 2000

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