MARKETING FOR NONPROFIT ORGANIZATIONS

Class Handout and Exercise

The marketing mix: Four Ps for Non Profit Organizations

Source: www.knowhownonprofit.org (USA, January 2015)

The marketing mix is integral to building a new service or campaign or fundraising product. It also plays
a central role in reviewing an existing product to make sure it is effective.
In 1964 Neil Borden, a professor of advertising at Harvard Business School, said that building a product
(good, service or idea) is a bit like baking a cake. Borden said that the secret is making sure you have all
the right ingredients for it to be really satisfying. He defined four essential elements for the marketing
mix, sometimes called the 'four Ps':
Product
The product itself, its quality, its features, the benefits which it brings. These need to be defined from the
customer's perspective and you need evidence that this is what they really want, not simply what you
think they need and ought to have.
Price
The price the customer has to 'pay'. This sometimes seems unnecessary in the non profit setting but this is
wrong. We have open pricing on many of our activities eg membership fees, charges for some services,
priced fundraising products such as "£4 will restore someone’s sight in India" or "£5 for a pack of
Christmas cards". Getting the price right is crucial.
In addition, many of our products have hidden prices which you need to recognise and try to reduce. For
example, for a newly disabled person, the 'price' of leaving the support of their family to go away on a six
week residential rehabilitation course may be too high to pay. This 'price' can be lowered by providing
transport home every weekend.
Promotion
The promotion of the product is how you let customers know your product is available, for example
through advertising or PR.
Advertising is one of the most effective ways but is normally costly in the quantities required. But even
the smallest non profit can get coverage in the local press. Don’t forget the importance of encouraging
word of mouth promotion. It is reckoned that 50 per cent of customer recruitment is through word of
mouth.
Place
The place, that is where you distribute your product to your customers. You are likely to use a wide range
of 'places' to distribute your activities For example, in fundraising there is direct mail, press and radio
adverts, street and house-to-house collections, fundraising dinners, telephoning and face to face.
Many of these are useful in campaigning, but you can also use direct action such as carrying banners at
the town hall and organising flash mobs, or more sedate methods such as petitions and delegations.
For services you can deliver them residentially or direct to people homes, using specialist paid staff or
trained volunteers, by post or by email, etc.

Three extra Ps for service marketing

The four Ps are a really useful checklist of 'things to get right' for a physical good such as a wheelchair, an
adapted computer or a low tech irrigation system. But in non profits, as in the commercial economy,
services dominate.
Marketing researchers Booms and Bitner added these extra Ps to the marketing mix for services.

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People
People refers to the knowledge, skills and values of the people delivering the service, but also the
customers and how they interact if the service is delivered to a group, for example in an old people's
home.
The knowledge, skills and values of your service deliverers are crucial to good quality. A service is
produced and consumed at the same moment, unlike physical goods which can be quality-checked before
it reaches the customer.
Your staff and volunteers need training and need to be empowered to change the service (within limits) on
the spot if customer expectations are not being met. Where services are delivered to groups the
membership of these groups needs to be thought through. If they contain people with a wide range of
needs, none may be satisfied.

Physical evidence
Physical evidence refers to what's used to promote and run the service, for example the quality of the
promotional leaflets, the appearance and cleanliness of the rehabilitation centre.
Services are quite abstract and it is difficult for customers to judge real quality. Good physical evidence is
likely to make your customers feel they are getting a quality service. Bad physical evidence will make
them feel the service is bad even if it is good! For example it is hard for the potential customer to imagine
a service will be good if it the descriptive leaflet is poorly written, designed and printed.
Processes
Processes refer to what the customer has to go through, for example how easy is it to register for the
service, pay for it, find out about it in advance or get a vegetarian meal.
An example of a good customer-focused process comes from RNIB, which was one of the first charities
to bring in credit card payments over the phone. It is much easier for a blind person to read out a credit
card number than to listen to a tape-recorded invoice and then write a cheque and address an envelope to
post.

An additional P for nonprofits

In the 1990s an eighth P particularly for nonprofits has appeared in literature:
Philosophy
Philosophy because nonprofits nearly always have a philosophical/values base to what they are doing
which is consciously and openly known and needs to be embedded in all the activities.
If you are a small organisation with only a few volunteers and staff, your philosophy and values may
simply be 'the way we do it round here'. But as organisations grow and units become more separate,
'different ways' develop and this can cause products within an offering to become inconsistent.

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Group Work:

IDENTIFY THE MARKETING MIX FOR THE FOLLOWING PAKISTANI NPO

Edhi Foundation
For details check http://edhi.org and use online sources to develop your answer.

WRITE YOUR KEY POINTS ABOUT THE “8 Ps of Marketing Mix” AND DISCUSS IN
CLASS