September 01

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Marketing Management in Nonprofit Sector.

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With Donald Odhiambo- Business Development Manager, Amref Heath Africa , Nairobi ,Kenya.

Marketing Management in Nonprofit Sector…

When we think of Marketing we relate it to words and actions such as; selling, creating demand, making profits or similar words. I had always assumed that  a dedicated volunteer working  in  the non-profit sector,  with the noble objective of serving disadvantaged communities, healing wounds  of  war victims, rushing  to  rescue flood victims and similar humanitarian works  would distance themselves to anything  related to  such words . Dr Philip Kotler, an American marketing author, consultant and Professor, defines Marketing as a process of creating, communicating and delivering value to customers in order to make profits. It is basically a two party exchange.  So frankly speaking transferring the concept of Commercial Marketing to the nonprofit sector may not be very smooth, for obvious reasons.

Let’s compare both sectors (Enterprise and Nonprofit) superficially looking through lenses of marketing. There are two major components of enterprise one of them  is  “Business” which has tangible products , services  or value. The other component   is ”the Customer “ who has  needs and potential to purchase these products. Businesses want to make profits and Customers want to  meet their needs  with the best  options available  within reach. Unlike enterprise, Nonprofit involves multiple party exchanges eg Donor, NGOs, NGO Implementing partners, Beneficiaries etc. The donor carries out  its specific development objective through nonprofit organization to benefit constituents. Here the nonprofit is expected to give reports , feedback (and now even impact report as per guide line of SDGs). There are many other factors that play a significant role in a donor’s decision to select a particular nonprofit for its development work in  an area , country or  region .  Few of  the external factor are local and regional Government recommendation, current priorities of the relevant ministry, policy makers, political and social environment  and internal factor like  credibility of an NGO , capability, reach to communities  and work experience, relationship  management etc.

In last few years, globalization, the advent of newer technology, mushrooming of large number of  NGOs  competing with each  other, rising demand  of donors for seeking control and  accountability for work, reducing loyalty of donors  therefore poor donor retention,  change in regulatory requirements and public policies, sudden change in political environment , regional and local government  priorities  and  their  influence on donors  and many more has  put some  serious question on sustainability of  NGOs. There are many NGOs with track record of significant contribution to economic and social development are finding difficult to sustain due to shortage of funds. Although some nonprofit organizations are responding to such changing dynamics and have adapted popular methods of marketing due to need or as a compulsion.

Dr. Philip Kotler explains scope of marketing in NGOs sectors; he writes that

“Marketing is the function of a nonprofit whose goal is to  plan, price,  promote  and distribute the organization’s  programs and products by  keeping  in constant touch with the organization’s  various constituencies(communities and donor)  ,uncovering their need  and expectations for  organizations and  themselves and building a program of  communications to not only express the organization’s purpose and goals ,but also their mutually beneficial want –satisfying products”.

There is a great scope for nonprofits to utilize some core principles of marketing to not only improving fund raising but also to implement their programs in delivering best impact on beneficiaries and satisfaction for donors.

Some of these principles include; segmentation, positioning, market research, creating and communicating value, and customer relationship management.

In addition there is a huge scope for nonprofits to capitalize on its reach, impact data , varied data base and experiences and  innovations  to  create products and commercialize in form of strategic partnerships or as social enterprise to generate own income to answers questions arising on sustainability  for long run.