Marketing the Public Sector

Promoting the Causes of Public and Nonprofit Agencies

Seymour H. Fine

• Publisher: Routledge
• Year: 2017
• Print ISBN:
  9781138527676
• eBook ISBN:
  9781351506823
• Topic: Business
• Subtopic: Business General
• Index: Business

The administrative officers of public and nonprofit organizations have become increasingly interested in marketing techniques during the 1990s. They reason that if commercial marketing methods can successfully move merchandise across the retail counter, those same techniques should be capable of creating a demand for such "social products" as energy conservation, women's rights, military enlistment, or day-care centers. The goal of this volume is to provide social sector executives with practical and effective guidelines on how to harness the power of marketing in order to improve service to their constituencies.

Marketing the Public Sector builds upon two decades of research in social marketing and represents the current state of the art. The authors demonstrate how the principles developed in earlier studies can be applied in actual situations. Included here are case studies of marketing plans prepared for hospitals, political campaigns, Third World social change, and community foundations that proved to be as effective as those in the private sector.

The case study approach is effectively supplemented by theoretical chapters that define first principles in essential matters such as product management, value determination, advertising, and analysis of market performance. This amalgamation of theory and application is suitable to middle-range social marketing sizes as well as full-scale projects that large agencies might undertake. The problems differ only in magnitude; no organization is too small or too large to adopt a consumer orientation. Marketing the Public Sector is not only a guide to marketing; it is also about communication, social change, propaganda, and education. It will be of great interest to sociologists; public sector administrators; and specialists in communications, public relations, fund-raising, and community affairs.

1

Introduction to Social Marketing

Seymour H. Fine

Rutgers, The State University of New Jersey

On March 1, 1985, Marketing News, the official newspaper of the American Marketing Association (AMA), announced a revision in the association’s twenty-five-year-old definition of marketing. According to the new definition, “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives” (AMA 1985, p. 1). This definition differs from the earlier version mainly in the addition of “ideas” to “goods and services,” all of which are now considered products. Note, too, that the new term appears at the head of the list, before “goods and services.” This change marks a milestone in the evolution of social marketing as it reflects the new emphasis this discipline is placing on the dissemination and exchange of ideas.

As noted in the Preface, this book is the sequel to The Marketing of Ideas and Social Issues (Fine 1981), which presented the theory and principles of social marketing. The present work expands on those principles and shows how they can be applied in the concept sector, that is, in public and nonprofit organizations (P&NPOs).

The discussion opens with an overview of social marketing as it might be employed by a university in the conduct of its business. The university provides a convenient example because it can be either a public or a nonprofit institution. In addition, the university administrator is a useful vehicle for explaining the role of social marketing in market planning for college products.

The marketing plan developed in the following pages is based on a “7P’s” marketing model, which is an extended form of the widely known “4P’s.” The so-called turf question is also touched on briefly here, as it gives an idea of where marketing fits in the organizational structure. First, however, a few words on the history of marketing are in order.

Background

Marketing emerged as a discipline following the industrial revolution, when the supply of goods began to exceed consumer demand. Before then, merchandise was generally made to order. As mass production increased the supply of merchandise, however, there was far more than enough to meet society’s basic needs and it became necessary to stimulate demand to take up the excess. Thus, people began to acquire things not only because they needed them, but also because they wanted them. Those wants were created by marketers.

But something else was taking place at the same time. The growing emphasis on material things was accompanied by widespread social change. As factories expanded, cities attracted more people. Forced to live in overcrowded urban areas, people began to develop new psychosocial problems, which gave rise to various human rights movements, new social services, and new social goals. Individuals and organizations concerned about these new “social products” (see Table 1.1) saw that marketing methods could be used to publicize them.

In both the public and nonprofit sectors, social marketing found a fertile seedbed. On one hand, the concern for human rights created pressure for government action. On the other, it led to the establishment of nonprofit institutions, which were seen as a means of meeting social needs being overlooked by public and private enterprises such as the need for schools, hospitals, non-toll roads, bridges, canals, and waterworks. In other words, “the voluntary nonprofit sector emerged to fill a sector gap” (Benson 1985, p. 26).

An early example of a nonprofit institution is the Boston Athenaeum, organized by some of Boston’s wealthy citizens in 1807. Its founding statement reads:

The class of persons enjoying easy circumstances, and possessing surplus wealth, is comparatively numerous. As we are not called upon for large contributions to national purposes, we shall do well to take advantage of the exception, by taxing ourselves for those institutions, which will be attended with lasting and extensive benefit, amidst all changes of our public fortunes and political affairs. (Lipset 1986, p. 11)

Government marketing probably dates back to a statute of 1792 requiring that “openings for mail routes be advertised in one or more newspapers for at least six weeks before contracts could be awarded” (Yarwood and Enis 1982, p. 37). Social marketing became widespread in the public sector following the Depression, when the government began disseminating information about its New Deal programs, such as the Tennessee Valley Authority, the Federal Housing Administration, Social Security, and Works Progress Administration, which already had its well-known blue eagle logo. Today, the government is one of the largest advertisers in the nation (see Chapter 2).

TABLE 1.1 Some Current Social Products

Merchandising the University

At first glance, the idea of marketing a university might remind one of a real estate deal. But the university has far more to sell than buildings, or even its most obvious product, education. Nonetheless, its various offerings—its product mix—can be compared to those of a commercial enterprise.

Like the marketer of any product, one who is marketing a university must consider product design, the potential customers, the price to be paid, the method of conveying product information to the customer, the method of delivery, and the type of information needed about would-be customers and their demands. These are the tools of the marketing approach. They help the university—or any organization for that matter— plan its strategy for solving problems and achieving business goals.

Colleges and universities, spoiled by decades of basking in a seller’s market, have been shaken by the recent shift to a buyer’s market. Consequently, many education administrators have come to see themselves as professional merchants who must attack their problems from a marketing perspective, where the main emphasis is on the student market. To be sure, the university must “deal with” (this term itself implies that the university is taking on the role of merchant) other groups quite apart from its students—trustees, faculty, staff, contributors, and others. In any case, university marketing is social marketing. What is being sold is the idea that personal development has human value. According to the AMA definition presented earlier, idea marketing is social marketing.

Proposed: An Expanded Marketing Model

The marketing of any product, tangible or abstract, benefits from the preparation of a marketing plan, usually one based on the time-honored four P’s—product, price, promotion, and place (distribution). The formula by which the marketer allocates resources to each of the four P’s is called the marketing mix. Thus, for some total marketing budget, one unversity might invest more in the product (perhaps by rendering higher quality service), and less in the promotion of it (advertising, for example). In theory, the organization that creates for itself the optimum marketing mix should emerge as the most competitive one in the marketplace.

The question is, does the 4P’s model provide the marketer with the optimum mix? I suggest that the model needs three more P’s: producer (marketer or source of the promotion), purchasers (those to whom it must appeal), and probing (i.e., research). This expanded model provides the broad framework needed to prepare an effective plan and achieve the optimum mix. The 7P’s model is used to analyze actual social marketing programs in this chapter and in Chapters 2, 7, 8, 10, 13, 14, and 22.

The Marketing Plan

The first step in devising a marketing plan is to formulate the questions implied by the 7P’s:

1. Who is the producer, the source of the promotional message?
2. Who are the potential purchasers in this particular market and what needs and wants do these people have?
3. What specific product(s) can the marketer design to help fill those needs?
4. What price(s) must the purchasers sacrifice in order to obtain this product?
5. How can the marketer promote (communicate with) the given market?
6. Which parties (institutions) will participate in making the product available at the best place and time (best for the purchaser)?
7. What probing will be necessary to evaluate the marketer’s campaign and to obtain feedback from the purchasing audience?

Goals and Objectives. Planning begins with the identification and statement of the marketer’s goals. As Brady (1984, p. 48) has pointed out, however, a distinction must be made between goals which are “long term outcomes, usually two years or longer; somewhat generally stated,” and objectives, which are “short term, one year performance tasks; stated in more specific terms, answering what will happen, by when and with what service or program.” This interpretation fits in with the 7P’s model, which distinguishes between products (objectives) and the promotional message (goals). However, the two are closely related. For example, if a university’s principal goal (message) is to maximize the number of enrollments, then it must develop strategies for increasing student activities (product or objective). Thus, a given goal may imply certain objectives. It is crucial at the outset not only to articulate the organization’s goals and objectives, but to rank them in order of importance. No institution can expect to attain all its objectives at once; thus it must first concentrate on the one or two having the highest priority. By listing the objectives, marketers can immediately determine the “optimum product mix”—that is, those offerings the organization should concentrate on in its marketing efforts. The marketing plan is essentially an outline of the 7P’s model. Each of the seven elements provides a basis for thought, discussion, and documentation in formulating an effective strategy for meeting one’s objectives. Consider how this might apply to a university.

Producer. The main goal of an institution of higher learning is usually to help students achieve their full intellectual and creative potential. To reach this goal, the institution sets objectives having to do with student performance and behavior and it tries to convince the students of the value of these objectives, in the same way that marketers try to convince their customers of the value of a product. Thus, the producer or marketer in this case is the university, which most individuals look up to as a trusted and credible source. Were that not so, the producers of a social product might be well-advised to find themselves a spokesperson, as governments often do to promote their programs (see Chapter 22). The point is that “the concept initiator, as the source of the message to be communicated, has a special responsibility in concept marketing. A concept makes more sense to the audience when it is promulgated by a reliable and dependable person or organization” (Fine 1981, p. 56).

Purchasers. This component of the marketing plan is made up of the consumers, also known as the audience, target market, market segment, constituency, customers, and clientele—to use a grammatical term, these are the “direct objects” of promotion. One does not just sell something; one sells it to people; would-be purchasers must be identified at an early stage in market planning. The university must appeal to prospective students and their parents, high school guidance counselors, business firms, and many others who “buy” that particular brand of higher education.

Usually, it makes sense to divide a market into smaller segments as it is more effective to address each separately. This process is called market segmentation (see Chapter 11).

Product. According to product management theory, products are designed to satisfy the needs of the markets for which they are intended. The plan should contain a comprehensive list of all “items” in the product mix, some of which are suggested in Table 1.2. The matrix presented there is called a “product market scope.”

At one stage of design, one must choose an appropriate name for the product. Marketers have learned from studies in psycholinguistics that what something is called greatly affects a person’s response to it. That is what Charles Revson meant when he said that Revlon doesn’t sell cosmetics, it sells hope. Similarly, Avis sells transportation, not car rental, and health spas offer “fitness” not “rigorous exercise.” It’s not the steak but the sizzle. This suggests that one should promote what people want to buy, not what one wants to sell. Should the university, then, sell education or self-improvement? More people want the latter than the former. Thus, the Harvard Executive Training Program is a palatable product that offers a good brand name.

Price. To determine price, the producer must find out what value people place on its products. These values are measured not only in money. What consumers pay in exchange for a product may include time, effort, a change in life-style, or, in the case of higher education, the opportunity cost of delaying employment. These “social prices” must be taken into consideration when planning marketing strategy, particularly in the case of education.

Tuition is only a small part of the total resources students expend, and the university is well-advised to recognize those social prices. For example, waiting in inordinately long queues in antiquated registration procedures is a high social price students must frequently pay for education. A simplified drop-add process reduces this social price for services, and should be promoted as such. One important way to increase patronage is to make the customer feel he or she is getting good value for the product being purchased. That is really what price is all about (see Chapter 9).

Promotion. A vital component of the marketing mix is promotion, which refers to communication. It is a mistake, however, to put this item at the top of the planning list. Before one can shout from the rooftops about the virtues of a product, one must be sure the product is fully designed, as a recent incident wil...

Table of contents

• Cover
• Title Page
• Copyright Page
• Contents
• Preface
• About the Author
• About the Contributors
• 1 Introduction to Social Marketing
• PART ONE THE PUBLIC AND NONPROFIT INDUSTRY
• PART TWO SOCIAL MARKETING PROCESSES
• PART THREE APPLICATIONS
• Appendix
• References
• Subject Index
• Author Index