Marketing Approach For Non Profit Organizations

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DOI: 10.4018/978-1-5225-0731-4.ch008
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Handbook of Research on
Managerial Solutions in
Non-Profit Organizations
Vojko Potocan
University of Maribor, Slovenia
Mustafa C. Ünğan
Sakarya University, Turkey
Zlatko Nedelko
University of Maribor, Slovenia
A volume in the Advances in Public Policy and

Administration (APPA) Book Series
Published in the United States of America by
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Library of Congress Cataloging-in-Publication Data
Names: Potocan, Vojko, 1962- editor. | Ungan, Mustafa C., 1971- editor. |
Nedelko, Zlatko, 1983- editor.
Title: Handbook of research on managerial solutions in non-profit
organizations / Vojko Potocan, Mustafa C. Ungan, and Zlatko Nedelko,
editors.
Description: Hershey, PA : Information Science Reference, [2017] | Series:
Advances in public policy and administration | Includes bibliographical
references and index.
Identifiers: LCCN 2016024301 | ISBN 9781522507314 (hbk)
Subjects: LCSH: Nonprofit organizations--Management.
Classification: LCC HD62.6 .H3468 2017 | DDC 658/.048--dc23 LC record available at https://lccn.loc.gov/2016024301
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156
Chapter 8
Marketing Approach for
Non-Profit Organizations
Hasan Ayyıldız
Karadeniz Technical University, Turkey
Bilgen Akmermer
Karadeniz Technical University, Turkey
Ahmet Mutlu Akyüz

Gümüşhane University, Turkey
ABSTRACT
All marketing definitions focus on the same point: customer orientation and the satisfaction of customer
needs. Within this framework, although marketing approach in most of studies primarily deal with
institutions and enterprises in profit/private sector, it has become crucial for all kind of organizations
including non-profit ones. In recent years, many non-profits have grown larger and continue to improve
their growth and effectiveness. In this sense, marketing is touchstone of developing non-profits. This
part hopes to create a perspective to marketing definition to understand the relevance of marketing to
non-profit organizations and how marketing strategies should be adapted to them for success.
INTRODUCTION
It is well-known that there are three main sectors especially in developed countries. These are private
sector, government sector and nonprofit sector. As a part of world economic and financial system, rapidly
growing nonprofit sector is noteworthy. In particular, the USA and the other developed countries are
considered to be the origin and the cradle of the sector but the sector is also spreading in other develop-
ing countries such as Turkey in the last several decades.
It is observed that very different terms and concepts are referenced in the literature for identification
of the organizations of this nonprofit sector from small local associations to extremely large and profes-
sionally managed ones. For example, nonprofit organizations (NPOs), nonprofit sector organizations,
voluntary organizations, not-for-profit organizations, civil-society organizations, non-governmental
DOI: 10.4018/978-1-5225-0731-4.ch008
Copyright © 2017, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

Marketing Approach for Non-Profit Organizations
organizations (NGOs), third sector organizations, independent sector organizations, charitable organiza-
tions, tax-exempt organizations, social movements and etc. are some of those terms which are used to
define these type of organizations.
Here at the beginning of the chapter it must be highlighted that although the term is commonly in
use in the literature, NGOs must be described as a subgroup of NPOs as others. The term “nonprofit
organization-NPO” is preferred to use in this chapter for expressing the nonprofit sector organizations
because it reflects the exact nature of the concept and has the most common use in the literature of
social sciences.
The organizations which can be described as voluntary or nonprofit have some features. The main
features that a nonprofit organization must have are listed below:
• The organization has always a social mission that includes public welfare.
• The organization can generally be one of these types: a corporation, a trust, or an unincorpo-
rated association. However, no matter which type it is, the organization must have a not-for-profit
structure.
• It must be inhibited personal financial interest by the organization. Management of the organiza-
tion must not be based on self-interests of anyone.
• These organizations do not pay any of federal taxes. They have exemptions.
• The last but the most important feature that causes wide spreading of this type of organization
structures all over the world is their special “tax-deductable” status. This very special feature
makes them more attractive because if one gives a donation or a gift to them, it stays out of the
scope of tax.
For example, the organizations which are predicated that they are nonprofit and have philanthropic
purposes are tax-exempted according to the Section 501 (Exemption from tax on corporations, certain
trusts, etc.) of the Internal Revenue Code in the USA. Section 501 (c) has subparagraphs each of which
contains a list showing exempt organizations. They are:
• According to subparagraph(3): Religious, educational, charitable, scientific, or literary organiza-

tions; testing for public safety organizations. Also organizations preventing cruelty to children or
animals, or fostering national or international amateur sport competition.
• According to subparagraph(4): Civic leagues, social welfare organizations, and local associations
of employees.
• According to subparagraph(5): Labour, agriculture, and horticultural organizations.
• According to subparagraph(6): Business leagues, chambers of commerce and red estate boards.
• According to subparagraph(7): Social and recreational clubs.
• According to subparagraph(8): Fraternal beneficiary societies and associations.
• According to subparagraph(9): Voluntary employee beneficiary associations.
The organizations which take part in the nonprofit sector of the economic and financial system of a
country must balance two things for their sustainability. One of them is their mission that they must be
social and serve for public welfare. The other one is their financial efficiency. This dual imperative of
NPOs has forced them to adopt some available marketing strategies like as private and governmental
ones in order to take place and continue in the system successfully. This is a kind of struggle that NPOs
157

are only bearing responsibility that often neither private nor government sector organizations satisfy
because of the less profitability or lack of public support. Therefore, NPOs must also benchmark, adopt
and then use the marketing strategies that the other sector organizations always use.
THE IMPORTANCE OF MARKETING IN NONPROFIT ORGANIZATIONS
The history of human is filled with efforts to meet continuously increasing needs from their self-sufficiency
stage to welfare society stage. On the one hand, the producers who bring together raw materials, labor,
capital and technology to produce a product for the needs of people, on the other hand, the consumers
who aims to satisfy their needs and pleasures with their incomes, both conflict and need each other con-
tinuously. In this sense, “Marketing” notion has gained a very important role and also become crucial
for all kind of organizations and consumers.
So what is maketing? Why do we need it? Is it just a promotion or advertisement? Or is it an unnec-
essary expense? Indeed, marketing has a very simple meening: Marketing is a strong connective bridge
between consumers and producers to provide optimum benefit for each side. And, by the way, to make
this bridge strong and long-lansting, you have to implement a strategic steps as planning, analysing,
orginizing and controlling. So, we can easily say that marketing is not just a promotion or advertisement,
marketing is a holistic view.
When we look at literature, we see that there are many definitions about marketing. Mainly, marketing
for a profit organizaation can be defined as a management process to achieve organizational goals and
making money by observing the needs of target market and satisfying them better than competitors. Ac-
cording to current definition approved by American Marketing Association Board of Directors in 2013,
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large.
But the important point is that whichever way we look at different definitions of marketing, we see
that they are all focus on the same point: customer orientation and the satisfaction of customer needs.
Customer needs is the key point for any organization to be successfull. However, when we think about
customer needs, we generally talk about physical goods and services. Indeed, there is also an important
need that effect the people’s life directly: “social needs”. So especially in recent years satisfying social
needs that create social value and promote opportunities for people to have active and effective role in
society, become crucial as well as satisfying physical goods and services needs. In this sense, the NPOs
which provide social benefit and welfare by producing social needs (values, ideas, etc.) get a higher posi-
tion in social life as physical goods producer ogranizations. Therefore, in 1969, Kotler and Lavy raised
the marketing concept to the nonprofit organizations firstly. After 1970s, marketing which just focused
on producing physical goods and services according to comsumer needs and create income, has gained
an important meaning also for NPOs whose first aim is to solve social problems and creat social benefit.
NPOs are defined as the third sector after profit organizations (POs) and governmental onganizations
(GOs). NPOs are community based civil society organizations that aim to pursue social public welfare
activities. When focus on the organization types of NPOs (trade unions, associations, private schools,
mercenaries, political parties, etc.), it is seen that they include extremely different types from small local
associations to quite big professional organizations and also active in many areas as education, culture,
158

art, nature, sport, law, etc. So, it can be seen obviously that all NPOs are related to every segment of
society and play a key role for them by providing services not available by profit organizations. Thus,
marketing has very essential strategic meaning for NPOs to sell their social products to their target market.
Although there is a great tendency toward marketing for NPOs, there are still lots of people related with
NPOs’ actions think that marketing is not neccessary for these kind of organizations. These opponents
argued that marketing expenditures wasted the organization’s sources and sometimes the advertising
activities created negative sensation on target groups. So there is no need to spend any time or money for
these marketing activities. However, they have to beaware that they have powerful competitors especially
operate in private sectors and need marketing to stand against them. Also as mentioned above marketing
can create a good financial sources to NPOs. With many examples of NPOs using marketing tools and
create worldwide effect with successful brands e.g., Greenpeace, Unicef, National Public Radio (NPR)
and Museum of Modern Art (MOMA). These all organization have more than millions followers in just
in social media. So, if the NPOs do not adapt theirselves to marketing world, their survival is at risk.
Against to these opponents, NPOs have to be aware of important risks to sustain their activities. So
these all risks, mentioned below, create strong reasons for NPOs to adopt theirselves to marketing realm;
• Reduction of the financial resources obtained from traditional taxes and humanitarian aid sources
• Decrease in consumer satisfaction and participation
• Increasing competition for both POs and NPOs
• Rapid technological change
• The criticism of tax payers, legislators, workers, customers, and related consumers.
Some nonprofit organizations which are aware of these risks started to interest marketing strategies
and developed their marketing departments. As an example, over the last decade the rate of employ-
ing marketing manager in hospitals has increased from 1% to 10% in USA. As an other example, USA
Postal Services (USPS) has developed marketing plans for their staff, and also USA Military uses more
promoting tools as advertisement to attract new members.
On the other hand, when compare NPOs to (POs) and GOs, we see that they all have similar basic
functions (finance, production, management, marketing etc.) and also compete for developing long-term
relationships with their stakeholders as customers, suppliers, employees, and competitors. So because of
the functional structures and risks mentioned above, nonprofits must compete more than POs for funds
and other types of financial support to survive.
In conclusion, although marketing is generally talked for POs, by the help of studies since 1970s
and because of increasing competition, it became a vital need and privileged issue for NPOs also. The
NPOs understand that marketing approach and tools (product development, pricing, promotion and
placing) should be used to keep relations not only with their target group but also with their donors and
stakeholders for both functional and financial survival.
DISTINCTIVE FEATURES OF MARKETING FOR NPOs
Global and regional development has led to an increase in the number of NPOs. Contrary to sell any
physical products, they serve their mission, vision, objectives to target customers for their social benefit
and they should ensure active promotion of these services to get support and to survive in this competitive
159

environment. So, promoting themselves effectively as well as developing and maintaining relationships
with key stakeholders, supporters, customers etc., has utmost importance for NPOs’ managements. A
key strategy for managements that should be used to strengthen the organizations with key partners is
marketing.
To implement a successful marketing strategies, the managements of NPOs should be aware of the
demand and needs of their target group and recognize the distinctive features of their products for them.
But on the other hand the adoption of marketing strategies and techniques among managements is one
of the most interesting but difficult practice for NPOs. Sargent says about NPOs markerting is that:
While many of the tools and techniques commonly used in commercial marketing practice are indeed
equally applicable to the nonprofit realm, the ethos that drives their application can be radically different.
Accordingly, in this part, we will discuss some differences of NPOs and POs in seven topics in the
line of aims, sources and marketing strategies which are the most important points to understand the
basic structures of NPOs marketing road map.
Product/Prodcut Concept for Nonprofit Organization
Product concept for POs contains products and services that have physical attributes and the specifications
like quality, trademark, brand, packaging, etc. are the segments of the commercial products. In case, in
the scope of the NPOs marketing, product contains ideas, social reasons and behavioral changes. In ad-
dition to these mentioned specifications product also contains basic values, requests and needs of target
customers, adaptation of the behaviours that are desired and perceived by the target customer group.
NPOs are typically related to ideas and services rather than physical product. If what is being provided
or what kind of contribution will be made to the public is not identified clearly in these organizations,
the problems begin in the product development and identification. For the physical product-based POs,
when the physical structure exactly shows the benefits provided to the consumer, the NPOs which pro-
vided services create different perceptions on consumers because of being non-physical.
When to focus on the services given by NPOs, you can see many topics provided by them. Sometimes
while some of them focus on one topic and have one main target like UNICEF, GREENPEACE, some
of them can provide various services simultaneously. For example, a beneficial association can provide
various services simultaneously as providing scholarships to students, helping to poor people, intervening
in social issues, etc. There are lots of succesfull NPOs examples from both group but for NPOs serving
various services, it is not exactly clear with which services are priority for this association. This confu-
sion can be the same for both directors and supporters of these NPOs.
One other important point for NPOs is marketing approach for determining their products. Even though
all NPOs state that they don’t have any sales goal and they aim to meet the public’s social needs, indeed
they service the perspective and ideas of their own boards without considering the public’s perspective
and questioning enough. Therefore, the needs concept that are determined by these organizations can be
different sometimes from the needs of the public. However, in recent years, nonprofit organizations have
noticed that they have problems such as for profit organizations about the services which they provided
to the target groups. In this sense, the successful NPOs exactly design their targets and service models
according to the demands of target groups on the basis of the results obtained after searching for markets.
Accordingly, it is very important to understand that while NPOs are identifying their targets and their
instutional values, they are actually acknowledge that they need to use the marketing tools.
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Customer Groups
No organization can develop an effective strategy without knowing its customer. For POs, it is easy
to identify the customers and know who they are exactly. But for NPOs, identifying the customers are
considerably more confusing. So, who is the customer of a NPOs? and how we define them?
Drucker says that:
One of the most basic differences between nonprofit organizations and business is that the typical nonprofit
has so many more relationships that are vitally important. In all but the very biggest business, the key
relationaships are fewer-employers, customers and owners, and taht is it. Every nonprofit organization
has a multitude of constituencies and has to work out the relationaship with each of them.
When to focus on consumer groups of NPOs, we can devide them into two basis customer groups:
“Supporting Costumers” and “Primary Customers”. Supporting customers group is the main differ-
ence between NPOs’ and POs’ customer mass. This group consist of donors or volunteers and are the
contributor part of NPOs. The primary customer group is similar to the customers of POs and directly
apply for the services to get contribution from NPOs according to their expectations. Figure 1 is shown
below about these customer groups.
Supporting customers participate to NPOs by providing money, labour, service, materials, etc. and
these people may benefit from the organization in various ways. For example, governments can get
NPOs as partner to deliver public service programs or they can purchase services from NPOs, rather
than organizing with their own departments. Some popular private individuals donors can benefit from
NPOs to create a good impression on their fans. We can easily increase the numbers of examples for
supporting customers benefits. Therefore, NPOs also benefit from these customers to survive theirselves
and serving their services. So, they have to satisfy these groups also.
On the other hand, primary customers are the main target group of NPOs. And their subgroups’
names generally change according to the organization’s main aims and roles in society. For example,
the people are called as “visitors“ who come to the museums to see the artifacts or the people are called
Figure 1. Customer groups of NPOs
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“congregant” who get services from religious institutions. The people who get services from the univer-
sities are called as “students”or the people who watch theatre are called as “audiences”. These primay
customer benefit from the services of NPOs directly. So generally, the NPOs determine their objectives
and implement activities related to these objectives for satisfying of these groups.
In conclusion although primary customers are seen as the target group of NPOs, supporter customers
also have to be a part of consumer satisfying strategies. So, the main purpose of the NPOs is to realize
basic values, ideas, social requests and needs of not only primary costomers but also supporter custom-
ers in line with their demand. In this regard, this is the one of the main and crucial difference between
NPOs’ and POs’ marketing strategy. Accordingly, NPOs need two different marketing program for these
two different groups. Of course, this situation causes NPOs to have more complicated marketing plans
and practices more than POs.
Non-Financial Objectives
The NPOs differs fundamentally from the POs because of the reason for existence and social mission.
For POs an economist argue that the organization’s main objective and mission is to generate income for
shareholders/employees and provide financial sustainability. Against to POs, the first aim of NPOs is not
financial, it is about to realize the social requests, to accomplish social needs/goals and to pursue social
public welfare. NPOs channel all of their income into programs and services aimed for meeting people.
On the other hand, the NPOs differs from POs because of mission performance measurement also. It
is obvious that all marketing decisions should be evaluated based on their ability to participate in their
own mission. So, NPOs have to define their mission and measure their performance according to this
mission clearly.
Financial Sustainability for NPOs
Regardless of an organization’s for-profit or nonprofit status, the challenges of establishing financial

capacity and financial sustainability (financial sustainability refers to the ability to maintain financial
capacity over time) are central to organizational function. All organizations need resources to maintain
their activities as workforce, raw materials, place, human resources, financial resources, etc. and they
have to remunerate for these resources. While the POs cover most of these expences by their sales rev-
enue, the NPOs do not have any sales revenue to pay for resources. So NPOs have to struggle to raise
funds/grants for operations and sustain the financial sources for sustainability. So, although financial
sustainability is thought to be more important for POs, it has also long been of interest to NPOs’ leaders,
funders, and the communities to sustain the organizations.
To understand differences in factors related to financial sustainability between POs and NPOs, it is
important to identify and understand the long-term goals of the organization. For instance, the ultimate
strategic goal of POs is to acquire profit and market share, whereas NPOs’ financial outcomes are merely
a means to accomplishing an organization’s social mission. Thus, for NPOs it is a complicated situation
to pursue its mission and its financial sustainability together. Also, NPOs face a myriad of challenges
in establishing and maintaining financial sustainability especially for many of them serve high-need
communities that require consistent and continually services.
With this in mind, the meaning of financial sustainability for NPOs is to develop resilience to economic
distress and maintain/expand services during the organization’s lifetime. So it is essential for NPOs to
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create a strategic plan which defines the organizations’ mission and develop strategies on community
support, and collaborative partnerships closely align with this mission, to overcome the challenges of
financial sustainability.
Sales revenue is the life-blood of POs. These companies rely on their income finance their operations.
On the other hand, NPOs rely almost entirely on donations and grants from individuals, government
entities and organizations to maintain their mission for society. Since POs earn their income and pay
their own debts, it is easier and also ethic to spend money. For NPOs, it is a hard to use incomes for
boards. Because of NPOs’ income comes from donors or grants, they are expected to utilize the funding
in a way that maximizes benefits to their targeted clients.
Management Differences for NPOs
NPOs may act differently from POs also about the motivations and goals of management. It is clear
that management style of an organization is influenced by the goals and purpose of the organization.
PO is interested in the trade of goods, services for customers with the goal of making profit to increase
the wealth of the owners. Executives in POs have to direct their efforts towards achieving that goal. In
contrast, a NPO is legally prohibited from making a profit for their owners. All income generated by a
NPO activities have to be used to achieve the purpose defined for the organization. The executives of
NPOs have always be aware of their purpose and ensure that the organization’s operations are imple-
mented according to those purposes.
Moreover, managements and employees of NPOs are all consist of volunteer people and managing
volunteers is different and harder than managing employees in POs. There is no contract or agreement
for these people and NPOs rarely have the resources to staff the organization sufficiently. The executives
often work with people who have individuals passionate about the organization’s mission to contribute
through monetary donations or volunteer hours. This means for executives who want to be successful in
managing a NPO effectively must motivate by a sense of shared accomplishment.
On the other hand, another difference between POs and NPOs is the lack of performance measurement
used to control purposes of organizaiton. For managements of NPOs it is a hard process to evaluate the
performance of the organization, because NPOs do not have physical return e.g., income like POs. For
example, political parties is surving different ideas to their supporter and these ideas have not a physi-
cal features to show their benefits. So it is very hard to see the effects of these ideas on supporters and
the success of political parties. Thus, if you want to evaulate the success of a political party, you have
to see the adoptation rate of the party’s idea by supporters. So the key of measure the performance of
a political party is the ratio of votes in election. This is just an example for one type of NPOs, there are
many different but also hard performance measurement roads for different kinds of NPOs.
The Approach of Government to NPOs
There is a strategical relation between governmental organizations and NPOs more effective than POs.
Especially, in recent years, governments all across the began to work with NPOs in various ways and
to search the community needs and get partner to develop and/or coordinate delivery of public service
programs jointly. Especially, local administrations, they purchase some public services from NPOs,
rather than organizing their departments to produce those services.
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Also, governments and local administrations deal with NPOs development and provide both in-kind
and financial grants to help NPOs so they begin to provide more and better service while facing financial
problems.
How local governments work and support nonprofit organizations? There are some main topics about
the collaboration types below:
• Partnering: Partnering can involve cooperating to create new services, to develop and coordinate
the actual services, or collaborate other joint service programs about economic development, em-
ployment, social events social services etc.
• Purchasing Services: Local administrations buy some public services from outside suppliers,
rather than produce them in their departments. Administrations typically purchase services in
order to save money or to obtain higher quality than would be possible with in-house production.
• Providing Grants: Governments and local administrations also fund NPOs through grants. In ad-
dition to providing grants of money, many local administrations support NPOs by providing them
staff assistance, office place, equipment etc.
Recent Marketing Approach by NPOs
Over the last 40 years, the role of marketing for NPOs has increased. These organizations have real-
ized the value of marketing for creating sustainable relations and developing a strong understanding of
customers and other stakeholders.
The marketing approach also differs for NPOs and POs. Basicly, while the purpose of marketing for
POs is to encourage customers to buy, NPOs use marketing usually to encourage people to give. Although
the principles of marketing are same, some of the methods have to be different.
If we talk about marketing for two side detailed, we would say that the objectives of marketing in the
for profit environment are to let customers to be aware about you and your product/service and to know
how it can benefit them. Profit marketing also focuses on developing new markets for existing products
or identifying markets for new product lines. On the other hand, a NPO markets the mission it has or the
cause it supports, instead of producing any product/service. In this sense, the purpose of marketing is
to build awareness of an idea/event and to gain financial support to existing the organization’s mission.
According to Rothschild (1979) key differences between marketing approach of NPOs and POs
include the following:
• Product: With NPOs ‘products’, there is typically a weaker unique selling proposition, i.e. weaker
direct benefits making it more difficult to direct customer or target audience behaviour in the way
desired. For example, giving to charity provides us with a sense of ‘doing good’ but this feeling
may not be sufficient to induce many people to give.
• Price: This important component of the marketing mix has different connotations in NPOs. For
example, in a political marketing context, what is the price when marketing a political party? Is it
the effort needed to go out and vote, or the economic costs of voting for one party versus another?
In relation to charities, the amount donated is often left to the discretion of the donor and is in
fact largely determined by the donor, rather than being specified by the seller as in a commercial
transaction.
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• Involvement: Whereas we speak of high and low involvement in commercial situations in rela-
tion to the extent to which consumers become involved with a product or service in order to learn
more about it during the purchasing process, the involvement in nonprofit situations displays more
extreme tendencies. People often either really engage with a charity or political party or cause, for
example, or show strong reactions against them.
• Segmentation: In the nonprofit environment, it may be necessary to develop a campaign to drive
behaviour in all targets rather than a specific audience, as in commercial markets. For example, a
road safety campaign might seek to encourage all adults, rather than a specific audience, to drive
at the speed limit. Nevertheless, there may well be a sub-group that needs a specific targeted mes-
sage, for example, young male drivers who may persistently break the speed limit. But the point
is that the general message is applicable to all.
MARKET SEGMENTATION, STRATEGIES AND MARKETING MIX
The differences among NPOs that influence their view of marketing are also found in definitions of
their market, targets, aims or expectations etc. and these all points have to be mentioned in an organiza-
tion’s individual mission. So, we can easily say that it can be determined how the marketing concept is
applicable for NPOs.
Most NPOs executives agree that marketing is essential for their organizations to compete and survive
but just a few of them have a coomprehensive approach to marketing and have adopted this approach to
their organizations. So firstly, talk about the steps that would be driven to adopt the marketing approach
(Figure 2).
1. Step-Marketing Research: See the desires and demands of target audience, the role of competitors
in society and evaluate the opportunities and risks of market.
2. Step-Determining the Products and Offerings: Desighning the products/services and their of-
ferings to meet the expectations of market according to market research.
3. Step-Promote the Offerings: Create a relation between the organization and community by ad-
vertising, publications or special activities to highlight the target groups about the objectives and
offerings of the organizations.
4. Step-Evaluate Market: See the success of the organizations, the approach of target audiences’
respond to offerings and determine the new road map for organization.
Figure 2. Four steps for marketing approach adoptation
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Segmentation and Positioning
NPOs use the same criterias like POs for market segmentation as “Demographic, Geographical, Psycho-
graphical and Behaviorist Criterias”. However, they have to decide how to segment their markets and
which criterias will be used according to their own objectives. Let’s look these main 4 criterian mainly:
• Geographical Criterias refer to the locations of target markets as country, region, city, district
etc. The organizations should focus on one of these areas and the distinguished features of these
locations.
• Demographic Criterias refer to basic measures as age, gender, income, education, occupation,
nationality, etc. These all measures help to define the target markets and develop services and
offerings.
• Psychographical Criterias refer to state of mind variables as personality, lifestyle, perspective on
life, social roles, etc. which have a direct effect on terget audiences’ behaviours. These variables
can be test by the help of some specific tests.
• Behaviorist Criterias refer to target market segments in terms of how the audiences in each seg-
ment behave as consumer toward NPOs services and offerings, how frequently they benefit from
services or participate to activities, how loyal they are toward organization, etc.
Segmentation divides the target markets into groups that share demographic, psychographic or other
common traits. Each segment has distinctive needs and purchasing behaviors. So, after NPOs segment
their target markets, the executives see the opportunities and the risks of all these segmented markets.
At this point, the executives have to choose one of these three marketing strategies:
1. Undifferentiated marketing strategy focuses on entire target market rather than a segment. The
organizations adopts simple marketing mix-one product, one price, one placement and a single
promotional effort (4P)-and hopes that it will reach as many costomer as possible in target market.
2. Differentiated marketing strategy focus on different market segments with specific marketing
mixes designed especially to meet those segments’ needs. Each marketing mix includes a spesific
4P customized for target audiences in these segment.
3. Concentrated Marketing strategy is a strategy where a firm chooses to focus its marketing efforts
on one particular market segment. Marketing mix -4P- is developed for a very well defined and
specific segment of the consumer population.
Creating Marketing Mix
All organizations should constitute the marketing mix after determining their target markets according
to their structures and purposes. Achieving a stable distribution of produced goods, preventing shortages
or price increases or more simply just marketing of the products/services in any country is only possible
with the development of these marketing components. A NPO like any others should firstly constitute
the marketing mix by determining its target markets according to its structure and purposes. Market-
ing mix components such as product, price, promotion, and place decisions should also be determined
carefully in a NPO just like both public companies and private firms. Developing of the marketing mix
components by the organizations, it will become possible to achieve a stable distribution of produced
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goods and services in a country without causing any of shortages or increases at the prices. Thus, mar-
keting the products and services can be more successful and simpler. So in this part we will discuss on
marketing mix for NPOs.
Service Policy
Producing more than one product or service is an important feature distinguishing NPOs from for-profit
organizations. Therefore, NPOs must decide carefully on the issues such as product/service mix, proper-
ties of products/services, and life cycle of products/services.
A product mix is a number of product series and product units that a particular organization delivers
to its consumers. “Product series” means, a group of products in the product mix which are associated
with each other and they can be obtained for the same type of customers or they are marketable for the
same type of market place.
Services are produced in a heterogeneous way and they follow each other in a chain. P. Kotler’s
judgment that “services can be produced more than one type or number in a chain in the profit-making
organizations” is confirmed by the characteristics of the services that are not homogeneous. For example,
treatment, laboratory, emergency, medical education, rehabilitation and etc. are the services that are of-
fered together and dependent on and compatible with each other in the nonprofit hospitals.
A NPO should periodically review and evaluate its product mix. Its product mix determines the status
of the organization in the eyes of its consumers. NPOs must determine their costly products and try to
reduce their costs. If they cannot reduce, it will be more appropriate to remove them from the product mix.
There are three levels of a product that should be distinguished and determined in its development
process:
1. The Core Product: The core product answers the question of which needs are really met by the
product. For example, patients buy ‘hope’ whereas a hospital makes surgeries. A zoo introduces
animals, but the visitors buy ‘change’. What marketers must do is to find out the real needs that a
product can satisfy. Thus, it can be possible to determine the benefits of a product.
The most important feature of product decisions in nonprofit organizations is to make the decision
before establishing the company. So, this decision also generates the reason for establishing this business.
For example, it is a known fact that women in Turkey face with many problems as similar to the
women all around the world. While sometimes the problem is regional constraints, sometimes it can be
personal errors or just shortcomings. Recognizing this fact, coming together, deciding to spend time,
and sharing assets and experiences to solve this problem is a good example for a product decision. For
instance, organizations such as Turkish Women Empowerment Foundation, Turkish Philanthropic Fund
and Sabanci Foundation, and Women’s Solidarity Foundation are established and got their nonprofit
legal entities thanks to a product/service decision like this.
2. The Actual Product: It specifies how the product is seen or what a person would think of under
the generic banner of a product. There are five characteristics of the actual product:
a. Each product has also a unique presentation style. As an example, if we consider refugee
shelters that were built after the Syrian civil war in various cities of Turkey, variability of
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heating systems or preparing and presenting daily food for refugees can show the difference
between their styles.
b. Each product has its own specific characteristics. By these characteristics, it becomes easy to
differentiate the product from competitors’ ones. For example, a health care foundation can
improve the product’s features by extending the surgery hours for two days a week.
c. Each product has a certain level of quality. Level of used technology in an education program
intended for improving the management skills of the members of a trade chamber determines
the superiority of its servicing.
d. The product has a package. Package as a preservative tool can make a product or service
special. Good packaging makes the product look better. Package of a perfume is its bottle.
For example, a university campus environment is a package of all type of academic products.
Sports also belong to this product. Thus, development of a new closed sport complex nearby
the existing open one in the university environment or greening the campus environment are
the different types of packages for the academic products that make them more attractive.
e. Branding is a process of giving a name, term, sign or a symbol to distinguish a product from
competitors’ products in marketing. Branding adds value to an organization’s product and
increases satisfaction level of consumers. It gives confidence to volunteers. For example,
Foundation for Children with Leukaemia (LOSEV) is a well-known NPO brand in Turkey
for helping children with a type of cancer. People can donate their money confidently to this
foundation because of its well known brand.
3. The Augmented Product: The augmented product includes the core and actual products and of-
fers the additional values to the target consumers for increasing their satisfaction. In that respect,
an organization should add not only new characteristics but also supporting and auxiliary features
for developing augmented products. For example, by building an interactive web site, an NPO can
facilitate accessing to some of its services for disabled people in long distance and at the same
time volunteers also can get a better communication and may donate easily by developed payment
features of the website.
Another feature of these augmented products in NPOs is that some products or services are used to
support each other. This can both enhance the efficacy of products and also serve as a promotional ef-
ficiency function. For example, the aim of the Social Assistance and Solidarity Foundations is not only
to make financial aids but also to provide the opportunity of becoming qualified labour to their target
audience by organizing skill courses. Services provided here are supported with other services so that
their efficiency can be increased.
Legal regulations and restrictions are the major problems of NPOs. That is because, NPOs cannot be
in a position to produce services with the methods other than those specified in the laws, even though
it is impossible to make profit for them in line with their determined objectives. For example, industry
chambers can organize events such as panel discussions, seminars, and etc. to renew the professional
knowledge of their members. However, even if the offered services that are aiming to provide informa-
tion to its members and to develop their skills, it is prohibited by the laws to make advertisements for
these services.
Marketing of services is a new concept all around the world and thus especially problems associated
with product decisions in nonprofit service organizations have occurred in many countries such as Tur-
key in which the marketing concept has newly been accepted. Also legal regulations must be examined
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Figure 3. Product (service) life cycle
in this context. It is obvious that the primarily aim of the existing legal regulations is to protect and to
control the quality of the provided services, and the social balance. The point is that the people who are
establishing and managing the NPOs need to pay attention forming regulations that have more elastic
limits by disallowing the possible mistakes that the laws look suspiciously.
As is seen, a product is not something simple. On the contrary, it is a complex unit that meets an
essential need, has a series of properties, and provides additional benefits. NPOs must examine each of
their products separately and carefully. They should design them to be more attractive and different from
their possible competitors’ products and should provide the appropriate properties to their target audience.
Generally, product features and marketing policies cannot stay consistently at an optimal level. Major
variables of the macro environment (population, economy, politics, technology, etc.) and the other vari-
ables of the market (consumers, competitors, intermediaries, etc.) require some adjustments in product
and marketing strategies. These adjustments can be carried out by the way of product life cycle. There
are usually four stages in a product life cycle for every product or services in a marketplace (Figure 3):
1. Introduction Stage: Introduction stage occurs in cases where a new product is first launched to
the market. As it takes time to introduce the product to the market the development of sales is slow
at this stage. Delays in the expansion of production capacity, technological problems, delays at the
availability of the products due to delivery problems, and unwillingness of consumers to change
their behaviours can be considered as the reasons for the slow development of the introduction stage.
Because of the high distribution and promotion expenses and low acceptance level, the costs are
high at this stage. As the product is new and unknown at this stage, and needs to be introduced to
the consumers, promotion expenditures are at the highest levels. There are only a few competitors,
and organizations direct all their efforts to consumers that are ready to buy the product.
2. Growth Stage: If the new product manages to satisfy the market, sales will begin to increase
rapidly. Customers who try this product for the first time will continue to purchase it, and new
customers also begin to try. By the way, new competitors enter the market by seeing some of the
advantages and opportunities. So they also create differences on features, styles, and packaging of
their own products, and thus the market expands. During this stage, organization tries to extend
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this development process as much as possible. This can be achieved in various ways. The organiza-
tion may provide new models, improve the product quality, and add new features to the product.
Furthermore, they may conduct intensive studies to enter new market segments. They may also try
to explore new distribution channels. In addition, they may apply promotion activities to introduce
the new product and may convince their customers to purchase it.
3. Maturity Stage: Growth in the sales may continue for a while at the beginning of this stage because
of the potential demand has not used the product yet. Depending on the product and market char-
acteristics, this stage may be either short or long. Almost all competitors take place in the market
in this period. Therefore, promotional efforts for creating brand loyalty become important during
this stage.
4. Decline Stage: Finally, some of the products and brands enter the decline stage. According to the
characteristics of the organization or due to the product, the decline in sales may differ. It may be
slower or faster. Technical developments that lead the creation of a new class of product, model,
brand, etc., bring the decline in sales together with it. As long as sales continue to fall, some or-
ganizations begin to retreat to use their resources in a more attractive market. The rest tends to be
reducing their product numbers. So they also reduce their promotional expenditures.
Consequently, these four stages of the product life cycle represent the new market conditions and the
risks, and in every step it requires regulation of the target market and the marketing mix.
Pricing Policy
Always in private sector and usually in government sector, the status of the second degree interest
groups in the companies (workers and employees, government and public) against the pricing policy
and strategy of the company brings social responsibility to the managers in the pricing process. Even
though the scope and the nature of the social responsibility of the companies can be a debate topic, it is
an undeniable fact that individual policies and strategies of the firms can affect their current sectors and
especially the whole economy in the age of continued imperfect competition approximately in all sectors.
Hence, it is essential that the company managers must reach the consciousness of the social respon-
sibility of their company. An opposite behaviour may jeopardize the existence of the company and may
cause the deterioration of relations with the social environment.
Pricing is an important component of the marketing mix. Therefore, NPOs should think carefully
about what kind of pricing policy they must apply to meet the increasing costs without hindering their
production.
In all NPOs the basic rule in pricing is that the price should be sufficient to meet not only the costs
of the products or services but also the whole operating costs of the company. However, it should not be
missed out that in NPOs the terms like donations, grants, fees or dues may express the price also. For
example, Darüşşafaka Society accepts donations for sacrificial animals considering their situation of
meat stocks for the orphaned children in their schools. In order to determine the right price of a single
donation for a sacrificial animal, the organization must compute the whole organization costs very care-
fully. Because not only Darüşşafaka Society but also other NPOs organize this service as a product for
their volunteers especially in the Feast of Sacrifice period, volunteers have a few options to choose the
most affordable service for them.
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On the other hand, governments are all interested in pricing. For example, in the USA, Robinson
Patman law is a federal law passed in 1936 against price discrimination. This law prohibits possible
price discriminations of the producers and protects small retail shops against competition from the big
ones. Also according to Miller-Tydings law, manufacturers can create contracts with their distributors to
sell their products with a minimum price at which the goods could be sold. Because of these contracts
the distributers can force their retailers to sell the manufacturers’ branded products from a minimum
list price. Furthermore, companies working for public interest have to offer their prices or fees to price
control commissions.
There is a government intervention in market prices in various sectors such as medicine or heavy
industry. The pricing of agricultural and imported products is affected by both agricultural and customs
laws respectively. And also prices that sellers will determine can be affected by laws that adopted by
different units of governments.
NPOs have also problems related to pricing. The first issue to be handled is to answer the question
whether they should determine the prices or not. And the second one is to decide the price level if they
should do so. For example, fees which are some kind of prices that are determined by the general as-
semble in associations must be in acceptable limits. However, whether the prices should be closer to
the minimum or maximum is a frequently occurring problem in these NPOS that. The professional
organizations have always been in a constant dilemma about setting the prices or not for additional and
minor services that they have offered their members or other segments of society.
NPOs identify two types of prices for their services. The first one is the whole price of the services
offered directly to the target audience (such as fees, charges and stoppages), and the other one is the
prices for the services offered to non-target audience or for the services produced in order to get income
for the company (such as donations or deposits).
NPOs must take into account of behaviours and price sensitivity of the target audience while pric-
ing because of the objectives and the cash flow requirements of the company. It may be necessary to
determine prices as too low or free just because of business objectives. Also it is impossible for an NPO
to determine a price that is not accepted by its target audience.
According to Philip Kotler, organizations must proceed in three steps to set the complex components
of pricing. If organizations are aiming profit maximization, they should determine first their pricing
purposes, then their pricing strategy. As a last step they should determine that whether prices change or
not, and when it must be.
1. Pricing Objectives: While improving the pricing policy, the first step for organizations should be
deciding on their objectives. Sometimes, organization may have opposite purposes. So they must
choose one. At this point, four different pricing objectives can be specified:
a. Additional Revenue Maximization: It is thought that NPOs do not have an aim to get profit
or additional income but this is not always true. In many cases, an NPO has its own conditions
to determine prices to create additional income as more as possible. For example, charitable
foundations seek ways to generate additional income with meal organizations that their rev-
enues ought to be more than their costs. If a patented discovery is performed at a university,
it can be priced to get maximum revenue for the university.
b. Meeting the Costs: Many organizations try to determine a price to meet a reasonable portion
of their costs. Some of the NPOs adopt this idea. For example, they set some fees for their
public organizations such as concerts. Here, how much of the costs of the organization will be
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met with the price is the main issue. Some organizations aim to meet only the costs of their
main operations.
c. Market Size Maximization: Some organizations such as libraries and museums want to
maximize the number of customers using their services. These organizations think that they
provide benefits for their consumers and society with their services. In this case, they think
that zero price policy will attract more customers.
d. Intimidating the Market: In some cases, pricing policy may aim to avoid people buying a
specific product or services as much as possible. Sometimes it is because the product is harm-
ful for them, and sometimes it is just for preventing the excess tax payment of the people for
a product, or they also may try this only to reduce the consumption rate of something, which
is scarce. For example, most NPOs make pressure to the governments for increasing excise
duties on cigarettes, so people’s smoking rate can be reduced.
2. Pricing Strategies: An organization may consider appropriate pricing strategy after determining
the pricing objective. Pricing strategies fall into three categories as follows:
a. Cost Based Pricing Strategy: At the cost based pricing strategy, both total marginal costs
and general expenses are taken into consideration while pricing. Price is determined by add-
ing a certain profit to a unit cost. In some cases, profit margin is determined for each product
separately. For example, museums open souvenir shops and also they add a separate profit
margin for each product.
NPOs may vary in pricing by arguing their costs. For example, a blood bank may also include
all the costs of blood obtaining and distributing activities in to its prices. On the other hand,
some organizations may set a price less than their costs. Tuition fees and concert ticket rev-
enues of the private universities meet less than 50% of their total cost. Their remaining costs
are met by donations or grants.
The most common expression of the cost based pricing strategy is the “break-even point
(BEP)”. The purpose of BEP analysis is to determine how many units of product must be
sold to fulfil the total cost at any price level.
This pricing method is the most commonly used system for many reasons. Firstly, there is
less uncertainty in costs compared with demand-based pricing strategy. Sellers would have
facilitated pricing by associating the price with the costs. Thereby, there is no need to adjust
prices frequently if the demand changes. Especially industrial organizations use this approach.
If their costs and profit margins are close to each other, their prices will also be close to each
other. Therefore, the price competition would have been minimized. A pricing which includes
a certain profit rate will also be socially more equitable for both consumers and sellers.
b. Demand Based Pricing Strategy: Demand based pricing strategy is more related to demand
status rather than the cost level while determining the price. Retailers set the price accord-
ing to their estimation on the value of their products which are purchased by the buyers. The
essential point here is whether it reflects the real value of the prices formed in consumers’
mind or not. If an organization wants to implement a higher price, the value created for the
consumer should be formed in a good way. Thus, if an NPO provides an excellent service
which is demanded more than the other NPOs, it will also set a higher price than the others.
c. Competition Based Pricing Strategy: If an organization sets its prices according to its com-
petitors, then this pricing policy is defined as competition based. Organizations can apply its
prices in three ways if it is compared with others. The prices can be the same as competitors’
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ones, higher than or lower than them. Organizations unwillingness to maintain a solid rela-
tionship between price, cost and demand is the distinctive feature of this strategy. The costs
or demand of an organization may change. However, if its competitors maintain their prices,
then organization will continue with its prices, too. Contrarily, the organization will change
its prices if its competitors change theirs even if costs and demand do not.
3. Price Change: When the organizations consider changing their prices, this will also affect their
buyers, competitors, distributors and etc. even if prices have been increased or decreased. At the
same time this will also stimulate the government’s interest. Depending on how these groups respond
to the organization, price change process can be successful or not. It is so difficult to predict the
reactions of the consumers. So sometimes price can only be determined by way of price elasticity.
Distribution Policy and Physical Distribution
Every organization should consider either how to deliver its finished goods and services to its target
customers or how they can get them easily. Marketers name this event in the marketing mix with the
terms “place or distribution decisions”. Distribution decision is an important variable in NPOs’ market-
ing mix as in private or government ones.
Every organization should consider how their goods and services may easily be accessible or obtained
by its consumers. A multi-channel delivery system is undoubtedly necessary for providing the desired
quality of services.
For example, in an NPO which aimed to solve the health problems of homeless people, not only diag-
nosis and treatment, but also preventive medicine, emergency department, outpatient treatment services
and laboratory services must be provided within the scope of an effective health care service. In addi-
tion, health booths in districts, infirmaries in public shelters, service delivery units such as ambulances
located outside the town centre are required in order to increase efficiency. Each unit is located in the
health care system or each officer on duty constitutes a branch of the distribution channel. Therefore,
volunteers play a key role in the service delivery operations in NPOS. Managers of the NPOs must be
careful about service delivery. The service which has an excellent quality, place and time of presentation
may become completely useless due to carelessness or featurelessness of a service delivery.
Profit-making organizations provide goods and services in line with the possibilities, and demands
of their customers. NPOs which are aimed to give health care or education services for both destitute
and the other members in a society may have a principle. They may deliver services between all people
equally irrespective of what financial situations citizens have. Therefore, NPOs should firstly establish
the distribution objects, secondly decide to make direct or indirect distribution, and finally use selective
or intensive distribution as appropriate. Also they should select the region to offer their services and
then put the program into practice. Creating a distribution system in NPOs includes two main functions.
It must include either suppliers or customers. So it must be organized both backward and forward. Dis-
tribution channels are usually simple and short in that agent are not used. However, if an agent is used,
then it will be a proxy agent. For example, a political party or a university may assign a “fundraising
institution” from outside, which is expected to bring about higher number of participants. Furthermore,
entrance tickets of an opera or an athletic contest can be sold by an independent agency as it is aimed
to reach more potential customers. Even if they have no ownership or responsibility, these seller agents
usually have roles in favour of NPOs.
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The distribution channels in NPOs are usually short. The main reason for this is the uselessness of
keeping services or ideas ready for producing and delivering. Thus, delivery problems in services are
not because of the length of the process and their difficulties, it is because of shortness of time. There
are some reasons for this problem. It is unable to store services, and also services are produced and
consumed during the same time.
It is a well known fact that the main objective of marketing is to make profit while meeting needs
of consumers. On the other hand, the profit of an NPO is reaching its purposes. So, the profit of NPOs
is primarily providing either mass or social benefits by meeting needs of their target audiences. Either
inability of delivering services or delivering them in a non-effective manner are both in contrast to the
marketing approach and the purposes of NPOs. Therefore, shortcomings and deficiencies in the qual-
ity, price and promotion are not as important as distribution of the services in the services marketing
process of NPOs. Different from other marketing mix components, deficiencies and inadequacies in the
distribution process will cause more failure while satisfying the requirements of the customers.
The main objective of physical distribution for an NPO is to determine its own best place to serve
more effectively for its associates and customers. The organization should access to their associates as
much as possible. Therefore, if an NPO needs to get more money to achieve its aims, it must provide
more suitable payment ways for its customers. For example, they should allow their customers to pay
by checks, credit cards or instalment plans. The place and the region are also very important in the re-
lationship marketing of NPOs. Therefore, NPOs may establish a number of branches around the cities
or provinces. For example, health organizations may create mobile units for lung X-rays, blood pressure
tests and vaccinations. Libraries may also establish branches in shopping centres and they may use large
trucks to create mobile branches reaching the people in the other cities.
The problems faced by an NPO while organizing an efficient distribution design are listed below:
1. One of the first decisions of the marketing managers is to decide the level and quality of offered
services to the target markets. Each organization can visualize the maximum quality of services that
can be provided. For example, a library can give its books to people to take home for a few hours.
And also a health department of an NPO can send doctors to patients’ homes. These types of solu-
tions are intended to provide maximum convenience for consumers. However, these ways cannot
be always practical or possible. Because of high level of costs, consumers may not always want
to get extra convenience. NPOs may find solutions including services that offer less convenience
for consumers. In this way, while providing services, they can also reduce their distribution costs.
They can do this by offering the transport costs of extra wanted services for their consumers.
2. The second problem of the organization is to determine the number and the settlements of these
branches in relation to the settlements of the final consumers.
3. The third problem is the design of this facility in such a way that will contribute to satisfaction level
of the consumers and employees. Current status indicates that an intelligent design is necessary to
create a healthy and pleasant environment for consumers. So, target audience may feel safer and
better in a good environment.
4. Developing a starting point for services, organizations set up their own branches and/or make deals
with agents. Agents are specialized persons or institutions to fulfil buying or selling processes.
Well-known types of the agents are wholesalers, retailers and brokers. There are several reasons
why an organization must use an agent. Because of its advantages, using an agent is very common.
For example, many organizations are devoid of financial resources necessary to carry out direct
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marketing. Even if NPOs may have capital to create their own distribution channels, they cannot
do it as cheaper as an agent which has an existing distribution system for an ultimate market, and
is specialized only for this job. The case of using agent depends on the excess of events when the
marketing tasks and functions are fulfilling. Due to their experience, expertise and developed
relationship networks, usually marketing agents can offer the products and services better than an
organization, which is producing them.
An organization needs to make also other decisions when deciding to use agents. NPOs must always
motivate its agent and inform them about the aim of the services in order to be successful. NPOs must
establish a sustainable win-win relationship and also must control the process sales processes of their
agents continuously.
Promotion Policy and Marketing Communication
All organizations are closely related with the communication and promotion activities. These activities
are known as the fourth variable of the marketing mix. Organizations should inform their various markets
and target groups about their activities.
Every organization should examine their communication style, needs and opportunities very care-
fully. Every organization has a unique structure, and thus they should develop a communication strategy
that must be convenient, efficient and less costly for them. This communication strategy must be clearly
defined and can explain how the communication activities will play role in the whole marketing program.
It is a fact that personal and non-personal communication plays a central role in social behaviour pro-
grams. On the other hand, communication activities are also performed to organize other components of
marketing mix such as distribution and pricing. A NPO must determine the structure of the tasks that will
be done to fulfil their communication activities before creating an efficient and minimum costly program
in every situation. Communications that are built should be directly oriented to the target group. The main
purposes of these activities are to inform the target customers about the changes in the marketplace, or
to promote a product or a service, or to attract members and their donations. Communication activities
must firstly identify target groups which are generally may be anyone who is interested in services of a
NPO. They may also be continuous users or decision makers or only the effectors.
Target groups may contain a particular group, or groups, contacts, or just may be the public itself.
Target groups will affect the communication decisions about when, how, where and what a marketer
should do.
Communication responsibilities of NPOs are more than informing their target groups. These orga-
nizations should also effectively inform the other groups outside such as public institutions financial
institutions, and the press. In this way, in these communication activities an NPO should also inform its
domestic environment such as its members, agents and its professional or unskilled volunteer workers
(Figure 4).
There are a quite number of promotion tools which must be classified to simplify the analysing and
planning processes. They can be divided into four:
1. Advertisement: It includes the publicity and promotion activities of products and services by a
certain advertising firm.
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Figure 4. Communication tools
2. Sales Promotion: They are short-term impulsive activities made in order to promote the purchase
of a certain product or service.
3. Personal Selling: It is the promotion process occurred in order to make sales with one or more
number of prospective buyers by mutual negotiations.
4. Public Relations: They are non-personal promotional activities of the commercially important news
about the demand for a product, service or an economic activity. They are made by using appropri-
ate publications such as radio, television and the other media organs in a broadcast environment.
Advertising activities has become crucial in an increasing speed for also NPOs today as in private or
government organizations. But NPOs are absolutely avoided of spending money for any type of adver-
tising. Therefore, NPOs need support of other advertising firms or volunteers to make these advertising
activities for free. NPOs use advertisements especially to reach their donation market.
NPOs frequently use advertisement environments such as TV and radio channels, newspapers and
journals to reach more donations and to get more financial capital support. These organizations can also
use advertising to communicate with their target audience. For example, some churches can do aggressive
advertisings from printed media, TV or radio to improve their memberships and sustainability. Also in
Turkey, NPOs such as Turkish Armed Forces Foundation or Turkish Aeronautical Association often do
the calls using through a variety of media.
In some cases, an NPO can reach both its participants and its customer market with the same adver-
tisement. For example, associations such as Turkish Heart Association, Turkish Cancer Society or Lung
Association can do advertisements inviting people to make donations for their annual campaigns. They
insistently give the message that people should quit smoking, make diet, or make regular check-ups by
the same advertising.
Marketing manager must decide on several topics to develop an advertising program:
• Advertising Objectives: First of all, an NPO should determine the aim and objectives of an ad-
vertisement before developing its program and the budget. These objectives must come from the
decisions of target market, market situation and marketing mix. The decision must definitely be
consistent with them.
• Determining the Advertising Budget: How much money must be allocated from the budget for
different market segments, geographical regions and time periods must be determined to accom-
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plish the advertising budget. Practically, advertising budget is allocated depending on the demand
situation in the market segment. But NPOs cannot spend money for advertising. Therefore, they
try to deal with an advertising company to conduct the advertising activities for free.
• Message Development: Following the two stages above, managers should develop a creative
message. Ideally, a message must draw consumers’ attention to organizations services or messages
inspiring their desires. Therefore, consumers can get a buying behaviour.
• Media Selection: Media selection is another major step of the advertising planning. Media stud-
ies must be made before the message development period. These studies include determination of
media and their costs. Media planners make their media selections by considering media habits of
the target groups and the variables such as products, messages and costs. They should decide how
they will allocate the given budget to the main media according to these features. Afterwards, the
specific media tools and the timing should be determined according to the characteristics of the
target group.
• Advertising Rating: The last stage of an effective advertising planning is advertising rating.
The most important elements of advertising ratings are the sample testing, media testing and cost
amount testing.
NPOs may use sales promotion in reaching markets. Many organizations’ donation boxes are avail-
able in the shopping malls and sport events. And also brochures, films, competitions and catalogues
can be effective sales promotion tools for NPOs. Generally sales promotion tools can be divided into
subgroups as listed below:
1. Consumer Promotion Tools: Such as samples, coupons, rebates, discounts, gifts, contests, dem-
onstrations, and etc.
2. Seller Promotion Tools: Such as independent products, production permit, and etc.
3. Sales Force Promotion Tools: Such as bonuses, competitions, sales meetings, and etc.
Public Relations (PR) is a function fulfilling a series of operation which are well-established and are
necessary for the organization in the private sector and in NPOs. Sometimes NPOs accept all community
as their target audience. In this case, the importance of PR is emerging. PR has a comprehensive mission
area. So, promotion activities have performed by the PR department in many NPO.
While NPOs are trying to attract the attention of their targeted specific groups in order to achieve
their main missions, they may also attract the attention of some other groups inevitably. Therefore, they
really need a PR manager to inform also these other groups about their activities to enlarge their targeted
groups. A PR management unite can add several advantages to an organization such as a better forecast-
ing of the potential problems, a better handling of these problems, consistency between the policies and
strategies, and providing a more professional written and oral communication.
PR is also a management function assessing the attitude of the people, and defining policies and
operations of a person or an organization, and developing a program to learn understanding and the
acceptance of the public. Management essentially sees PR as a communication tool which helps to im-
prove marketing objectives of the organization. The most common media and tools of PR are writing
Instruments (annual reports, catalogues, workers’ journals, and etc.), audiovisual materials (films, slides,
tapes and etc.), mass promotion media (slogans, brochures, symbol, business cards, stationery, and etc.),
news, events, orations, and phone communications.
177

On the other hand, the importance of personal communication cannot be ignored whether as in the
framework of PR or as independently. Personal communication is an indispensable element for the
realization of the objectives of organization at the highest level. The person who will install the com-
munication must have some basic characteristics regarding personal communication. A communication
person comes face to face with consumers at the optimum level. He/she must comply with the rules
of politeness and courtesy whatever his/her mission is. They must be aware of the responsibility about
the consumers and the company. These qualities may help getting the highest benefit from the offered
services and also may increase consumer satisfaction of NPOs.
Personal communication methods can be divided into five groups. These are; using a single staff
as an individual to communicate with consumers, using a single staff to communicate with consumer
groups, using a group of staff to communicate with the consumer groups, and finally using an expert
group to communicate with the consumer groups.
The biggest advantage of the personal selling is being of a promotion tool that provides face to face
conversation with the potential users or donors. This situation allows a sales representative forwarding
the appropriate message to appeal certain customers’ attentions. A representative can convince people
more easily to donate, and can sell them products or services by informing them broadly about products
and services using bilateral interviews. If these talks are periodic, then the personal relationships can
be more strengthened.
However sometimes sales representatives can cause some kind of management problems for a NPO.
Actually, an organization should program the supplying, educating, pricing, managing and evaluating the
performance of its sales force. Unfortunately, many organizations do not show sensitivity on this subject.
It is crystal clear that NPOs in Turkey such as Red Crescent, Child Protection Agency or Turkish
Aeronautical Association need to be promoted. It is required to make a very well planned promotion
programme by using mass media tools to keep alive society’s positive attitude and to provide financial
support towards these institutions. NPOs are using advertising, personal selling and sales promotion
tools most of the time aggressively and effectively to communicate with their customers and also with
associates in a free way by not paying for them. These organizations have a problem of not combining
their promotion mix components with their total marketing program. Unfortunately, many NPOs have
believed that the promotion and the marketing are the same things up until now. But it is gladsomely seen
that this idea is rapidly changing, and management departments of NPOs are becoming more conscious.
RECOMMENDATION
“Social needs” which create social value and opportunities for people to have active role in society, ef-
fect the people’s life cycle directly. So especially in recent years satisfying social needs become crucial
as well as satisfying physical goods and services needs. In this sense, the NPOs which provide to meet
social needs (values, ideas, etc.) get a higher position as physical goods producer profit ogranizations. So
marketing which just focused on producing physical goods and services has gained an important mean-
ing also for NPOs whose first aim is to solve social problems and creat social benefit to be sustaineble
organisation. Thus, these NPOs should also vreate and implement a successful marketing concept. To
implement a successful marketing strategies, the managements of NPOs should be aware of the demand
and needs of these target groups and recognize the distinctive features of their products for them. When
we focus on NPOs products, we see that these products are related to ideas and services contains social
178

needs and behavioral reasons differently from physical product and it is not easy to connect these invis-
ible products to costomers and persuade them to participate in these organisations. However, NPOs are
still lack of understanding of what the principles of marketing are and largely focus their efforts on just
sales and promotional activities rather than establishing a strategic marketing road map. So, this part of
the book, devoted to understanding marketing importance and relevance for NPOs, explains the roles and
steps that should be driven to adopt the marketing approach to them. As a first step, the NPOs should
focus on marketing research to see the desires and demands of target audience, to decide how to segment
their markets and which criterias will be used according to their own objectives. After NPOs segment
their target markets, the executives see the opportunities and should choose the best marketing strategies
accoding to segmentation. And the role of competitors in society and evaluate the opportunities and risks
of market is also important for the first step of road map. As second step NPOs should determine the
products/services and their offerings to meet the expectations of targets according to market research.
They should be carefully on the issues such as product/service mix, levels of improvements, properties
and their life cycle. Also, while improving the pricing policy, these organizations should be deciding on
their objectives and the price should be sufficient to meet not only the costs of the products or services
but also the whole operating costs of the company. The market size maximization is also important in
pricing policies. As a third step, NPOs should create a good relationship between the organization and
community by marketing communication tools. They should determine the structure of the tasks that will
be done to fulfill their communication activities as advertising, publications or special activities before
creating an efficient and minimum costly program to highlight the target groups about the objectives
and offerings of the organizations, to promote a product/service, and to attract members and donations.
During these communication activities, NPOs should focus on advertising objectives and budget, desired
message development, media selection and advertising ratings. As the last step of marketing adoptation
for NPOs, evaluating market activities should be implemented to see the success of the organizations,
the approach of target audiences’ response to offerings and determine the new road map for organization.
CONCLUSION
The NPOs which provide social benefit and welfare have enhanced their importance for our life no fewer
than physical goods producer ogranizations. So, marketing which just focused on producing physical
goods and services, has gained an important meaning also for NPOs to build a strong connective bridge
between them and their target groups as key stakeholders, supporters, and customers to provide optimum
benefit for each side. As a consequence, NPOs should be faster in accepting the impotance of marketing
to achieve their mission and adopting marketing strategies and techniques to create worldwide effect
with successful brands like many good examples of NPOs. To be more focused on marketing mix will
bring the sustainable success.
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KEY TERMS AND DEFINITIONS
Darüşşafaka Society: The name of one of NPOs in Turkey.

Marketing Concept: is the philosophy that firms should analyse the needs of their customers’ stated
and unstated needs then take decisions to satisfy those needs, better than the competitiors.
Product Series: A group of products in the product mix which are associated with each other and they
can be obtained for the same type of customers or they are marketable for the same type of market place.
Social Needs: The needs that create social value and opportunities for people to have active and
effective role in society.
Sustainability: The balance or harmony between economic sustainability, social sustainability and
environmental sustainability.
181
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Marketing Approach for Non-Proﬁt Organizations

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• According to subparagraph(3): Religious, educational, charitable, scientific, or literary organiza-

THE IMPORTANCE OF MARKETING IN NONPROFIT ORGANIZATIONS

DISTINCTIVE FEATURES OF MARKETING FOR NPOs

Product/Prodcut Concept for Nonprofit Organization

Figure 1. Customer groups of NPOs

Financial Sustainability for NPOs

Regardless of an organization’s for-profit or nonprofit status, the challenges of establishing financial

Management Differences for NPOs

The Approach of Government to NPOs

Recent Marketing Approach by NPOs

MARKET SEGMENTATION, STRATEGIES AND MARKETING MIX

Figure 2. Four steps for marketing approach adoptation

Segmentation and Positioning

Creating Marketing Mix

Figure 3. Product (service) life cycle

Distribution Policy and Physical Distribution

Promotion Policy and Marketing Communication

Figure 4. Communication tools

KEY TERMS AND DEFINITIONS

Darüşşafaka Society: The name of one of NPOs in Turkey.

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