Not-For-Profit and Public Sector Marketing - Essay Example

? Not for profit and public sector marketing – the case of Oxfam Table of contents Introduction 3 2. Marketing strategy of Oxfam 3 2 Overview ofthe problem 3 2.2 P.R. planning model for Oxfam 4 3. Medium term communications plan 6 4. Charities - the use of marketing as a fundraising vehicle 7 5. Conclusion 12 References 1. Introduction The expansion of recession from 2007 onwards has caused severe financial turbulences to all markets worldwide. In Britain also, the effects of the crisis have been made clear to businesses operating in all market sectors. The specific crisis has also affected the charities and the non-profits organizations; the above organizations had to update their strategies, including their marketing campaigns, in order to survive and to stabilize their performance. However, there have been business sectors on which the effects of the crisis have been quite severe. The secondhand bookselling is one of these sectors. The firms operating in this sector have suffered severe losses because of the recession; many of these businesses had to terminate their operation. These turbulences have led to the development of conflicts regarding the actual causes of the negative performance of the sector’s businesses. Oxfam has been blamed as being partially responsible for the crisis in the particular sector. The marketing strategies of the organization have been negatively criticized as threatening the businesses operating in this sector. Explanations are given on the marketing practices of the organization and their potential effects on the operations of the businesses in the secondhand bookselling industry. 2. Marketing strategy of Oxfam 2.1 Overview of the problem Oxfam is the most known non-profit organization of Britain. The specific charity serves various social needs; the relevant funds are gathered through extensive fundraising schemes promoted by appropriately customized marketing techniques. Certain entrepreneurs have negatively criticized the marketing plans used by Oxfam. The problem under examination is the involvement of Oxfam in the selling of second-hand books. British booksellers – especially those dealing with the selling of second-hand books, have made complaints for the charity’s involvement in their business sector. Marc Harrison, a bookseller in Salisbury, had to close his bookshop due to the continuous decrease of profits; Mr. Harrison blames Oxfam for the damage he suffered (Riddle 2009). The accusations of Mr. Harrison are based on the fact that Oxfam has entered in the bookshop retail establishing its bookshops across UK. In accordance with Thomson (2009) the activities of charities can, indeed, threaten retailers, taking into consideration the fact that charities have a series of advantages – referring to the lack of financial obligations, like tax, payroll and so on. Kimmelman (2009) has stated similar concerns regarding the power of Oxfam to dominate the British secondhand bookselling industry (Kimmelman 2009). Kimmelman refers to the case of Harrison in order to highlight the practical implications of the entrance of Oxfam in the particular sector. It is noted that secondhand booksellers do not have many chances to win Oxfam (2009). The above organization has the financial power in order to support a nation-wide marketing campaign achieving a continuous increase of its profits. In the case of the above charity, marketing has been proved to have a critical role in the organization’s expansion in the particular industry. The marketing practices of the firm can be evaluated using an appropriately customized P.R. planning model, which will contain a series of proposals which can be actioned immediately – having being checked in order to be SMART. 2.2 P.R. planning model for Oxfam The marketing choices of Oxfam should be explained by using an appropriately customized P.R. planning model. The Six Points P.R. Planning model of Jefkins (1994) has been chosen in order to explain the scope of P.R. policies used by Oxfam. The SWOT analysis will be also employed in order to explain the organization’s internal environment – revealing the challenges that the organization has to face in its external environment. In the context of the model of Jefkins (1994), the organization’s P.R. model should emphasize on the following six issues: ‘a) Situation analysis; b) Defining Objectives, c) Defining Publics, d) Media Selection, e) the Budget, f) Implementation and Control’ (Baines et al. 2004, p.91). a) Situation Analysis: the organization is a charity; its position in the British market is quite important, however, its needs are quite extensive – taking into consideration the range of its activities (see the organization’s website). SWOT analysis; the specific analysis should be used for highlighting the firm’s internal environment – as it can affect the organization’s situation: a1) strengths: well known in Britain, operating for many years, trust of people, a2) weaknesses: lack of sufficient personnel – compared to the volume of work, a3) opportunities: further development through the Olympics and other similar events, the sector’s income seems to be kept at high level, despite the crisis, the global presence of the firm would create opportunities for increase of income through the global market, a4) threats: increase of competition in the charity sector, potential limitation of donations if the crisis continue b) Objectives: to help resolving problems related to poverty – including education, health, gender inequality and human needs caused because of natural disasters (Oxfam UK, 2011) c) Public: people across Britain; the organization belongs to Oxfam international, which cover various social needs worldwide d) Media selection: media of all types and the press have been periodically used for promoting the organization’s messages; the organization has its own press office through which the cost of a marketing campaign is limited. e) Budget: the organization’s available budget for marketing is not standardized – being depended on its monthly income; it is assumed that a marketing plan of ?10,000-?15,000 could be disposed by the organization for the development of its marketing plans. f) Implementation and control; the organization’s marketing campaign are implemented and controlled by the organization’s relevant department (see organization’s website 2011); potential voluntary support may also involve in the particular activity; the organization’s marketing plan can be developed independently, meaning that there are appropriately skilled employees/ volunteers who can effectively execute such tasks. The above plan is SMART, meaning that is ‘specific, measurable, achievable, resourced and time bound’ 3. Medium term communications plan The marketing plan of the organization could be possibly alternated; changes could be made on the promotional strategies used for the organization’s activities – including the selling of second hand books. A medium term communications plan would be preferred offering the following advantage: the performance of the plan could be reviewed periodically; after the end of the plan, its overall performance could be evaluated and decisions could be made on the potential further update of the organization’s marketing policies. The communications planning framework of Chris Fill has been used as the basis for updating the marketing plan of Oxfam. Using the above model, the organization’s marketing plan would be structured as follows: Graph 1 - Communications planning framework for Oxfam 4. Charities - the use of marketing as a fundraising vehicle When used by charities, marketing strategies have a different scope, if being compared to the marketing plans adopted by commercial enterprises. More specifically, in non-profit organizations marketing aims to serve the needs of people with specific social or health problems, not to contribute in the accumulation of profits by one or more persons. In other words, in charities, marketing serves the needs of the society while in commerce marketing is pearly related to the increase of profits of the business owner/ shareholders. The above issue is highlighted in the study of Varey (2001) where reference is made to the social marketing, a form of marketing aiming to contribute in the resolution of a series of social problems (Varey 2001). From this point of view, the use of marketing as a fundraising vehicle should be characterized as justified. However, the terms under which charities are involved in marketing activities should be carefully examined; under certain terms, the social needs which marketing is asked to serve – as part of the strategy of a specific charity – may come in opposition with the interests of particular groups of professionals, as in the case under examination. On the other hand, such implication would also occur in case that marketing would be used in the context of commerce – for example, the marketing of a large retail enterprise could be against the interests of small retailers; the latter could not ask for the prohibition of the use of marketing by the large retail enterprise, since that would violate the rights of its owner/ owners. Of course, a charity should not be considered a similar case with a large enterprise. The above example is mentioned in order to make clear that the right to use marketing exists primarily to all people – when they need to promote a product/ service. In the context of social needs, marketing would be also available – in fact, its use would be more justified compared to social purposes. Under these terms, when having to evaluate the appropriateness or not of marketing as a tool for supporting the activities of non-profit organizations, emphasis should be given on the following issues: a) are the marketing techniques used absolutely necessary for the needs served? b) Could other plans be used instead for serving these needs? c) Which would be the limit up to which the marketing plans of charities could be developed? Would any ethical borders exist? In order to respond to these questions it is necessary to refer to the form of marketing commonly used in charities. Also, reference should be made to other marketing tools potentially available for social purposes. One of the most common forms of marketing used in non-profit organizations is the cause marketing; the above form of marketing emphasizes on ‘partnership – purpose – passion – profits’ (Daw 2006, p.23), with profits to be at the top of the 4P’s hierarchy. Cause marketing is preferred in the promotion of activities which are related to social needs, mostly because of the following reasons: a) ‘it brings together businesses and non-profits organizations’ (Daw 2006, p.23), b) it leads to the increase of benefits for the non-profit organizations, i.e. to the increase of their potential to serve the social needs involved; other marketing schemes of similar scope, for instance the sponsorship, would not help to the achievement of this target, serving only specific needs, c) because of its close relationship to both the business and the non-profit organization, the cause- marketing increases the passion for achieving the targets set (meaning that the involvement in activities which are related to business can be extensive aiming to support more effectively those who are benefited by the non-profit organization’s activities), d) due to the increase of involvement in business-related activities, profits can be significantly increased through a cause – marketing plan (Daw 2006, p.23). Because of its effectiveness, cause marketing is preferred by non-profits, for instance, the example of Breast Cancer Awareness, a non-profit organization that has been given an award for its cause marketing campaign (Newell 2010). Adkins (1999) note that the cause-related marketing is also known with different names, such as ‘social marketing, charity marketing or public purpose marketing’ (Adkins 1999, p.9-10). It is explained that cause related marketing is the form of marketing based on a particular cause – a term used for referring to ‘good causes, i.e. the causes of charities and other non-profit organizations’ (Adkins 1999, p.10). It is also made clear that the forms of cause-related marketing can vary – in accordance with the advertising method chosen, the resources available and the target market. In this context, marketing schemes, like ‘sponsorships, direct mail and advertising’ (Adkins 1999, p.10) are incorporated in the cause – related marketing. In other words, the cause related marketing, which is the marketing used by all charities and non-profit organizations, is quite broad, referring to areas and activities that are usually related to the traditional marketing, i.e. the marketing plans developed for the promotion of commercial products/ services. Apart from the cause related marketing, other forms of marketing – which are normally used in commerce – are likely to be used by charities. An indicative example is the relationship marketing. The specific type of marketing has been aims ‘to establish, maintain and enhance relationships with customers and other partners at a profit so that objectives of the partners involved are met’ (Groonroos, 1994, p.9 in Kitchen, 1999, p.406). It is clear from the above definition that the relationship marketing is based on a more business-related view of achieving objectives, meaning that in this type of marketing, profits are set in the top of the organization’s priorities, giving the sense that the above target is the key target of the organization involved. At this point, an important problem can appear: in case that a charity adopts the specific type of marketing – a common practice, actually – it is possible that concerns are developed regarding the priorities of the charity, i.e. the targets on which the particular marketing campaign has been based. This seems to be the main cause of the problem in the case of Oxfam. The firm has used a series of marketing strategies, which are available to both profit and non-profit organizations, but this fact has led to doubts regarding its aims. However, the use of these marketing strategies by Oxfam has been unavoidable, in order for funds to be gathered for the achievement of the organization’s aims. The scope of such activity can be understood through the study of Beamish et al. (2007); the above researchers note that ‘the key role of any charity therefore has to be to generate income in order to achieve the aims and objectives defined by the board’ (Beamish et al. 2007, p.253). Therefore, the use of marketing campaigns for the increase of the charity’s income is considered as an activity fully justified, taking into consideration the pressures in the market – in terms of competition – but also the decrease in the donations, as a consequence of the limitation of income of buyers and the increase of the prices of goods/ services. In other words, even if the marketing used by Oxfam can be negatively criticized as being opposed with the business interests of specific groups of persons, the following issues should be taken into consideration: a) the firm has used marketing plans which are commonly used by charities worldwide; there has been no differentiation in the marketing campaign of the organization compared to the marketing practices of other organizations that have similar scope; the specific fact can be made clear by reviewing the content/ parts of the marketing strategies commonly used by charities and non-profits organizations, as presented above – referring to the cause related marketing and the relationship marketing; from this point of view, the choices of the organization in terms of marketing cannot be negatively criticized as being within the context of its rights, b) the charity has certain obligations towards the people who supports; the achievement of its aims is the charity’s key priority, as also highlighted in the literature; this means that the charity has to use any available tool, as defined by the market’s ethics and practice, in order to achieve its aims, i.e. to serve the needs of the people depended on the charity, c) the marketing practices to which the complaints refer can be characterized today as out – of – date, being related to activities which are already developed, without having prospect for further expansion. This means that the charity has already entered the bookselling sector, its bookshops have been established and are already known to the public. Opposing a marketing strategy involving an activity, which has been developed for a rather long period of time without concerns or oppositions, denotes that the complaint is related not to the activity itself but to its expansion. More specifically, despite the fact that selling the objects given by people across Britain, has been a common practice of Oxfam since the organization’s establishment. For years, the specific practice had not raise any concerns, at the level that it was limited, in terms of the space in which the relevant transaction took place. The problem seems to be related to the establishment of the Oxfam bookshops, a decision that has been unavoidable because of the volume of the books donated; d) The recession has led to the limitation of the income of people in Britain – as also in most countries worldwide; donations have been also declined, even if their level can be still characterized as satisfactory; introducing strategies that can help to keep the income of the charity at a standard level is, therefore, absolute necessary, taking into consideration the increased social needs to which Oxfam has to respond, e) the proposed Communications plan could help to reduce the potential effects of the organization’s marketing campaign on the performance of booksellers. 5. Conclusion The development of marketing strategies of Oxfam has been related to the current social and economic conditions, as explained above. The organization has always tried to keep its activities within a particular path: the achievement of profits at a particular level so that the aims of the organization are achieved. In the context of the recession, the decrease of profits in all business activities, has normally led to the increase of competition. The booksellers who have been felt threatened by the marketing practices of Oxfam should re-consider their view, taking into consideration the following facts: Oxfam has not differentiated its activities nor its marketing campaigns – the organization always used marketing for gathering the funds required for the social needs covered by the organization; moreover, the organization has been always based on the selling of the objects donated for gathering funds; furthermore, the marketing practices used by Oxfam are those used by all charities and non-profits organizations worldwide (as explained above); also, even if Oxfam would not have established bookshops, still, the pressures on the market would be the same. The development of existing facilities and existing marketing practices in order to respond to the increased social needs should not be regarded as an effort to violate competition but rather to keep the level of the organization’s income standardized – which is absolutely necessary so that the organization to keep responding to the needs of people at the same level. References Adkins, S. 1999. Cause related marketing: who cares wins. Oxford: Butterworth-Heinemann Baines, P., Egan, J., Jefkins, F. 2004. Public relations: contemporary issues and techniques. Oxford: Butterworth-Heinemann Beamish, K., Ashford, R. 2007. Marketing planning, 2007-2008. Oxford: Butterworth-Heinemann Daw, J. 2006. Cause-marketing for nonprofits: partner for purpose, passion, and profits. Hoboken: John Wiley and Sons Kimmelman, Michael. Beleaguered Bookseller Knows Whom to Blame: Oxfam. 2 September 2009. The New York Times. Available from Kitchen, P. 1999. Marketing communications: principles and practice. Cengage Learning Moore, Peter. ‘Oxfam must be brought to book on shops policy’. 6 August 2009. Timesonline. Newell, Andrea. ‘Top 10 Cause Marketing Campaigns of 2010?’ 31 December 2010. Triple Pundit. Available from < http://www.triplepundit.com/2010/12/top-10-marketing-campaigns-2010/> Oxfam 2011. Organization’s website in the UK < http://www.oxfam.org.uk/> Riddle, Annie. ‘Oxfam killed my bookshop’ 30 July 2009. Salisbury Journal. Available from Tench, R., Yeomans, L. 2009. Exploring Public Relations. Essex: Pearson Education Thomson, Liz. ‘Time to examine the terms of trade’ 23 August 2009. Book Brunch. Available from Bibliography Blythe, J. 2006. Principles & practice of marketing. Belmont: Cengage Learning Cole, G. 2003. Strategic Management. Belmont: Cengage Learning Doole, I., Lowe, R. 2007. CIM Coursebook Strategic Marketing Decisions. Oxford: Butterworth-Heinemann Ewing, M. 2001. Social marketing. London: Routledge Gilmore, A. 2003. Services marketing and management. 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