Marketing in Public Sector - Essay Example

Lecturer: Introduction Public sector management is usually under constant criticism with regards to the strategies applied to deliver services to the tax payers. Implementation of government policies is characterised by bureaucracy that in most cases hinders innovativeness in the accomplishment of objectives. However, new public management has changed the relationship between public organizations and citizens with more emphasis on efficiency in public spending and innovativeness. Citizens are viewed as customers as is the case in private sector organizations and hence public managers are expected to maintain customer satisfaction and competitiveness in service delivery. For this reason, public managers are faced with the policy problem of integrating marketing in the public sector, which has been a preserve of private organizations, yet the government does not wish to compete with investors as this would slow down economic growth. This paper deliberates on reasons and strategies to resolve this policy issue. It also highlights possible drawbacks to be encountered as well as how they can be dealt with. Marketing in Public Sector Marketing is not just ordinary selling and advertising goods and services. Rather, it is a multifaceted activity involving understanding the needs of the target market and setting workable strategies to satisfy them in a better way than competitors (Ashworth, Boyne and Entwistle, 2010). Government institutions are not for profit and hence competition is minimal or absent. Nevertheless, operating in a monopoly is not justification for a general assumption that marketing is not necessary. Marketing in the public service is mainly concerned with consumer satisfaction as it is the core determinant of an organization’s image and also shapes the perception of stakeholders with regards to the effectiveness of public spending. It is important to resolve the policy issue of marketing as it leads to the assumption that public sector operates parallel to commercial activities by private sector companies. Public organizations are exposed to the competitive market forces, while the objective is to enhance quality and value for consumers who are the tax payers (Andrews et al. 2011). Marketing in the public sector promotes democracy in the form of new public management. It promotes competitiveness that is necessary in the provision of public services by eliminating monopolies that may be ineffective as a result of disproportionate dominance that hinders innovativeness in service delivery. On the other hand, it is a policy that promotes internal efficiency in public organizations by ensuring a distinct role for financing and service provision. An organization’s purchasing role is separated from the provider role by ensuring that the forecasting of the services to be offered and their financing is treated differently from the manner in which the actual provision of the services is accomplished (Box et al. 2011). The forces of demand and supply are allowed to guide the organization’s supply chain whereby multiple suppliers are encouraged to bid for supply contracts through competitive tendering processes while the purchasing role continues to be a public sector function. When public sector operates in a free market, different organizations operating under public funding are financed depending on the consumers they serve. In other words, public facilities such as hospitals are compelled to improve their performance in service provision to attract more funding (Andy, 2009). Consumers are presented with a choice of the facility to seek services from, with those offering poor qualities having minimal number of customers and hence lower funding. It therefore becomes essential for public organizations to engage in significant marketing efforts to attract consumers (Madill, 2009). It is important to integrate some private sector management principles with articulate long-term goals that clients are able to associate with. This includes applying marketing strategies that can help public organizations to enhance delivery of non-profitable services. For example, the public health department can promote a product mix that includes various services such as medical services through hospitals, health education offered by community nurses, ambulance services and palliative care (Shafritz and Hyde, 2011). The services in each component need to be marketed in a similar strategy as in the private sector to attract the public to seek the services. Constant improvements and innovations have to be encouraged to maintain competitiveness as people will seek services where they realize greater satisfaction. If the public health facilities have no one to attend to, then they will have no justification of being in existence. Even if the target for such facilities is not profits, the revenue generated through payment of services is important for the government to enhance the quality of service delivery to citizens (Maleyeff, 2006). Competitive practices are necessary in the public sector as they enable organizations to effectively respond to the needs of citizens. The conventional role they played as service providers has been interchanged with a market based approach. However, application of marketing principles in the public service faces numerous challenges as there is a likelihood of organizations engaging strategies that promote localised interests of gaining public support. Without public backing, the government cannot get the justification for public spending in an organization hence the efforts to manipulate the marketing principles employed to portray a positive outcome with regards to quality and efficiency for its continued survival (Rubin, 2009). Moreover, the marketing in the public service is likely to be used as a political platform for those in power to drive their opinionated agenda. In this view, consumers lose confidence in the public organization and its intended purpose of efficient service delivery and customer satisfaction cannot be achieved. It therefore calls for public managers to set marketing strategies that are safeguarded from interference by other factors apart from public interest, which is the key objective (Maleyeff, 2006). Most public sector organizations are established through government policy or legislation. Legislative constraints are likely to hinder successful integration of marketing principles in the public service whereby managers have limits with regards to decision making. For example, when commodity and service prices are set by the government, forces of demand and supply may not apply and hence innovative marketing strategies cannot be utilised. This occurs when the government decides what is generally good for the public rather than what the customers want (Shafritz and Hyde, 2011). Legislation makes service delivery highly inflexible such that a consumer who uses a particular service is likely to pay a similar amount as previously spent several years back. Physical organization is also a significant hindrance to successful marketing as public managers can only recommend improvements but have no capacity to influence policy makers regarding the urgency of such developments. For example, public railway transport managers may wait for years for government to upgrade existing infrastructure. Financial resources must be available for good marketing ideas to be implemented effectively (Andy, 2009). An issue that is typical to public service marketing is the relationship between the organization and the customer. Whereas modern marketing principles demand that the customer’s wishes to be considered as “always right”, public sector organizations are in many occasions unable to accomplish this philosophy. Professionalism in the public sector dictates the best way to meet customers’ needs regardless of their approval. In other words, customers’ rationality must correspond to the professional best practice otherwise they may be considered to be wrong. This phenomenon is associated with the disparity between public and private sectors’ products and services (Box et al. 2011). The private sector targets individual consumers while public sector offerings are targeted at masses, with products that are limiting and regulatory in nature making it highly impossible to satisfy all the users. Nevertheless, retaining customers in public sector organizations is usually easier than in the public sector as in most instances customers have no alternative but to accept the service as is offered even if they are not satisfied, for example in railway transport where the department enjoys monopoly. On the other hand, government services such as healthcare are offered for free and hence the customer has to weigh the opportunity cost of seeking treatment from a government hospital or from a private facility (Madill, 2009). To deal with the issues that inhibit objective marketing in the public service, it is important for managers to clearly communicate concepts, benefits and significance regarding the product and services presented to the stakeholders. Effective communication plays a central role in public sector marketing. Management communication needs to address the information needs of internal and external stakeholders. It aims at promoting a shared goal among participants in service delivery. Marketing in the public service is mainly focused on service products and their intangible nature requires special marketing strategies to ensure that their value is clearly understood by the consumers and stakeholders. Alford and O’Flynn, (2012) argue that public sector marketing needs to consider the person involved in service delivery to be as essential as the service being offered. It is therefore necessary that mangers make efforts to enhance relations between the organization and the customers through effective communication. It helps in attracting new customers, maintaining existing ones and also enhancing customer satisfaction. Marketing communication is also essential in attracting customers such as through publicizing services, personal selling and events sponsorship. It is an important strategy that sensitizes the public regarding the organizations activities and the procedures of accessing services. Failure in public organizations marketing results from the assumption by managers that citizens are aware of the service offerings by virtue of their public nature (Dooren, Bouckaert and Halligan, 2010). Marketing strategies in the public sector have a potential to increase customer focused operations as priorities are based on consumer needs rather than bureaucratic structures. Market research is an important undertaking that can improve understanding of customer needs and hence determine the best approach to satisfy them. It is also important to conduct customer satisfaction surveys to determine how well these needs are met and the organization’s potential to attract more customers (Shafritz and Hyde, 2011). A public organization also needs to undertake market research to determine trends with regards to prices, competition, innovations, demand and supply among other factors that may affect its efficiency. Understanding market trends ensures avoidance of obsolete services as customers demand better means of satisfying their needs as new technologies emerge in the market. The professional perspective of customer focused operations has helped to increase public confidence. Contemporary organizations in new public management are expected to focus on the end user contrary to the conventional bureaucratic structure that emphasized on the method of service delivery. Performance management needs to be integrated in the public sector to assess the efficiency of accomplishment of organizational goals. It needs to be focused on financial performance, internal efficiency as well as capacity of employees to meet targets (Andy, 2009). Conclusion Public sector marketing is a policy issue that affects service delivery mainly intended to enhance efficiency. It promotes democracy through new public management. Characteristics of perfect market competition are encouraged in the public sector through marketing. Organizations applying marketing principles are in a position to respond effectively to the needs of citizens who are regarded as customers. Various challenges are encountered in public sector marketing including statutory restrictions, poor physical organization, inadequate financial resources and political influence. Professionalism may hinder customer focus strategies as public sector organizations determine what is right for customers. The challenges can be overcome through effective communication of the concepts and to ensure objective marketing. Market research is essential in the public sector to enhance understanding of market trends for planning purposes. References Alford, J. and O’Flynn, J. 2012. Rethinking Public Service Delivery: Managing with External Providers, Basingstoke: Palgrave Macmillan. Andrews, R., Boyne, G., Law, J. and Walker, R. 2011. Strategic Management and Public Service Performance, Basingstoke: Palgrave Macmillan. Andy N. 2009. The performance measurement revolution: why now and what next?, International Journal of Operations & Production Management, 19(2), pp.205-228. Ashworth, R., Boyne, G. and Entwistle, T. 2010. Public Service Improvement: Theories and Evidence, Oxford: OUP Oxford. Box, R. C., Marshall, G. S., Reed, B.J. and Reed, C.M. 2001. New Public Management and Substantive Democracy, Public Administration Review, 61(5), pp. 61-66. Dooren, W., Bouckaert, G. and Halligan, J. 2010. Performance Management in the Public Sector, London: Routledge. Flynn, N. 2012. Public Sector Management, London: Sage Publications. Maleyeff, J. 2006. Exploration of Internal Service Systems Using Lean Principles, Management Decision, 44(5), pp. 101-109. Rubin, I.S. 2009. The Politics of Public Budgeting: Getting and Spending, Borrowing and Balancing, London: CQ Press. Shafritz, J. and Hyde, A. 2011. Classics of Public Administration, Stamford: Cengage Learning. Madill, J.J. 2009. Marketing in government, Journal of Public Sector Management, 28(4), pp. 9-18. Read More