Elaboration of the marketing mix and positioning
plan for your idea
“An idea is like a play. It needs a good producer and a good
promoter even if it is a masterpiece. Otherwise the play may
never open; or it may open but, for a lack of an audience,
close after a week. Similarly, an idea will not move from the
fringes to the mainstream simply because it is good; it must
be skillfully marketed before it will actually shift people's
perceptions and behavior.”
― David Bornstein, How to Change the World: Social
Entrepreneurs and the Power of New Ideas
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Every type of business, both social and traditional, has many types
of customers; however, typically in traditional businesses, the
paying customer makes the purchase decision.
In the case of social enterprises, the customer who buys the product
or service may often not be the ultimate consumer (or target
customer) of the product or service.
The decision-maker on the product or service is likely the party
paying for it (the payer) and this may be the government, a
foundation, an individual or other third party such as a
funder.
The customer who consumes the product or service (the participant)
will likely have access to the product or service at no cost or a lower
than market price through the payer. This added customer profile
means that your marketing strategy and planning will be slightly
different from traditional businesses.
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NONPROFIT ENTREPRENEUR: An individual who
pays increasing attention to market forces without losing
sight of the nonprofit’s underlying mission.
SOCIAL ENTERPRISE: Any organization, in any sector,
that uses earned income strategies to pursue a double
bottom line or a triple bottom line, either alone (as
a social sector business) or as part of a mixed revenue
stream that includes charitable contributions and public
sector subsidies.
SOCIAL ENTREPRENEUR: Any person, in any sector,
who runs a social enterprise.
SOCIAL ENTREPRENEURSHIP: The art of
simultaneously pursuing both a financial and a
social return on investment (the double bottom
line).
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DOUBLE BOTTOM LINE: The simultaneous
pursuit of financial and social returns on
investment – the ultimate benchmark for
a social enterprise or asocial sector
business.
TRIPLE BOTTOM LINE: The simultaneous
pursuit of returns on investment in three areas –
financial, social and environmental.
Development of a marketing plan begins with the
answers to five questions, and all of marketing takes
place in the gap between the answers to questions four
and five:
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What must happen for the organization to be
successful?
Who must be involved?
What must they do?
What must they believe before they will do it?
What do they believe now?
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Once an organization has answered its
key strategic marketing questions, it must
adopt whatever tactics are necessary to sway
its clients, customers and
other stakeholders.
The four tactical marketing weapons are known
collectively as the marketing mix: “Packaging”
(product or service
design), pricing strategies, distribution
channels and marketing communications.
The goal of marketing, therefore, is to win a share
of client, customer or stakeholder mind, and the
people being targeted must be led through four stages:
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Awareness (getting their attention)
Understanding (making sure they comprehend what
the organization is saying – and what it is not saying)
Credibility (do they believe what the organization is
saying?)
Persuasion (in the light of equally credible claims from
others, will they do what the organization needs it to
do?)
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The marketing team will need to develop
appropriate positioning strategies and use a
variety of tactical marketing weapons to guide
its clients, customers and stakeholders through
the process. However, there are four major
obstacles to creating a successful marketing plan:
Lack of commitment by senior management
No written plan
Failure to involve the people charged with carrying
out the plan
A lack of quantified objectives
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Unlike market research, which investigates the viability of a specific
product, service or market segment, marketing research evaluates
the effectiveness of an organization’s packaging, pricing, distribution
and marketing communications strategies
If a social enterprise starts with its current products and services and
then tries to find somebody willing to pay for them, it will be trying
to push itself into the market.
However, if the business starts with its potential customers, discovers
what they need and are willing to pay for, and then builds it, the
customers will pull it into the market and significantly increase its
chances for long-term success.
The preferred approach, therefore, is to begin the process with
thorough market research. However, if a business is introducing a
product or service that has never been offered before, then the research
may not be conclusive and market push might be the only alternative.
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Market research: Intelligent decisions about what
products or services to offer and what target markets
to pursue can only be made after thorough research,
which typically occurs in two stages:
Secondary research is designed to gather as much
information as possible from existing documents (such
as articles, brochures and reports)
Once the list of possibilities has been narrowed by
secondary research, primary research consists of faceto-face conversations with past and potential
customers
The first step in market research is market segmentation. The next
steps are to answer a series of questions about each segment:
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How many people in the segment actually need the product or service,
regardless of their ability to pay? And how critical is their need?
What are the critical success factors associated with designing, developing
and delivering the product or service for this particular segment?
What environmental forces will play a role? Will they be positive or
negative? How helpful or damaging will they be? Do we have the capability
to capitalize on the opportunities and mitigate the threats?
Who are the primary competitors? How do we rank against them in terms
of critical success factors and environmental forces? Can we win?
What is the potential size of the segment in terms of dollars? And what is
the opportunity within the segment? Is it growing, remaining flat or
declining? How much has been exploited? How much of the competition’s
share is vulnerable?
What are the fixed and variable costs? Will we make a profit or lose
money? How much?
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Every business has both a “subject” and a “predicate” – a specific
product or service aimed at one or more specific target markets for
example, “tutoring services for potential high school dropouts” or
“computer training for men and women on welfare”).
Dividing mass markets into smaller components is called “market
segmentation”
The criteria for dividing a consumer market could include such things
as geography (e.g.,nations, states, regions, counties, cities,
neighborhoods, climates); demographics (e.g., age, income, gender,
marital status, family size, occupation, education, income, nationality);
psychographics (e.g., customer lifestyles, activities, interests, social
class, personality characteristics, political leanings); or the way
customers behave toward a specific product or service
(e.g., frequency of purchase, sensitivity toward price, levels of desired
quality, and so on).
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The tools an organization uses to differentiate itself from its
competitors in the minds of its clients, customers and other
stakeholders.
Each organization must develop an overall positioning strategy
and complementary strategies for each of its programs, products
and services.
At the overall level, success or failure begins and ends with the
organization’s image, and every organization has one whether it
wants to or not – the only question is whether it will help shape
the image (marketing plan) or leave the shaping to others.
The stakes are high: A positive image enhances employee morale,
gives donors additional confidence, improves community
relations, lowers the cost of sales, makes higher prices palatable,
speeds market penetration, builds customer loyalty, and enhances
recruitment of employees.
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One of the four parts of the marketing mix.
The most common pricing strategies are
“penetration” pricing (typically used when
introducing a new product or service or to build
market share); “prestige” pricing (to establish a
reputation for quality); “value” pricing, which
rises or falls according to market demand; “costoriented” pricing (typically used to achieve a
specific profit margin or return on investment;
and “psychological” pricing (e.g., discounts
and flexible payment plans).
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One of the four parts of the marketing mix.
Distribution channels are the routes products and services travel
from the provider to the receiver. There may
be intermediaries along the way (individuals or institutions) that
must be compensated as part of a company’s distribution costs.
Distributor relationships occur when either a commercial company
or a nonprofit channels its products or services to customers
through the other’s network. A common example in the United
States takes place when commercial companies partner with
nonprofits to access federal and state “set-aside” programs (in
which government contracts are offered first to nonprofits). It is one
of the four most powerful types of strategic partnerships between a
commercial company and a nonprofit.
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There are 3 types of audience:
1 – The end-user of the product/service
2 – Intermediaries, who operate between the
producer and the end-user
3 – Stakeholders who may have no direct interest in
the product but who have
an interest in the organisation itself
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Different communication strategies are required for
each audience.
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Pull strategy – aimed at the end-user. Seeks to create demand
through the target
audience so that they pull products through the marketing chain.
This demand may
be for products and information. An individual approaching a
retailer for a product
they have seen advertised on TV and an Internet user searching for
product details
on a company web site and are both examples of pull by consumers.
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Tools – personal selling, expos, trade ads, web sites, PR, direct
mail.
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Push strategy – targeted at intermediaries. Push
activities aim to persuade the
intermediary to push the product along the marketing
chain by stocking it, displaying
it or advocating it.
Tools – revolve around relationships, personal selling
and account management will
be central to this approach
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Profile strategy – aimed at stakeholders and seeks to influence
their perceptions of
the organisation, e.g., communications about the business financial
performance,
ethical stance or community involvement.
Once you have decided on your product strategy, the market
segments you wish to target, your positioning and communications
strategies, you can then look at the tactics of your marketing
communications plan; that is, the elements of the marketing
communications mix that you are going to use to implement the
marketing communications strategy.
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The elements of the marketing communications mix
include:
Advertising
Sales promotion
Personal selling
Public relations
Direct marketing
Sponsorship
Exhibitions
Events
e-marketing
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You can use advertising to:
Raise awareness
Educate the market
Persuade the market
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It is vital that you know what you are trying to achieve:
Are you launching a new product?
Are you defending your market position against a new competitor?
Do you want to remind people about your market-leading product?
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You must:
Define your target audience
Decide on the objectives for your campaign
Set the budgets for the campaign
Select media
Test and develop advertising
Implement and schedule the campaign
Evaluate the campaign – this should inform you as to whether the campaign was
a success or failure
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Sales promotion can be used for:
Changing short-term behaviour in consumers, retailers and stockists
Encouraging different and increased usage of your product/service
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Advantages:
Can be relatively quick and simple to organise
Inexpensive
Should successfully alter behaviour
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Disadvantages:
Behaviour change is likely to be short-term only
Can lead to a drop in sales after promotion is over
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Can be used for:
Business to business product/service selling
New product launch
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Advantages:
When long-term relationships develop, they can be very lucrative
Personal selling allows for more complex products/services to be
demonstrated
and explained
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Disadvantages:
It is expensive and time consuming, with each sales call being very
costly
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Can be used for:
Profile raising
Lobbying and campaigning
News announcements, for example a new project being undertaken
New product launch
Crisis management
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Advantages:
Can be cost effective
Can achieve multiple objectives
Can be targeted at specific publications
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Disadvantages:
Using an external agency may be required if a large-scale campaign is planned
Once the message has left your organisation, you have no more control over it.
It can be interpreted and reported by journalists in a positive or negative way.
It may not be picked up by the press, which you have very little control over
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Can be used for:
Product launches
Profile raising
Brand development
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Advantages:
The sponsor-sponsee relationship should ideally be win-win, with each party
gaining from their association with the other
Provides the opportunity to develop a long-term relationship
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Disadvantages:
If either party suffers bad press coverage it could affect the other
Sponsorship can be a more long-term, profile-raising activity – only a
disadvantage
if company expectations do not reflect this
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Can be used for:
Product launches
Sales promotions
Relationship management
Market research
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Advantages:
Allows very specific targeting on individuals
It can be easier to monitor response rates than other methods
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Disadvantages:
Direct Mail can be perceived by the recipient as a nuisance
There are rules and regulations which may make it more difficult to employ direct
marketing techniques
An increasing number of people are choosing to opt out of receiving unsolicited
direct mail
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What is important to remember is that all activities
should complement each other – they should work as
a ‘family’ of communications so if someone were to
look at, for example, an advertisement, a direct mail
flyer and your website they should be able
to see familiar themes running throughout them,
whether that is the branding, the
promotional messages or the ‘look and feel’ of the
pieces.