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9LITERATURE REVIEW REPORT

LITERATURE REVIEW REPORT

The Successful Marketing Strategies for the NPOs – Literature Review

Abstract

Non-profit organisations (NPOs) have to market their objectives and causes to potential volunteers as well as donors. For this reason, they require a marketing strategy that is well planned, which could enable them to create awareness. This literature review report seeks to critically analyse how strategic marketing plan can enable NPOs to effectively communicate their goals and missions to others with the objective of stimulating feasible action on its behalf. This literature review report will critically summarise the existing knowledge with regard to the topic and identifies any weaknesses and strengths in the previous work. This literature review report focuses on the successful marketing strategies for the NPOs.

Literature review

Relationship Marketing at NPOs

While citing a number of studies, Hussain et al. (2014) mentions that most NPOs’ goals maximising the value, which the organisation seeks to generate for the society and its stakeholders. Rather than partnering, the majority of NPOs are competing with each other for resources such as funds and members. For this reason, competition between NPOs has become very strong. Hussain et al. (2014) belive that building relationships could enable NPOs to generate a competitive advantage; thus, effective marketing tactics as well as strategies must be employed so that NPOs can build lasting relationships with the key stakeholders. In order to survive, the authors believe that it important for the NPOs to ensure that their relationships with their key stakeholders are developed and sustained. They should also ensure that the techniques used to communicate with the key stakeholders are effective and suitable. While evaluating the level to which the NPOs practice the relationship marketing, Hussain et al. (2014) established that NPOs experience different benefits when using the relationship marketing.

The authors insist that NPOs should adopt relationship marketing as one of their main strategies for marketing. The significance of marketing in NPOs was also studies by Mottner and Ford (2005), they established that the NPOs marketing activities could have financially related as well as mission-related results. Therefore, when an NPO pursues both financial and educational marketing strategies, it is more likely to achieve improved performance. Pursuing a marketing strategy as observed by Hussain et al. (2014) can enable NPOs to communicate effectively with their stakeholders. They also found out that most NPOs understand that relationships can be developed if the key stakeholders are engaged. Therefore, both Mottner and Ford (2005) and Hussain et al. (2014) agree that marketing is an important technique that may be used by NPOs to stimulate public support as well as interest. More importantly, communication has been cited as an important factor that could strengthen the NPOs-stakeholders relationship.

The Construct of Market-Orientation

The market orientation effectiveness according to Brady et al. (2011) is present in different parts of the world. While assessing Victoria-based NPOs’ marketing activities, Brady et al. (2011) established that activities associated with fundraising exhibited the existence of choices accessible to all NPOs, which may result in improved organisational performance. They noted that in case NPOs have systems that generate knowledge, which could be used to examine their performance and this could improve the overall performance. Market orientation according to Brady et al. (2011) is conveyed as an emphasis on fundraising and is linked with the organisational performance. In their study, Macedo and Pinho (2006) examined the construct of market orientation in the non-profit sector. Owing to the NPOs specificity as well as the demanding resource environments wherein they operate, adopting the marketing concept is seen as an adaptive strategy that ensures NPOs get the needed resources to achieve their missions as well as perform their activities. Therefore, Macedo and Pinho (2006) examined the type of revenue strategy associated with NPOs’ market orientation, towards beneficiaries and donors. Presently, NPOs according to Macedo and Pinho (2006) should espouse a different attitude with regard to their sources of funding as well as their organisational strategies. That is to say, they must look for ways to efficiently handle their resources so as to achieve their goals.

Macedo and Pinho (2006) observed that NPOs also experience external pressures and they permanently interact with other entities in the setting where relationships related to resource exchange happen. Their study results indicated that NPOs in Portugal are more market-oriented for beneficiaries rather than donors; thus, exhibiting a behaviour that is less proactive with regard to their donors when contrasted to the beneficiaries. Even though NPOs are considered to operate in a monopolistic environment, regarding their beneficiaries, Macedo and Pinho (2006) noted that this has no negative effect on the customer orientation approach. In the long run, NPOs offer services to persons unable to effectively make their voices heard. Macedo and Pinho (2006) study exhibited that the NPO market orientation is influenced by the type of dependence on resources; that is to say, the market orientation of NPOs that rely on private resource providers is more inclined towards the donors. With regard to the market orientation of the user, Macedo and Pinho (2006) noted that it was slightly unconvincing because the achieved statistical significance was in terms of responsive dimension.

Significance of NPOs’ Market Strategies

In the last 30 years, most NPOs have tremendously grown; leading to a greater interest in the significance marketing. As mentioned by Pope et al. (2009), the marketing strategies used by NPOs in the past were ineffective; therefore, the authors seek to develop a new marketing strategy for the non-profit sector. Using qualitative research methods, the authors analysed the marketing strategy that is suitable for NPOs. According to Pope et al. (2009), most NPOs use target marketing to attract donors, but this strategy appears to be sporadic and unfocused. Therefore, it is imperative that NPOs comprehend the factors that motivate donors before coming up with a marketing strategy that addresses the motives of the donors. Pope et al. (2009) established that most NPOs experience few challenges while looking for clients or customers, in spite of the fact that many users are relying on the type of services or goods that the NPO offers. Irrespective of the NPO size or the services/goods offered, the authors noted that most NPOs are experiencing challenges in brand/name recognition. Therefore, the success of the NPO’s marketing strategy depends on its straightforwardness as well as ability to implement and measure.

Sato et al. (2013) supported Pope et al. (2009) study findings while
examining the NPOs marketing practices, strategies, as well as its challenges. Sato et al. (2013) established that most NPOs are performing marketing and deem marketing strategies to be crucially important for their success. Sato et al. (2013) further noted that it was challenging to measure the NPOs’ marketing effectiveness because most organisations do not have assessment tools. In their literature review, fewer than 50% of NPOs have dedicated marketing personnel. The majority do not have because of financial restraints. Furthermore, Sato et al. (2013) established that most NPOs’ marketing managers do not have marketing skills and the lack of human resources and financial limit their ability to engage in marketing activities. Most NPOs as observed by Sato et al. (2013) do not rely much on the advertisement, Facebook and direct mails, but they rely more on the word of mouth.

International Perspective of NPOs Marketing

In their study, Dolnicar and Lazarevski (2009) sought to determine whether NPOS pursue the customer entered marketing approach if the marketing activities are managed by marketing-trained personnel and the extent of cross-continental differences in marketing adoption. Evidently, NPOs are currently adopting business-like methods utilised mostly in by the for-profit organisations; however, they are facing numerous market pressures normally experienced by the for-profit organisations, such as competition for funds. Dolnicar and Lazarevski (2009) established that scores of NPOs are a long way from achieving a full potential by means of marketing. This is attributed mainly to numerous reasons such as limited utilisation of marketing tools as well as the overreliance on promotion. Furthermore, NPOs have reluctantly adopted the marketing instruments and strategies since they consider marketing to be a bad thing used to manipulate people. For this reason, Dolnicar and Lazarevski (2009) posits that NPOs at the global level have started accepting benefits associated with marketing with the aim of realising their goals. While investigating the means of marketing means utilised by NPOs in Albania, Tabaku and Mersini (2013) established that most NPOs do not understand the significance of marketing. The majority of NPOs according to Tabaku and Mersini (2013) lacked instruments of marketing means. In addition, the authors noted that many NPOs did not understand the marketing principles and only a few engaged in the marketing activities.

In a nutshell, this literature review report has critically analysed the existing literature with regard to successful marketing strategies for the NPOs. The literature review has offered an up-to-date knowledge about the topic as well as its significance in marketing practices. The literature review has identified methods utilised in the previous research with regard to the topic. As mentioned in the report, a number of NPOs are reluctant to adopt marketing strategies because of inadequate understanding of marketing principles and many perceive marketing as manipulative. However, the competition for funding has forced a number of NPOs to adopt business-like marketing strategies. Still, lack of skilled marketing-trained employees and finance has created more obstacles than benefits to NPOs.

References

Brady, E., Brace-Govan, J., Brennan, L. & Conduit, J., 2011. Market Orientation and Marketing in Nonprofit Organizations. Indications for Fundraising from Victoria. International Journal of Nonprofit and Voluntary Sector Marketing, vol. 16, no. 1, pp.84-98.

Dolnicar, S. & Lazarevski, K., 2009. Marketing in non-profit organizations : an international perspective. International Marketing Review, vol. 26, no. 3, pp.275-91.

Hussain, S.B., Rawjee, V.P. & Penceliah, S., 2014. The applicability of relationship marketing at non-profit organizations: a developing country perspective. Problems and Perspectives in Management, vol. 12, no. 4, pp.155-60.

Macedo, I.M. & Pinho, J.C., 2006. The relationship between resource dependence and market orientation: The specific case of non-profit organisations. European Journal of Marketing, vol. 40, no. 5/6, pp.533-53.

Mottner, S. & Ford, J.B., 2005. Measuring nonprofit marketing strategy performance: the case of museum stores. Journal of Business Research,vol. 58, pp.829– 840.

Pope, J.A., Isely, E.S. & Asamoa‐Tutu, F., 2009. Developing a Marketing Strategy for Nonprofit Organizations: An Exploratory Study. Journal of Nonprofit & Public Sector Marketing, vol. 21, pp.184–201.

Sato, T. et al., 2013. Exploring a New Marketing Strategy for Nonprofit Organizations: An International Perspective. International Journal of Marketing Studies, vol. , no. 6, pp.8-14.

Tabaku, E. & Mersini, M., 2013. An Overview of Marketing Means Used by Non-Profit Organizations: A Detailed Overview of NPOs Operating in the District of Elbasan. Journal of Marketing and Management, vol. 4, no. 2, pp.78-95.