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The lack of a financial "bottom-line" incentive often makes for very confusing objectives. Multiple audiences, along with hard-to-describe "prpducts," make Marketing and planning difficult. Decision making, setting objectives, and evaluating performance are each rendered a challenge.

There are many distinct differences between for-profit and non-profit companies, most notably with regard to their selection of target markets and the Marketing Mix variables (i.e., The 4Ps). The discussion below elaborates on these differences.

1. Target Markets. The intended audience for NP services may, in some instances, be little different from that of tangible products, while in other instances, the target audience is a far cry from what traditional Marketing would produce.


For example, in the case of Ad Council messages advocating the wearing of safety belts, drug avoidance, etc., the intended audience is people who really do not want to hear the message. Given that the market is indeed resistant to the message, should Marketing efforts focus on the least resistant, the most resistant, or both?

Another interesting market targeting limitation of NPs is that they are often forced by design to target the "average" user, when in fact there are very few "average" users. For example, mass transit is targeted to anyone in need of transportation, be they rich or poor. Higher education is targeted to people of any race, gender, or income background. And flu shots are for anyone who does not want to get sick this winter.

This unique characteristic puts NPs at a disadvantage because, while trying to be all things to all people, they wind up satisfying any market segment. Most for-profit firms, on the other hand, have rather specific targets in mind, and go to great lengths to satisfy the selected segment(s).

NPs often have different names for the "customers" who patronize their services. Whereas for-profit firms generally call everyone "customers," in the public sector, these people are called clients, patients, members, patrons, or sponsors. Depending on the nature of the NP organization, any of these terms may be applicable.

A final characteristic of NP target marketing is that the NP often provides services to those who are not adequately served by the private sector. This results in the NP complementing, and not competing against, the for-profit sector. (This is not always the case, as illustrated by the US Post Office competing against private couriers for the parcel delivery business.) As NPs seek to complement the for-profit firms, they must seek to identify underserved market segments, and prepare Marketing efforts to satisfy those segments, as opposed to targeting the most profitable market niches.

2. Product. One of the biggest considerations for NP Marketers to remember is that the "product" is usually intangible, and often abstract or ideological. This often makes selling the "product" very challenging. For-profits and non-profits are similar in that their services are inseparable (consumption and production occur simultaneously), and variable (both within and between service providers). But the similarities end there.


NP businesses differ from for-profits along three dimensions:

• Benefit Complexity, which refers to the very abstraction of behaviors or ideas, such as smoker's rights, the need to eat healthily, the need for immunizations, etc.
• Benefit Strength, which refers to the direct personal benefits of the "product." What benefits are there from donating blood, or driving the speed limit, or voting a particular way? These weak benefits stand in contrast to the strong benefits conveyed by private-sector Marketers.
• Involvement, which refers to how much personal involvement or motivation the "product" elicits. NPs generally generate a much wider range of involvement, from a casual yawn all the way to emotion-charged, whereas tangible products have a narrower range of customer involvement.
An important product consideration is that many NP firms are regulated and must offer only a certain service, or cannot offer expanded services without approval from higher authorities. In other cases, the NP's charter and mission statement may restrict activities to a specified domain. For example, the local mass transit authority cannot enter the taxi cab business. The American Lung Association is not interested in any other organ in the body. And state universities are often not allowed to compete with other state universities (not directly, that is), and must petition their state's Higher Education Coordinating Board to add or delete programs.

This consideration sets NPs apart from their for-profit colleagues in the marketplace. A private university can add or delete programs almost at will (or certainly without the level of bureaucracy that state-run schools must endure).

3. Placement. The distribution of these services is a consytantly changing variable. While NPs may be restricted in some regards, they are able to use creativity in others. For example, while universities have traditionally not been able to offer classes outside their campus setting, new methods of delivery are appearing, such as online courses, televideo courses, and satellite campuses. Some universities are even delivering their programs to corporate customers. Dallas Baptist, for example, is providing graduate business education to Southwestern Bell at the SWB facilties.


Other NPs may not have such flexibility. For example, mass transit may be limited by where the rail lines have been laid. The Salvation Army probably would not do very well setting up its buckets in residential areas, or in other low traffic areas.

Mass media such as television can help connect the NP with its target customer. For example, the MDA holds its annual telethon on television, with nationwide coverage. Telethons such as this are able to reach millions of potential patrons.

4. Promotion. NPs are somewhat more limited in the types of promotional activities they can employ. Some NP organizations are not allowed to promote at all, while others are restricted. Furthermore, the act of NPs advertising and promoting (especially in the case of government monopolies) draws public criticism as a misappropriation of funds. Even the act of one or more state universities promoting their respective programs may be viewed by some as a waste of monies and a violation of the public trust.


One frequently used form of promotion is the PSA (public service announcement). These are usually free, having been donated by the various media (i.e., TV stations, newspapers, etc.). Good examples are the PSAs from the Ad Council, such as Smokey the Bear.

The US Post Office is currently engaged in intense advertising to try to recapture some of the fourth-class mail market from competitors such as UPS and Federal Express.

5. Pricing. Just as the "customers" of NPs often go by different names, "price" has a number of euphemisms. For example, it may be called a fee, donation, tuition, fare, fine, or rate. In any regard, it


The "price" charged for these services has both financial and non-financial implications. For example, while many public services are priced low so that poor consumers can afford them, this target market will often avoid them because of the stigma (i.e., embarrassment) of utilizing them.

Another non-financial cost is the time factor; even if flu shots are free, there is an opportunity cost of time that must be accounted for, and some people are willing to risk the chance of illness instead of going to the free clinic.

Pricing objectives are difficult to set for NP firms. How much should a patron pay to a public TV station? How much money should someone put in the offering plate? How much should be charged for a ride on public transit? Certainly these organizations wish to cover their administrative costs, but they should not give the appearance that they are indeed profiteering. The challenge is theirs to give their customers the feeling that they are receiving value for their money, while not giving critics the idea that money is being spent in order to make more money.

Another issue is that many NPs price their services below cost. If students at universities (even private schools!) had to pay the true value of their education, the cost would be so prohibitive as to exclude most people from ever partaking. Thus, governments, corporations, and individuals all help subsidize these entities. In Texas, the state-mandated tuition rate of about $35 per credit hour comes nowhere near covering the expense of delivering it. Even the out-of-state tuition rate is far off the mark.

In some cases an indirect form of payment is made for services. For example, fire and police protection are paid for by everyone through taxes, as are public schools, mass transit, and other government programs.

In some types of NP organizations, prices are established by the government. The price of a first class stamp is set by the federal government, and the Post Office must petition for a rate hike. Similarly, mass transit providers are also regulated in terms of price. In addition, tuition at state universities and colleges is also set by the state.

Finally, there is often a separation between the payers and the users. Many of the services provided by NPs are paid for by those with healthy finances, while the consumers of such services generally have poorer finances.

Non-profit organizations face many challenges. In many cases, their revenues are tied to a governing agency or sponsoring entity. In other cases, their range of activities is restricted by law, charter, or mission. Their target markets are frequently people who are not particularly interested in what the NP has to offer. Finally, availability of the service is often restricted to a specific location (e.g., Palo Duro Canyon Park cannot expand its boundaries because adjacent land is privately owned).

In spite of these limitations and unique circumstances, NP organizations still must market themselves. To not market is to assume that word-of-mouth communications will get the job done. There are few for-profit firms that can rely solely on this method of Marketing. The same is true for NP organizations.

While NPs take on the risk of public scrutiny for Marketing, it is well worth the risk. While the activities of PETA and Greenpeace may be repulsive to some, these organizations would not be able to disseminate their message without some form of Marketing. To this end, they have developed websites, and have placed ads in many major media.

An interesting commentary on Marketing can be found at the Adbusters website. Adbusters is dedicated to denigrating the efforts of commercial Marketers. Their site is filled with editorial content highly critical of American Marketing. They even instruct people how to vandalize billboards, as well as how to sabotage focus group studies (no kidding!). What is especially interesting is that, while Adbusters is highly critical of Marketing, they are in fact using Marketing to promote their gospel. Their slick website is testimony to this, as are the t-shirts they sell.

Every organization needs a Marketing effort, even those who do not like Marketing. The essence of Marketing is communication, not sales, as many people believe. The sales will happen as a result of the communication.

Aside from some given restrictions in their ability to market themselves, NP organizations should utilize the same forms of Marketing strategy as do for-profit Marketers. They should pay strict attention to target marketing. Even if an organization is by design "for everyone," this does not preclude the practice of selecting certain groups. For example, while a public university is open to anyone meeting admissions standards, the school can target specific groups. Corporations could be targeted with the MBA. Hospitals could be targeted with an MHA (Masters in Health Administration) degree. The agriculture industry can be targeted with AgriBusiness degrees.

The 4Ps should be treated much the same way as they are for profit-oriented firms. A greater degree of creativity may be called for because of the numerous unique circumstances discussed above, but these circumstances can be overcome. For example, a university can tailor programs to reflect current needs of the marketplace. While the core curriculum of public universities is mandated by the state, this does not preclude a university developing new programs specifically for certain targeted groups. The MBA is an excellent example of this, as are programs in environmental sciences, health administration, and education administration.

Promotion should certainly be cutting edge. The Internet is the perfect forum for such advertising, because it does not yet know any limitations or restrictions. Any entity can advertise on the Internet. To paraphrase a well-known quote, the Internet is a stage, and we are all players.

But all other media should be employed, wherever possible. The message may well need to be packaged more carefully, but not necessarily. For example, PETA has unabashedly advertised its anti-fur stance with graphic aplomb. And Adbusters, for all their inconsistency, are actually a very clever bunch in their publications. (It should be noted that many major media outlets have refused to run Adbuster advertisements for fear that they may offend their other advertisers!)

Distribution can likewise be handled strategically. While some NP entities are rather restricted, others are not. Universities can offer weekend and evening classes, as well as develop off-campus programs. WT's Taiwan MBA is a good example of remote-site delivery of education.

Finally, while price may be dictated in some cases, in those instances where price is flexible, the NP should not be afraid to be aggressive and assertive, and price their services according to the what is being offered, as well as the expectations of the target audience. In other words, it may indeed by appropriate to ask for $1000 from viewers of public television if the patrons feel like they are receiving value, and perhaps even some status, from making a contribution.

The essence of these recommendations is that a high degree of creativity is called for in promoting the NP organization. Many special circumstances call for unusual actions above and beyond what other firms can do. The NPs have something to sell, be it a flu shot, an idea, an education, or religion. They should market their services like anyone else, and seek to satisfy the needs of their respective markets.

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