Societal Role and Nonprofits
Non-profit marketing focuses on goals in education, youth development, environmental protection, healthcare, poverty and spirituality.
Identify, from a marketing perspective the societal role of non-profit organizations as stand alone organizations and in collaboration with for profit companies, and how a marketing message can be used as a benefit to consumers and society
- While for- profit organizations exist to produce profit, non-profit institutions exist to benefit a society, regardless of whether profits are achieved.
- Despite their opposing objectives, for-profits and non-profits often come together to implement cause marketing programs.
- Domestic and international scandals including environmental disasters, financial crises and human rights violations have prompted global companies to integrate corporate social responsibility (CSR) into their business.
- Cause Marketing: any type of marketing effort for social and other charitable causes, including in-house marketing efforts by non-profit organizations.
- cause-related marketing: a type of marketing involving the cooperative efforts of a “for profit” business and a non-profit organization for mutual benefit
- Non-Profit Marketing: Mission-driven marketing using the organization’s core mission as the foundation, and marketing communications as the focus.
- corporate social responsibility: How different business functions affect people and the environment, and how to integrate practices that positively impact society, employees and nature.
Societal Role & Non-Profits
While for-profit organizations exist to produce profit, non-profit institutions exist to benefit a society, regardless of whether profits are achieved.
Non-profits are allowed to generate revenue, but must do so in specific ways to maintain their non-profit status. Non-profit marketing seeks to accomplish goals that can cover a wide range of focus areas including education, youth development, environmental protection, healthcare, poverty and spirituality. However, companies that adopt fair trade or environmental sustainability business practices also develop organizational philosophies that consider its obligations to the communities they impact.
Non-Profit Marketing and Cause-Related Marketing
Non-profit marketing is mission-driven marketing using the organization’s core mission as the foundation and marketing communications as the focus. Central to this mission-driven marketing philosophy is adherence to the organization’s core values, and using its mission statement as the basis for planning and implementation of marketing strategy. Corporations also use mission-driven marketing to promote the goals of the organization as outlined in its mission statement and to communicate the benefits of achieving those goals to its stakeholders. However, for-profit companies measure success in terms of the bottom line; that is, profitability, their ability to pay stock dividends or to repay loans.
Despite their opposing objectives, for-profits and non-profits often come together to implement cause marketing programs. Cause marketing or cause-related marketing activities involve the collaboration of for-profit businesses and non-profit organizations for mutual benefit. One example would be the partnership of Yoplait’s “Save Lids to Save Lives” campaign in support of Susan G. Komen for the Cure. The company packages specific products with a pink lid that consumers mail to Yoplait. In turn, Yoplait donates 10 cents for each lid.
Used more broadly, cause marketing efforts often refer to any type of marketing effort for social and other charitable causes, including in-house marketing efforts by non-profit organizations. Cause marketing differs from corporate giving, since corporate philanthropy typically involves a tax-deductible donation.
Corporate Social Responsibility (CSR)
Domestic and international scandals including environmental disasters, financial crises and human rights violations have prompted global companies to integrate corporate social responsibility (CSR) into their business.
CSR looks at how different business functions affect people and the environment, and integrates practices that positively impact society, employees and nature. Companies are manufacturing more goods, hiring more local labor, and utilizing more raw materials and resources extracted from the environment in international locations. To reduce the negative impact of their factories, production sites and supply chains, major brands have committed to sustainability targets that aim to reduce their carbon emissions and give back to the larger global community.
It is the overall opinion of a company that earns consumer support and loyalty. Marketing messages are used to shape consumer opinion. The right marketing stimulates trade. The marketing message, especially one based on societal benefit or good, shapes consumer buying decisions. The more the message resonates with the buyer and answers their questions, the more sales will increase.
More and more brands are integrating CSR into their businesses to improve their brand image, increase profits and position themselves favorably in competitive markets.
Influence on the Entire Supply Chain
Marketing can play a key role in integrating supply chain processes and promoting collaboration between different stakeholders.
Show the impact that marketing has on supply chains, both operational and marketing types
- Supply chains are crucial functions that allow brands to translate customer demand into product fulfillment and market delivery.
- As communication professionals, marketing promotes collaboration between buyers and suppliers, product developers and common systems, customers and sales to reduce lead time, streamline customer feedback, and improve sales forecasting.
- Similar to manufacturing environments, marketing supply chains rely on the creation, production, warehousing, and fulfillment of materials, as well as the collection of feedback for continuous refinement, all of which can be seamlessly integrated into the larger supply chain.
- best practices: Methods or techniques that consistently show results superior to those achieved with other means and that are used as benchmarks.
- knowledge sharing: An activity through which knowledge (i.e. information, skills, or expertise) is exchanged among people, friends, or members of a family, a community (e.g. Wikipedia), or an organization.
Influence on the Entire Supply Chain
Supply chains are crucial functions that allow organizations to translate customer demand into product fulfillment and market delivery. A brand’s entire supply chain also includes marketing, which can impact other functions such as sales, manufacturing, and distribution. A primary example are organizations that hire external suppliers to produce marketing materials (print publications, promotional products, and point of sale systems) to market their products and services.
One of the primary responsibilities of marketing is to encourage communication between different parts of an organization to facilitate knowledge sharing. Marketing teams can play an integral role in integrating supply chain business processes, and promoting collaboration between buyers and suppliers, product developers, and common systems. Because operating an integrated supply chain requires a continuous information flow, marketers serve as major internal communication channels between customers, sales, purchasing personnel, and suppliers.
Marketing’s Influence on the Supply Chain
On a smaller, but still significant scale are the numerous processes, and internal and external partners companies use to deliver marketing materials to customers and clients. To move a finished product or service to customers, marketing works closely with printers, fulfillment houses, and other vendors to produce communications and execute marketing activities for different target audiences. From product brochures and promotional flyers to point-of-sale systems and store signage, each of these supplies must be acquired, managed, and ultimately distributed to customers, sales teams, branch offices, retail outlets, dealers, distributors, and other key audiences around the world.
In physical distribution, the customer is the final destination of a marketing channel, and the availability of the product or service is a vital part of each channel participant’s marketing effort. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing, thus linking the marketing channel with a company’s customers (e.g., links manufacturers, wholesalers, retailers).
Marketing flows and processes encourage information sharing throughout the entire supply chain. From customer service representatives providing real-time information on scheduling and product availability, to procurement departments that develop rapid communication systems, such as electronic data interchange and Internet linkage, to convey requirements from product marketing managers more rapidly, organizations must clearly communicate its marketing plan internally to successfully launch products with ever-shorter time schedules. By coordinating with product developers, plant managers (manufacturing), and logistics partners (distribution), companies can use this synergy between its departments to compete effectively in the marketplace and help drive firm revenue.
Subsequently, a brand’s entire supply chain generally encompasses:
- Customer relationship management
- Customer service management
- Demand management style
- Order fulfillment
- Manufacturing flow management
- Supplier relationship management
- Product development and commercialization
- Returns management
Sustainability and Social Responsibility in Supply Chains
Sustainability, which uses a triple bottom line incorporating economic, social, and environmental aspects, is another business issue that affects a company’s entire supply chain or logistics network. Sustainability represents a company’s social, ethical, cultural, and health (SECH) footprint on the surrounding communities where it makes products and conducts business.
Within the last decade, consumers have become more aware of the environmental impact of their purchases and companies’ SECH ratings. Often times, marketing and communications professionals are responsible for reporting a company’s SECH performance to customers, employees, media, investors, suppliers, and other relevant stakeholders. Greater consumer awareness and involvement around a company’s sustainability activities, coupled with the delivery of more transparent marketing communications, arguably places more pressure on other supply chain areas. In response to consumer and market pressures, organizations may enact operational improvements ranging from reducing water use, energy use, and waste, to adopting best practices in governance and employee engagement.
Negative public response over the use of pesticides or the unfair treatment of factory workers have often led to brands selling organically grown foods, adopting anti-sweatshop labor practices, and promoting locally produced goods that support independent and small businesses. For example, in July 2009, Wal-Mart announced its intentions to create a global sustainability index that would rate products according to the environmental and social impacts of their manufacturing and distribution. The index is intended to create environmental accountability in Wal-Mart’s supply chain and to provide motivation and infrastructure for other retail companies to do the same.
Supply Chain Challenges
Over time, most supply chains can grow cumbersome as new partners, products, and technologies are introduced to processes. Failing to identify efficiencies and develop best practices can increase costs, reduce service levels, and result in an overall loss of control. Similar growing pains around the adoption and integration of new partners, products, and processes can create inefficiencies in marketing as well, driving up costs and potentially causing delays in other areas of a company’s supply chain. For instance, some of the world’s largest consulting firms estimate that up to 60% of marketing costs are related to non-product ancillary areas (distribution, people, freight, storage, obsolescence, technology, and inventory management).
It is crucial that brands support marketing functions so they are both managed effectively and integrated seamlessly into the larger supply chain, thereby meeting larger business goals. These range from supporting internal and external collaboration and lead time reduction initiatives, to streamlining feedback from customer and market demand and improving customer-level forecasting.
The Global Economy
Increased global competition, financial flows and internet technologies are some of the driving forces behind global marketing strategies.
Outline the changes that are included in a shift to a global marketing perspective
- Domestic marketing strategies are increasingly limited to small- and medium-sized companies in niche markets.
- The “Four P’s” of marketing – product, price, placement, and promotion – must all be adjusted in order for the brand to be successful in markets that differ in language, customs and consumer needs.
- While operating in a global economy allows brands to maximize economies of scale and portray a consistent brand image across many markets, it also poses challenges for addressing consumer needs and wants, and reacting effectively against competition.
- socio-economic: Of or pertaining to a combination of social and economic factors.
- multinational: Operating, or having subsidiary companies in multiple countries (especially more than two)
The Global Economy
Now that the world has entered the twenty-first century, we are seeing the emergence of an interdependent global economy. This global market is characterized by faster communication, transportation, and financial flows, all of which are creating new marketing opportunities and challenges. Companies recognize that worldwide competition, international marketing trends, and Internet technologies must be considered when launching campaigns both domestically and internationally.
Given these circumstances, it could be argued that both small and large companies face one of two options: They must either respond to the challenges posed by this new environment or recognize and accept the long-term consequences of failing to do so. With the exception of companies in local niche markets, competitive changes within various markets are increasingly forcing companies to incorporate global variables into their marketing communications strategy.
As a result of this rapid shift towards an integrated, global economy, brands must adjust all aspects of the marketing mix to fit local tastes and needs, while maintaining a consistent product and brand image. Oxford University Press defines global marketing as “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives. ” The global economy certainly provides advantages to companies wanting to increase revenues and expand their brand. However, brands must be cognizant of some of the major challenges that come with marketing to a global audience.
Adjusting the Marketing Mix for a Global Audience
The four “P’s” of marketing–product, price, placement, and promotion–are affected as a domestic or multinational company adjusts its strategy to become a global company. At the global marketing level, global marketing plans must be tailored so that companies speak in many voices rather than just one. Developing marketing plans for different regions gives companies flexibility when reacting against competition or defending their position (market leadership, low cost provider, etc.) in a particular market.
Product: A global company will have to tweak certain elements of its products for different markets. Even a single product will need to be modified according to the market it will be sold in. Product packaging features, including color, shape, and form, may be similar. However, messaging and language are tailored according to the country’s native language and customs.
Price: Because it is affected by several variables, price will always vary from market to market. For example, cost of product development (produced locally or imported), cost of ingredients, cost of delivery (transportation, tariffs, etc.), and other variables will determine product pricing. Product positioning, including whether the product is high-end, low-cost, or middle ground, compared with competing brands also influences the ultimate profit margin.
Placement: Product distribution will also be determined by local and global competition, as well as the product’s positioning in the marketplace. For example, brands would not want to place high-end products in “dollar stores” in the United States. Likewise, a low-cost product in France would find limited success in an expensive boutique.
Promotion: After product research, development and production, promotional tactics, such as advertising, are generally the largest line item in a global marketing budget. An integrated marketing communications (IMC) strategy is key to achieving marketing goals, since IMC reduces costs, minimizes organizational redundancies, maximizes speed of implementation, and unifies brand messaging.
Advantages and Disadvantages of Global Marketing
The global economy provides many advantages for companies that are able to introduce their products on a global scale, while customizing their marketing strategies for different languages, cultures, and socio-economic demographics. These advantages include:
- Economies of scale in production and distribution
- Lower marketing costs
- Enhanced power and scope
- Consistency in brand image
- Ability to leverage good ideas quickly and efficiently
- Uniformity of marketing practices
- The development of relationships outside of the “political arena”
- The set-up of ancillary industries to cater to the needs of the global player
- Efficient and effective use of online marketing over traditional marketing
Nevertheless, many companies struggle with meeting the challenge of a larger and more complex marketplace. Brands conduct extensive research and consider numerous market variables when developing global marketing plans. Some of the challenges to marketing in a global economy are:
- Differences in consumer needs, wants and usage patterns for products
- Differences in consumer response to marketing mix elements
- Differences in brand and product development and the competitive environment
- Differences in the legal environment, which may conflict with laws in home market
- Differences in the institutions available, some of which may call for the creation of entirely new ones (e.g., infrastructure)
- Differences in administrative procedures
- Differences in product placement or distribution channels
Consumer awareness is the extent to which a brand is recognized by potential customers, and is correctly associated with a particular product.
Discuss the impact on consumer awareness as it relates to brand awareness and a company’s profitability
- Brand recall and consumer recognition are the two components comprising brand awareness.
- Brand awareness is an essential part of brand development, helping the brand stand out from competitors.
- Since brand awareness plays a major role in consumer buying decisions, brand awareness influences company sales and profits.
- brand extension: also known as brand stretching, brand extension is a marketing strategy in which a firm marketing a product with a well-developed image uses the same brand name in a different product category
- Market Share: The percentage of some market held by a company.
Brand awareness is the extent to which a brand is recognized by potential customers, and is correctly associated with a particular product. Expressed usually as a percentage of target market, brand awareness is the primary goal of advertising in the early months or years of a product’s introduction. Product awareness can consist of consumer knowledge of brand benefits, features, slogan, tag lines and other brand messaging elements.
The Foundation of Brand Awareness
Two components comprise brand awareness: brand recall and the consumer recognition of the brand. Brand recall is the ability of consumers to remember brands with reference to the product. Similarly, brand recognition is the potential of consumers to retrieve past knowledge of the brand when asked or shown an image of the brand logo. Brand awareness is an essential part of brand development, helping brands stand out from competitors. An organization that is highly successful in creating strong brand awareness within the consumer market is often referred to as a “household name. ”
Impact of Brand Awareness
The eventual goal of most businesses is to generate profits and increase sales. Brand awareness plays a major role in a consumer’s buying decision process, and is essential to helping companies build market share. Word-of-mouth marketing from family and friends, or high recognition of the product through repeated advertising, can drive consumers to purchase certain brands over others. Consequently, integrated marketing communications strategies are instrumental in helping companies expand their customer base and encourage repeat purchases.
High brand awareness about a product suggests that the brand is easily recognizable and accepted by the market in ways that differentiate the brand from similar products and other competitors. Effective marketing campaigns that increase brand awareness also eliminate confusion between similar brands, as well as inconsistencies that may arise in brand extensions under single brands.
Social Responsibility and Welfare of Customers
Adopting socially responsible practices that benefit customers and society is fast becoming a competitive advantage in global business.
Apply the premise of social responsibility and customer welfare from a company’s marketing perspective
- Despite accusations of greenwashing and self-regulatory maneuvering, large and well-known companies have built social and environmental programs into their overall business agendas.
- Brands that adopt CSR or social responsibility ideologies either focus on improving the welfare of customers and communities, and or producing products and services that directly benefit society.
- Consumer protection laws helped bring about the adoption of ethical policies that drive socially responsible behavior in corporations.
- greenwashing: A form of spin in which green public relations or green marketing is deceptively used to promote the perception that an organization’s aims and policies are environmentally friendly.
Social Responsibility & Welfare of Customers
Critics argue that corporate social responsibility (CSR) distracts from the fundamental economic role of businesses. While brands are incorporating social responsibility efforts into their marketing communication strategies, media and industry critics have accused companies of greenwashing human rights and environmental issues. Others argue that social responsibility efforts are an attempt to impose self-regulations and preempt the role of governments as a watchdog over powerful corporations.
Despite these accusations, mega brands such as Walmart and Coca-Cola have built social and environmental programs into their overall business agendas. Recent scientific data pointing to climate change and dwindling natural resources, as well as concerns over human rights, have promoted companies to recognize its societal role and act to benefit society at large. It has also been a marketing exercise for business-to-business and consumer companies, as they strive to educate stakeholders on their social responsibility efforts and initiatives. Social responsibility has thus become part of the latest management strategies where companies try to create a positive impact on society, while strengthening their brand image and doing good business.
For example, a large information technology (IT) firm can produce IT products that enable instructors in the United States to teach online courses to students residing in poor and developing countries. Developing energy-efficient products made with non-toxic and recyclable materials is another way that brands can generate profit while considering the welfare of society and the environment. In other words, social responsibility drives organizations to discover and satisfy the needs of customers in ways that also provide for society’s well-being.
Customer Health and Safety
Ensuring that industrial factories and production sites create safe and reliable products is integral to the trustworthiness and ultimate survival of a brand. Since the beginning of the 20th century, there has been a concerted effort in the United States to implement consumer protection laws related to food, drugs, and cosmetics. The emergence of consumerism during the 1960s intended to increase consumer influence, power, and rights in dealing with corporate institutions.
Today, many of the ethical issues arising from consumer health and safety concerns have led to practices that prevent or reduce the frequency of unethical behavior in companies. Organizations are expected to have a “code of conduct” or set of ethical policies that help guide employees, partners and suppliers in safe, legal, and fair business practices. Though organizations establish corporate ethics policies to facilitate the process of recovery in the case of an ethical scandal, it also serves to promote ethical standards throughout the organization. Marketing organizations communicate these values by developing campaigns and programs designed to influence behavior that improves both the consumer’s personal welfare and that of society. From providing free leaflets offering “green” tips, to advice on how to safely dispose of electronics, social marketing is fast becoming a competitive advantage in global business.
Careers in Marketing
The marketing field provides a wide range of careers for professionals in brand management, PR, and communications.
Give examples of careers in marketing and what they do for the organization
- Most roles and functions in marketing involve presenting information to target audiences, increasing consumer and customer demand, and differentiating products against market competition.
- Field marketing managers, brand managers, PR specialists, and account managers are all positions that fall under the broader field of marketing.
- Some companies customize marketing positions according to organizational or market needs.
- Public relations: Public relations (PR) is the practice of managing the flow of information between an individual or an organization and the public.
- stakeholders: A person or organization with a legitimate interest in a given situation, action or enterprise. It can range from employees and investors of a company to the customers purchasing from the company.
- customer relationship management: Customer Relations Management (CRM) is concerned with (among other things) the conversion rate: percentage of customers who “try and buy” the product.
Careers in Marketing
The marketing field provides a wide range of careers for aspiring professionals in areas such as brand management, public relations, and communications. University students major in disciplines like business management, mass communications, and international marketing to prepare for entry- and mid-level careers at corporations, organizations or government institutions. Educational and research institutions—independent think tanks, colleges, secondary schools, etc.—also hire marketing professionals to promote activities and develop brand messaging for their stakeholders.
Types of Marketing Careers
Jobs in marketing reflect the diverse marketing mix and the array of business tools used to address customer concerns and increase brand awareness. Regardless of their role or function, marketers must present information to target audiences; increase consumer and customer demand; and differentiate products against market competition. Marketing positions that support these functions include:
- Field marketing managers conduct promotions in the field. Field marketing is historically thought of as a one-way communication tool. The brand’s message is delivered from promotional personnel to the consumer, by way of a sample, a piece of merchandise, or literature. Today, field marketing may also include two-way communications such as requesting feedback about a sample, or inviting consumers to follow a brand on social media.
- Brand managers develop and promote a brand’s image, experience, and promise to consumers and customers. Brand manager roles touch all areas of marketing, including advertising, design, public relations, internal and external communications, and customer service.
- Public relations (PR) specialists manage the flow of information between individuals or organizations and the public. PR specialists help clients and companies gain exposure to target audiences using topics of public interest and news items that do not require direct payment. Some of the main responsibilities of PR specialists include organizing speaking engagements, positioning companies to win industry recognition and accolades, writing press releases, and developing relationships with analysts and media.
- Advertisers handle a range of functions, including creative services, copywriting, account management, media planning, and media buying. Account managers liaise with clients, while creative directors and copywriters generate key messaging and visual elements for advertisements. Media planners and buyers research the most appropriate online and offline platforms for advertisements.
Other marketing roles commonly found in organizations include marketing communications managers, marketing analysts, marketing and sales assistants, marketing writers, and internal communications specialists. Some companies customize marketing positions according to organizational or market needs. For example, a CRM marketing analyst may focus on customer relationship management systems and analytics, while social media and engagement managers launch and oversee marketing campaigns across different social media platforms.
Marketing as an Entrepreneurial Force
Many firms task their marketing teams to promote a culture of entrepreneurial thinking via initiatives in and outside the organization.
Relate entrepreneurial marketing practices and thinking to a corporate environment
- Intrapreneurship, a form of employee entrepreneurship, represents corporate management styles that integrate risk taking and innovative approaches, as well as reward and motivational techniques traditionally aligned with entrepreneurship.
- Entrepreneurial company cultures can foster innovation and creativity, as well as improve brand differentiation is competitive and crowded markets.
- Organizations can gather valuable industry and marketing data as a result of intrapreneurs’ learning experiences.
- entrepreneurship: The art or science of innovation and risk taking for profit in business.
- crowdsourcing: Delegating a task to a large diffuse group, usually without substantial monetary compensation.
- flash mobs: a group of people who assemble suddenly in a place, perform an unusual and seemingly pointless act for a brief time, then disperse, often for the purposes of entertainment, satire, and artistic expression.
Marketing as an Entrepreneurial Force
The size and scope of marketing efforts is determined by organizational factors, such as budget, people, the supply chain, customers, competition, and external environments. Likewise, marketing can influence various parts of the organization to help drive brand awareness, strengthen market positioning, encourage product innovation and, ultimately, increase sales. Many brands task their marketing teams to promote a culture of entrepreneurial thinking via initiatives in and outside the organization. The American Heritage Dictionary defines this practice as “intrapreneurship.” The practice of intrapreneurship represents corporate management styles that integrate risk taking and innovative approaches, as well as reward and motivational techniques traditionally aligned with entrepreneurship.
While improving marketing effectiveness, marketing strategies also transform ideas into profitable initiatives for the overall organization. Brand differentiation strategies aimed at making products more successful than competitor products and brands can facilitate entrepreneurial behavior that follows the goals of the organization.
Employees often serve as examples for intrapreneurship, and motivate other employees to undertake new or even revolutionary initiatives. Marketing employees, in particular, must constantly be versed in the latest online communications and industry best practices to competitively position brands in domestic and international markets. Likewise, marketers attempt to use innovative and creative promotional elements (e.g., flash mobs, crowdsourcing) to develop clever and relevant campaigns.
The Role of Marketers as Entrepreneurs
Marketing executives or employees engaged in special projects within a larger firm are encouraged to behave as entrepreneurs. These individuals often have the resources, capabilities, and security of an entire corporation at their disposal to execute marketing programs and achieve notable results. Although these “intrapreneurs” may face obstacles (e.g., cultural or fiscal conservatism, lack of research) and experience failures before achieving success, organizations can benefit from valuable data resulting from intrapreneurship. For example, trials and errors learned during a product launch can be used to modify future marketing plans and better utilize organizational resources.
Companies including Google and EM are known to be intrapreneur-friendly, allowing employees to spend a portion of their time to pursue personal projects. Some of these brands also have policies in place to fund these projects, as well as create an innovation-friendly atmosphere and intrapreneurial reputation in the marketplace.