Marketing In The Private, Public And Not For Profit Sectors

Marketing is key to any company or organisation, whether that be in the public, private, or non-profit sector. Marketing identifies what customers or potential customer, needs and wants, and it is within this essay this will be focused on within the three sectors. This essay will address how the three sectors use marketing to their advantage and what theories and models they use in order to come to a successful, well planned outcome.

What is marketing?

Marketing is essential to any business or organisation as it links the functionality of them with customer needs and wants. It is not the 'selling' or a product, it is the function of 'identifying' a product. It is essential to understand what the 'right' products are at the 'right' time. The Chartered Institute of Marketing recognise that marketing is 'the management process responsible for identifying, anticipating and satisfying customer requirements profitably.' (The Institute of Marketing)

Marketing within the modern day, is recognised as the 'digital age of marketing' (Hall, 2009) Hall recognises that there are a number of different sectors to marketing especially focusing on the importance of social media, push strategies and consumer feedback. Hall also states that we, as the public, are inundated in the present day by in excess of 3000 advertisements and marketing strategies on a daily basis from a variety of different sources and companies.

How marketing is used

Market Research

Marketing has a wide range of channels and groups within it in order to accurately execute a marketing plan. This could be though a variety of channels such as blogs, social media like Facebook and Twitter and market research to specific target audiences.

Market research is particularly important in the beginning of a marketing strategy in order for companies to identify customer ideas, opinions, needs and wants. It enables businesses and organisations to gather relevant information in order to enhance a product or idea to reach and appeal to the biggest of its target audience. This research is broken down into two type; quantitive and qualitative analysis in order for a clearer picture of the next step can be taken.

Diagram: to show the three parts of marketing to begin research into customer needs and wants

Marketing Mix The Four P's could be seen as the platform for all marketing strategies, also known as the marketing mix and they include:

Price: this part is where an RRP or variable amount that a product or service would be designated to cost. It's at this stage marketers may look at competitors with similar products of services, to ensure they have a good and attractive price for potential or existing customers.

Place: this is crucial if you know your target audience. Marketers will ensure that the place where there it is inevitable that interest can be generated within their target market. 'Place' takes into account the different distribution channels available in order to maximize sales, interest, support, profitability or funding.

Product: this part is what you are selling or promoting and why. This could include its packaging, advertisement, brand, services included, warranties, value for money, attractiveness and its value within its chosen sector.

Promotion: this part is crucial in order to gain interest from the researched target audience. This would include advertisement, sales promotions, sales channels, social media, the 'face' of a product such as a celebrity and websites. The idea of 'calling a marketing executive a "mixer of ingredients" one who is constantly engaged in fashioning creatively a mix of marketing procedures and policies in his efforts to produce a profitable enterprise' (Borden, 1965) has been built on over the years since Borden outlined the Four P's and can now also include people, process and physical evidence. Some may see the basic Four P platform as being a little dated since Borden wrote his book in 1965, and that in the modern day, the 'marketing mix' needs added values to include the way in which company and organisations now operates.

The market research carried out, particularly within a company or organisations target audience is key, in order to generate a basis for the 'marketing mix,' as this enables the marketing team to assess what 'parts' are really important in order to achieve the best possible outcome. This enables a 'tactical delivery' of the suitable product which has been assessed and criticized in the best possible way to achieve this outcome. Marketing Planning

Marketing planning is key to achieve a well thought out, dynamic and successful strategy. It may not always be possible to follow a step by step plan in order to achieve what aim is set, however certain aspects should be addressed at some point during the plan. Diagram: (Google - SMSHawaii - Market, 2011)

This diagram is an example of the steps required to execute a successful marketing plan, showing that even when the end product or result has been achieved, there is an opportunity for this to be evaluated and built on. This diagram addresses the amount of organisation and communication with internal and external sources, in order to achieve a final outcome. It is within these steps that analysis such as SWOT may come into play, to outline to company or organisations strengths, weaknesses, opportunities and threats, which are then addressed whereby targets are set. Following any evaluation targets can then be reset and Gap Analysis during this process can be undertaken, to evaluate if the company are on track or not. An overview of the three sectors

Private Sector

The private sector is a profit fuelled sector which is not reliant on funding from the state however it can have funding from private investors who may take an interest in the company or organisation. This interest is generated through PR and marketing, which go hand in hand, in order for the company to build a good reputation, create well thought out and researched products which generate interest, thus leading to investors and publics supporting or privately funding the company. The private sector includes retail outlets, restaurants and banks. An example of a private sector business would be Topshop, a business owned by the retail giant Arcadia, who own over 2,500 stores across the country. As stated in Arcadia's annual report, Topshop is the 'fashion destination on the UK high street.the brand has become a fashion phenomenon and is synonymous with cutting edge fashion at affordable prices.' (Arcadia, 2011) This descri ption of the brand sets its place in the market of 'who we are' and the responsibility report states its aims for 'who we want to be.' This shows where the company is, and where it wants to be known as Gap Analysis, a way in which marketers for Topshop can decide upon objectives and tactics in order to achieve their goals.

Within the private sector, a Gap Analysis is where the company are and where they want to be. This could be in relation to profits or sales which have been forecast within an annual report, but upon reflection within the period of time they have set themselves this goal, this has become difficult to achieve. This is what Topshop have reported on within their annual report which focuses a great deal on being marketed as a 'ethical' company. It is within their report they have stated they have a 'larger proportion of factories that have orange-graded audits than we would like. It is difficult to keep up the momentum for progress within three months which is the timescale we aim for' (Arcadia, Arcadia Reponsibility Report, 2011) showing that Topshop have recognised the gap that they had aimed to successfully close which is, however, proving difficult in their aim to become and be seen as ethically sound, including on an international basis.

A way in which a brand such as Topshop encourages interest in their products is through the communication model AIDA. This model could be seen as being used all over the retail business as it is driven by a 'desire' and a 'want.' This is through a number of different channels such as visual merchandising, store layout, targeted times for buying products, discounts and store cards. This model is a strategic plan of action to increase profitability and encourage their target audiences to buy; a model specifically shaped for the private sector in terms of 'wants.'

A - Grabs your attention Topshop uses this part of the model in a constructive way through visual merchandising to grab their target audiences eye, through use of celebrities such as Kate Moss and her line of clothing and sets the platform for the 'cutting edge fashion' they boast to have.

I - Raises your interest Topshop use their target audience to their advantage in order to make the most profit and certain times of the year. To raise and encourage interest this would include student discount times whereby the company set out to appeal to the 18-30 year olds just as they receive their student loans. They also do 'lock ins' and late night shopping on certain evenings to appeal to those people who work late and want to have the opportunity to shop with them.

D- Appropriates a desire At this stage the product needs to become 'desirable' and a 'want' not necessarily a 'need.' This could be through how products are strategically placed together in the stores, in line with matching garments or on manikins to show the 'desirable' product on.

A - Results in action It's at this stage action is taken. The target audience's attention has been grabbed, interest has been taken and a desire has been made, which leads to a purchase.

Public Sector

The public sector is reliant on funding from the government in order to function adequately. The public sector includes what we would consider as 'public services' such as the National Health Service, public schools and local authorities. Marketing within the public sector does not necessarily focus on a 'product' but can be more on a service that is being offered or advise that is being target towards a certain group. This could be on a national or local basis, and how it may affect the organisation as a whole or possibly only an immediate small group within a community.

For example on a national scale, the NHS has pursued a number of marketing strategies to increase public awareness and support, to enable the 'public' to help them. This includes the most recent 'Change for Life,' a strategy by the Department of Health to help reduce obesity in England. When designing this program the Department of Health and its agencies have 'drawn on academic and commercial sector expertise, behaviour-change theory and evidence from successful behaviour-change campaigns in other categories (particularly tobacco control). The Department of Health has also commissioned a substantial and ongoing programme of research among the target audiences.' (NHS - Change 4 Life, 2009) In order to promote this programme, the NHS did an advert to generate interest, which was shown at peak times after 4pm in order to reach its target audiences, specifically when children were home from school. The programme also set up a website, promoting healthy eating and activities available in communities. This shows a national campaign also being narrowed down to local areas to support and encourage healthy eating and an active lifestyle within all communities. 'Change for Life' are also available to access through social media such as Twitter linking in the varieties of different channels marketing now goes through in the present day. The program outlines their target audience as being pregnant women and families with children under the age of ten years old. The program then uses a marketing term known as 'segmentation' in which the NHS separates these target groups into three clusters:

Picture: (Change 4 Life - Segmentation Study, 2009)

Segmentation is defined as the 'process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment' (Business Dictionary - Marketing Segmentation, 2011) Segmentation enables the marketer to address a particular target audience and fulfil their needs and wants in line with their product or information. This enables them to better match customer needs, instead of trying to target everyone as a whole which may only 'skim the surface.'

The 'Change 4 Life' program is an example of segmentation in action which has identified the key target audiences as being soon to be mothers and families with children under the age of ten. This indicates their healthy eating scheme and aim to reduce obesity is being targeted at the root of the problem in order for children to grow up healthy rather than change an adult who has already cemented their way of life in terms of how they eat. They have identified the certain characteristics of the target families in order to segment them and deal with their needs in different ways.

Not for profit sector

The 'not for profit' sector includes groups which are neither run or funded by the government, or set up in order to produce products thus increasing profit margins. The 'not for profit' sector are specifically charities and community groups, who are set up to give aid, help and support to others and may have private donations through stakeholders given to them. A lot of 'not for profit' organisations depend on themselves and their marketing planning to the general public to encourage support. Within the UK, charities and other non-profit organisations do not have shares or shareholders.

An example of a well know charity within this sector is Save the Children, a organisation who solely work to ensure that children around the world, particularly in improving countries, have the best possible start in life. 'We run world-class programs to save children's lives and we challenge world leaders to keep to the promises they've made to give children a brighter future.' (Save the Children - What we do, 2011) The charity tries to ensure children have access to clean water, a good health system, education and who are helped if and when there is an emergency such as an earthquake or flood in their community.

Although the organisation relies much on donations from the public and from private donations, the organisation does receive a donation from the government too. This does not mean it is funded by them, but the work they do is recognised by the government and the European Commission who then donate a certain amount a year.

Within 2010, the charity generated £291.5 million and this graph shows how this money was spent within the charity. The way in which the non-profit sector works, it could be seen as using the AIDA model in order to generate interest. This does not necessarily mean a 'desire' in the same way as the private sector, perhaps within retail, does; but instead the way in which Save the Children and other charities 'promote' themselves and 'market' themselves to the public is quite a 'to the point' approach.

We can see from advertisements for this charity that the organisation work on building an interest, telling a story, showing shocking but true pictures and this encourages people to donate money, in much the same way as AIDA is structured.

Conclusion

Although the marketing structure for public, private and non-profit sectors may vary, there are similarities which link them quite closely together. Porters 5 Forces model shows competition, rivalry and the threat of other products within any industry, whether that be public, private and non-profit sectors.

For example, as Topshop the example for the private sector business could be seen to be able to relate to this model. Topshop, although boasted in its annual report for being the 'fashion destination on the UK high street' this does not necessarily take away from the fact there are competitors out there such as Primark and boohoo.com who will also attract the market Topshop want with 'substitute products' at a cheaper rate.

This model could also work within Save the Children, although a completely different organisation in terms of the other charities around the world who are doing similar work to enable children to have a good start in life. This kind of competition may work in a different way to the private sector competition driven by profit, but it is similar in the way that no matter what sector competition is important.

Both the private and non-profit sector, particularly, can relate the current economic climate where people have less money to spend having a knock on effect to both sectors; private sector in terms of less people buying and the non-profit sector in terms of less people donating.

This shows that although there are differences in terms of planning executing marketing strategies, the effect of customers, suppliers, competition and other products affect all three sectors in similar ways.