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The product marketing mix

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How to market your organisation's product, whether it be goods, services or ideas.

Your product

Your offering is what you deliver to your customer. Marketers call this the 'product'. There are three main types of products:

  • physical goods such as adapted computers for disabled people or Christmas cards for fundraising
  • services such as sea rescue or voluntary visiting to older people
  • ideas such as campaigning to reduce carbon emissions or fundraising through direct mail for money to help African farmers.

While most products are dominantly either a physical good, service or idea, if they are to work well then they need to include all three elements.

The marketing mix: four Ps

The marketing mix is integral to building a new service or campaign or fundraising product. It also plays a central role in reviewing an existing product to make sure it is effective.

In 1964 Neil Borden, a professor of advertising at Harvard Business School, said that building a product (good, service or idea) is a bit like baking a cake. Borden said that the secret is making sure you have all the right ingredients for it to be really satisfying. He defined four essential elements for the marketing mix, sometimes called the 'four Ps':

Product

The product itself, its quality, its features, the benefits which it brings. These need to be defined from the customer's perspective and you need evidence that this is what they really want, not simply what you think they need and ought to have.

Price

The price the customer has to 'pay'. This sometimes seems unnecessary in the non profit setting but this is wrong. We have open pricing on many of our activities eg membership fees, charges for some services, priced fundraising products such as "£4 will restore someone’s sight in India" or "£5 for a pack of Christmas cards". Getting the price right is crucial.

In addition, many of our products have hidden prices which you need to recognise and try to reduce. For example, for a newly disabled person, the 'price' of leaving the support of their family to go away on a six week residential rehabilitation course may be too high to pay. This 'price' can be lowered by providing transport home every weekend.

Promotion

The promotion of the product is how you let customers know your product is available, for example through advertising or PR. .

Advertising is one of the most effective ways but is normally costly in the quantities required. But even the smallest non profit can get coverage in the local press. Don’t forget the importance of encouraging word of mouth promotion. It is reckoned that 50 per cent of customer recruitment is through word of mouth.

Place

The place, that is where you distribute your product to your customers. You are likely to use a wide range of 'places' to distribute your activities For example, in fundraising there is direct mail, press and radio adverts, street and house-to-house collections, fundraising dinners, telephoning and face to face.

Many of these are useful in campaigning, but you can also use direct action such as carrying banners at the town hall and organising flash mobs, or more sedate methods such as petitions and delegations.

For services you can deliver them residentially or direct to people homes, using specialist paid staff or trained volunteers, by post or by email, etc.

Three extra Ps for service marketing

The four Ps are a really useful checklist of 'things to get right' for a physical good such as a wheelchair, an adapted computer or a low tech irrigation system. But in non profits, as in the commercial economy, services dominate.

Marketing researchers Booms and Bitner added these extra Ps to the marketing mix for services.

People

People refers to the knowledge, skills and values of the people delivering the service, but also the customers and how they interact if the service is delivered to a group, for example in an old people's home.

The knowledge, skills and values of your service deliverers are crucial to good quality. A service is produced and consumed at the same moment, unlike physical goods which can be quality-checked before it reaches the customer.

Your staff and volunteers need training and need to be empowered to change the service (within limits) on the spot if customer expectations are not being met. Where services are delivered to groups the membership of these groups needs to be thought through. If they contain people with a wide range of needs, none may be satisfied.

Physical evidence

Physical evidence refers to what's used to promote and run the service, for example the quality of the promotional leaflets, the appearance and cleanliness of the rehabilitation centre.

Services are quite abstract and it is difficult for customers to judge real quality. Good physical evidence is likely to make your customers feel they are getting a quality service. Bad physical evidence will make them feel the service is bad even if it is good! For example it is hard for the potential customer to imagine a service will be good if it the descriptive leaflet is poorly written, designed and printed.

Processes

Processes refer to what the customer has to go through, for example how easy is it to register for the service, pay for it, find out about it in advance or get a vegetarian meal.

An example of a good customer-focused process comes from RNIB, which was one of the first charities to bring in credit card payments over the phone. It is much easier for a blind person to read out a credit card number than to listen to a tape-recorded invoice and then write a cheque and address an envelope to post.

An additional P for nonprofits

In the 1990s I added an eighth P particularly for non profits:

Philosophy

Philosophy because non profits nearly always have a philosophical/values base to what they are doing which is consciously and openly known and needs to be embedded in all the activities.

If you are a small organisation with only a few volunteers and staff, your philosophy and values may simply  be 'the way we do it round here'. But as organisations grow and units become more separate, 'different ways' develop and this can cause products within an offering to become inconsistent.

A working example

A practical example of the marketing mix in action might be as applied to a residential home for older people. To be effective you need to decide the following details:

  • what service you are delivering, for example whether or not you welcome people with dementia
  • the price you are going to charge
  • how you are going to advertise and promote the home
  • where you are going to build it or buy it
  • how you are going to recruit and train your people ie the staff
  • what features (physical evidence of quality) the home is going to have, for example ensuite with bath and shower
  • what processes you will set up to make it easy for people to try out your home, claim state benefits to help with payment, make the payments etc
  • the philosophy you will be adopting, for example is it primarily one of empowerment of the residents or care for the residents.

The points of the marketing mix in this example may seem like common sense and they are. But you would be amazed how few non profits rigorously review all the elements of the marketing mix and decide on the best tactical options and choices available. 

Page last edited Apr 13, 2017
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