PLAN POSITIONING Elaboration of the marketing mix and

PLAN POSITIONING Elaboration of the marketing mix and positioning plan for your idea

“An idea is like a play. It needs a good producer and a good promoter even if it is a masterpiece. Otherwise the play may never open; or it may open but, for a lack of an audience, close after a week. Similarly, an idea will not move from the fringes to the mainstream simply because it is good; it must be skillfully marketed before it will actually shift people's perceptions and behavior. ” ― David Bornstein, How to Change the World: Social Entrepreneurs and the Power of New Ideas

Social enterprise marketing � � Every type of business, both social and traditional, has many types of customers; however, typically in traditional businesses, the paying customer makes the purchase decision. In the case of social enterprises, the customer who buys the product or service may often not be the ultimate consumer (or target customer) of the product or service. The decision-maker on the product or service is likely the party paying for it (the payer) and this may be the government, a foundation, an individual or other third party such as a funder. The customer who consumes the product or service (the participant) will likely have access to the product or service at no cost or a lower than market price through the payer. This added customer profile means that your marketing strategy and planning will be slightly different from traditional businesses.

Essential definitions � NONPROFIT ENTREPRENEUR: An individual who pays increasing attention to market forces without losing sight of the nonprofit’s underlying mission. � SOCIAL ENTERPRISE: Any organization, in any sector, that uses earned income strategies to pursue a double bottom line or a triple bottom line, either alone (as a social sector business) or as part of a mixed revenue stream that includes charitable contributions and public sector subsidies. � SOCIAL ENTREPRENEUR: Any person, in any sector, who runs a social enterprise. � SOCIAL ENTREPRENEURSHIP: The art of simultaneously pursuing both a financial and a social return on investment (the double bottom line).

Essential definitions � DOUBLE BOTTOM LINE: The simultaneous pursuit of financial and social returns on investment – the ultimate benchmark for a social enterprise or asocial sector business. � TRIPLE BOTTOM LINE: The simultaneous pursuit of returns on investment in three areas – financial, social and environmental.

Marketing plan Development of a marketing plan begins with the answers to five questions, and all of marketing takes place in the gap between the answers to questions four and five: � What must happen for the organization to be successful? � Who must be involved? � What must they do? � What must they believe before they will do it? � What do they believe now?

Strategic marketing � Once an organization has answered its key strategic marketing questions, it must adopt whatever tactics are necessary to sway its clients, customers and other stakeholders. � The four tactical marketing weapons are known collectively as the marketing mix: “Packaging” (product or service design), pricing strategies, distribution channels and marketing communications.

The goal of marketing The goal of marketing, therefore, is to win a share of client, customer or stakeholder mind, and the people being targeted must be led through four stages: � Awareness (getting their attention) � Understanding (making sure they comprehend what the organization is saying – and what it is not saying) � Credibility (do they believe what the organization is saying? ) � Persuasion (in the light of equally credible claims from others, will they do what the organization needs it to do? )

The marketing team will need to develop appropriate positioning strategies and use a variety of tactical marketing weapons to guide its clients, customers and stakeholders through the process. However, there are four major obstacles to creating a successful marketing plan: � Lack of commitment by senior management � No written plan � Failure to involve the people charged with carrying out the plan � A lack of quantified objectives

Marketing research vs market research � � Unlike market research, which investigates the viability of a specific product, service or market segment, marketing research evaluates the effectiveness of an organization’s packaging, pricing, distribution and marketing communications strategies If a social enterprise starts with its current products and services and then tries to find somebody willing to pay for them, it will be trying to push itself into the market. However, if the business starts with its potential customers, discovers what they need and are willing to pay for, and then builds it, the customers will pull it into the market and significantly increase its chances for long-term success. The preferred approach, therefore, is to begin the process with thorough market research. However, if a business is introducing a product or service that has never been offered before, then the research may not be conclusive and market push might be the only alternative.

Marketing reserach vs market research � Market research: Intelligent decisions about what products or services to offer and what target markets to pursue can only be made after thorough research, which typically occurs in two stages: � Secondary research is designed to gather as much information as possible from existing documents (such as articles, brochures and reports) � Once the list of possibilities has been narrowed by secondary research, primary research consists of faceto-face conversations with past and potential customers

Market segmentation The first step in market research is market segmentation. The next steps are to answer a series of questions about each segment: � � � How many people in the segment actually need the product or service, regardless of their ability to pay? And how critical is their need? What are the critical success factors associated with designing, developing and delivering the product or service for this particular segment? What environmental forces will play a role? Will they be positive or negative? How helpful or damaging will they be? Do we have the capability to capitalize on the opportunities and mitigate threats? Who are the primary competitors? How do we rank against them in terms of critical success factors and environmental forces? Can we win? What is the potential size of the segment in terms of dollars? And what is the opportunity within the segment? Is it growing, remaining flat or declining? How much has been exploited? How much of the competition’s share is vulnerable? What are the fixed and variable costs? Will we make a profit or lose money? How much?

Market segmentation � � � Every business has both a “subject” and a “predicate” – a specific product or service aimed at one or more specific target markets for example, “tutoring services for potential high school dropouts” or “computer training for men and women on welfare”). Dividing mass markets into smaller components is called “market segmentation” The criteria for dividing a consumer market could include such things as geography (e. g. , nations, states, regions, counties, cities, neighborhoods, climates); demographics (e. g. , age, income, gender, marital status, family size, occupation, education, income, nationality); psychographics (e. g. , customer lifestyles, activities, interests, social class, personality characteristics, political leanings); or the way customers behave toward a specific product or service (e. g. , frequency of purchase, sensitivity toward price, levels of desired quality, and so on).

Positioning strategies � � The tools an organization uses to differentiate itself from its competitors in the minds of its clients, customers and other stakeholders. Each organization must develop an overall positioning strategy and complementary strategies for each of its programs, products and services. At the overall level, success or failure begins and ends with the organization’s image, and every organization has one whether it wants to or not – the only question is whether it will help shape the image (marketing plan) or leave the shaping to others. The stakes are high: A positive image enhances employee morale, gives donors additional confidence, improves community relations, lowers the cost of sales, makes higher prices palatable, speeds market penetration, builds customer loyalty, and enhances recruitment of employees.

Pricing strategies � One of the four parts of the marketing mix. � The most common pricing strategies are “penetration” pricing (typically used when introducing a new product or service or to build market share); “prestige” pricing (to establish a reputation for quality); “value” pricing, which rises or falls according to market demand; “costoriented” pricing (typically used to achieve a specific profit margin or return on investment; and “psychological” pricing (e. g. , discounts and flexible payment plans).

Distribution channels � � � One of the four parts of the marketing mix. Distribution channels are the routes products and services travel from the provider to the receiver. There may be intermediaries along the way (individuals or institutions) that must be compensated as part of a company’s distribution costs. Distributor relationships occur when either a commercial company or a nonprofit channels its products or services to customers through the other’s network. A common example in the United States takes place when commercial companies partner with nonprofits to access federal and state “set-aside” programs (in which government contracts are offered first to nonprofits). It is one of the four most powerful types of strategic partnerships between a commercial company and a nonprofit.

Communications strategy � There are 3 types of audience: 1 – The end-user of the product/service 2 – Intermediaries, who operate between the producer and the end-user 3 – Stakeholders who may have no direct interest in the product but who have an interest in the organisation itself � Different communication strategies are required for each audience.

Communications strategy � Pull strategy – aimed at the end-user. Seeks to create demand through the target audience so that they pull products through the marketing chain. This demand may be for products and information. An individual approaching a retailer for a product they have seen advertised on TV and an Internet user searching for product details on a company web site and are both examples of pull by consumers. � Tools – personal selling, expos, trade ads, web sites, PR, direct mail.

Communications strategy � Push strategy – targeted at intermediaries. Push activities aim to persuade the intermediary to push the product along the marketing chain by stocking it, displaying it or advocating it. � Tools – revolve around relationships, personal selling and account management will be central to this approach

Communications strategy � � Profile strategy – aimed at stakeholders and seeks to influence their perceptions of the organisation, e. g. , communications about the business financial performance, ethical stance or community involvement. Once you have decided on your product strategy, the market segments you wish to target, your positioning and communications strategies, you can then look at the tactics of your marketing communications plan; that is, the elements of the marketing communications mix that you are going to use to implement the marketing communications strategy.

The Marketing Communications Mix � The elements of the marketing communications mix include: 1. 2. 3. 4. 5. 6. 7. 8. 9. Advertising Sales promotion Personal selling Public relations Direct marketing Sponsorship Exhibitions Events e-marketing

1. Advertising � You can use advertising to: Raise awareness Educate the market Persuade the market � It is vital that you know what you are trying to achieve: Are you launching a new product? Are you defending your market position against a new competitor? Do you want to remind people about your market-leading product? You must: Define your target audience Decide on the objectives for your campaign Set the budgets for the campaign Select media Test and develop advertising Implement and schedule the campaign Evaluate the campaign – this should inform you as to whether the campaign was a success or failure �

2. Sales promotion � Sales promotion can be used for: Changing short-term behaviour in consumers, retailers and stockists Encouraging different and increased usage of your product/service � Advantages: Can be relatively quick and simple to organise Inexpensive Should successfully alter behaviour � Disadvantages: Behaviour change is likely to be short-term only Can lead to a drop in sales after promotion is over

3. Personal selling � Can be used for: Business to business product/service selling New product launch � Advantages: When long-term relationships develop, they can be very lucrative Personal selling allows for more complex products/services to be demonstrated and explained � Disadvantages: It is expensive and time consuming, with each sales call being very costly

4. PR- Public Relations � Can be used for: Profile raising Lobbying and campaigning News announcements, for example a new project being undertaken New product launch Crisis management � Advantages: Can be cost effective Can achieve multiple objectives Can be targeted at specific publications � Disadvantages: Using an external agency may be required if a large-scale campaign is planned Once the message has left your organisation, you have no more control over it. It can be interpreted and reported by journalists in a positive or negative way. It may not be picked up by the press, which you have very little control over

5. Sponsorship � Can be used for: Product launches Profile raising Brand development � Advantages: The sponsor-sponsee relationship should ideally be win-win, with each party gaining from their association with the other Provides the opportunity to develop a long-term relationship � Disadvantages: If either party suffers bad press coverage it could affect the other Sponsorship can be a more long-term, profile-raising activity – only a disadvantage if company expectations do not reflect this

6. Direct marketing � Can be used for: Product launches Sales promotions Relationship management Market research � Advantages: Allows very specific targeting on individuals It can be easier to monitor response rates than other methods � Disadvantages: Direct Mail can be perceived by the recipient as a nuisance There are rules and regulations which may make it more difficult to employ direct marketing techniques An increasing number of people are choosing to opt out of receiving unsolicited direct mail

Integrated Marketing Communications � What is important to remember is that all activities should complement each other – they should work as a ‘family’ of communications so if someone were to look at, for example, an advertisement, a direct mail flyer and your website they should be able to see familiar themes running throughout them, whether that is the branding, the promotional messages or the ‘look and feel’ of the pieces.