PLAN POSITIONINGElaboration 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

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.

Social enterprise marketing

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.

Essential definitions

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?

Marketing plan

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.

Strategic 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 goal of marketing

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

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 research 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 face-to-face conversations with past and potential customers

Marketing reserach vs market research

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 the 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).

Market segmentation

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.

Positioning 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; “cost-oriented” pricing (typically used to achieve a specific profit margin or return on investment; and “psychological” pricing (e.g., discounts and flexible payment plans).

Pricing strategies

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.  

Distribution channels

There are 3 types of audience:1 – The end-user of the product/service2 – Intermediaries, who operate between the producer and the end-user3 – Stakeholders who may have no direct interest in the product but who havean 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 targetaudience so that they pull products through the marketing chain. This demand maybe for products and information. An individual approaching a retailer for a productthey have seen advertised on TV and an Internet user searching for product detailson 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 theintermediary to push the product along the marketing chain by stocking it, displayingit or advocating it.

Tools – revolve around relationships, personal selling and account management willbe central to this approach

Communications strategy

Profile strategy – aimed at stakeholders and seeks to influence their perceptions ofthe 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 marketingcommunications mix that you are going to use to implement the marketing communications strategy.

Communications strategy

The elements of the marketing communications mix include:

1. Advertising2. Sales promotion3. Personal selling4. Public relations5. Direct marketing6. Sponsorship7. Exhibitions8. Events9. e-marketing

The Marketing Communications Mix

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 campaignSet the budgets for the campaignSelect mediaTest and develop advertisingImplement and schedule the campaignEvaluate the campaign – this should inform you as to whether the campaign wasa success or failure

1. Advertising

Sales promotion can be used for:

Changing short-term behaviour in consumers, retailers and stockistsEncouraging different and increased usage of your product/service

Advantages:

Can be relatively quick and simple to organiseInexpensiveShould successfully alter behaviour

Disadvantages:

Behaviour change is likely to be short-term onlyCan lead to a drop in sales after promotion is over

2. Sales promotion

Can be used for:

Business to business product/service sellingNew product launch

Advantages:

When long-term relationships develop, they can be very lucrativePersonal selling allows for more complex products/services to be demonstratedand explained

Disadvantages:It is expensive and time consuming, with each sales call being very costly

3. Personal selling

Can be used for:

Profile raisingLobbying and campaigningNews announcements, for example a new project being undertakenNew product launchCrisis management

Advantages:

Can be cost effectiveCan achieve multiple objectivesCan be targeted at specific publications

Disadvantages:

Using an external agency may be required if a large-scale campaign is plannedOnce 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

4. PR- Public Relations

Can be used for:

Product launchesProfile raisingBrand development

Advantages:

The sponsor-sponsee relationship should ideally be win-win, with each partygaining from their association with the otherProvides the opportunity to develop a long-term relationship

Disadvantages:

If either party suffers bad press coverage it could affect the otherSponsorship can be a more long-term, profile-raising activity – only a disadvantageif company expectations do not reflect this

5. Sponsorship

Can be used for:

Product launchesSales promotionsRelationship managementMarket research

Advantages:

Allows very specific targeting on individualsIt can be easier to monitor response rates than other methods

Disadvantages:

Direct Mail can be perceived by the recipient as a nuisanceThere are rules and regulations which may make it more difficult to employ directmarketing techniquesAn increasing number of people are choosing to opt out of receiving unsoliciteddirect mail

6. Direct marketing

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 ableto see familiar themes running throughout them, whether that is the branding, thepromotional messages or the ‘look and feel’ of the pieces.

Integrated Marketing Communications