Download Marketing Strategy for Non Profits in Developing Economies:Volunteer Market Segmentation:

Marketing strategy for Non‐Profits in developing economies: Volunteer market segmentation SHUBHANK GOSWAMI , MADHUR MAHESHWRI and MANSI DHIMAN
1
1
1
Department of Civil Engineering
Indian Institute of Technology, Delhi
Hauz Khas, New Delhi, India – 110016
E-mail: [email protected]
1
Extended Abstract
In many developing countries, the Non Profit Organisations primarily focus on donors and
customers only. Not much focus has been laid on developing a marketing strategy to target
the volunteers which can lead to its best possible functioning. Significant research has been
done on what motivates a volunteer to work and to categorize volunteers into similar groups
to look for inter NPO substitutes of different volunteers, but there is a lack of an appropriate
model that collectively studies the various factors motivating a volunteer to map them up to
the socio-segmentation background and work to develop a marketing strategy for volunteer
recruitment, training and retention specifically for the Indian NPO sector.
This paper aims at developing a multiple factor-socio segmentation framework that can be
used directly to develop the marketing strategies of Indian Nonprofit organizations.
Correlation between the factors (altruism, incentives, networking, ethics, community benefits
and affiliation needs) and the segment (age, gender, qualification, income, employments
status and city) of the volunteers has been calculated using statistical analysis and the factors
as per different sectors or different segmentations have been prioritized. The paper aims at
assisting the managers of the NPOs all across the globe to develop a marketing strategy
based on the segment of volunteers it want to focus.
Over 500 responses covering various demographic segments were recorded of a survey, with
‘Altruism’ being the most prominent motivation across all the segments. The second most
opted motivation was ‘Communal benefits’ followed by ‘Networking needs’.
Keywords: Non Profit, Volunteers, Marketing strategy, Segmentation
INTRODUCTION Apart from the public and private sector, the world has experienced a sudden expansion of the
Non- Profit sector in recent decades .However, the increase in the number of these third sector
organizations has not been accompanied by an equal growth in the availability of human and
financial resources. This has led to an increase in competition for the limited resources available
and as such organizations are being forced to try to attract volunteers not only from the general
public but also from other volunteering organizations. The non-profit sector in India includes 1.2
million such organizations which involve as many as 19.2 million people many of whom work
on a voluntary basis (Srivastava and Tandon, 2005). India was not able to collect information
about Non Profit Institutions (NPI’s) in the first three censuses as there was no specific code for
identifying them. For the first time in the 4th Economic census, 1998, NPI’s were identified. In
the 5th Economic Census, 2005, they were defined in a structural operational way- “Non-profit
institutions are legal or social entities created for the purpose of producing goods and services
whose status does not permit them to be a source of income, profit or other financial gain for the
units that establish, control or finance them. In practice, their productive activities are bound to
generate either surpluses or deficits, but any surpluses they happen to make cannot be
appropriated by other institutional units.” Their related information was obtained and it was
found that NPIs were in the following activities in that order: (i) Community, Social and
Personal Services (ii) Trade (iii) Education (iv) Health and Social Work (v) Manufacturing (vi)
Hotel and restaurants, etc. (GoI/Ministry of Statistics and Program Implementation, 2009)
Volunteerism is an integral part of all communities. Its expression, definition and understanding
vary according to history, politics, religion and culture of a country. Sometimes in India
volunteerism is seen as low paid or labor intensive as compared to other countries. But is
volunteerism really important? Volunteerism creates opportunities for different people for
bringing a positive change regardless of their background like religion and socio economic
status. As such there are no specific laws and legislations which regulate volunteerism in India.
The National Policy on the Voluntary Sector, adopted in May 2007, pledges to encourage, enable
and empower an independent, creative and effective voluntary sector, with diversity in form and
function, so that it can contribute to the social, cultural and economic advancement of the people
of India. It constitutes the beginning of a process to evolve a new working relationship between
the government and the voluntary sector, without affecting the autonomy and identity of
voluntary organizations (GoI/Planning Commission, 2007).
Recent years in India have witnessed an upsurge of such voluntarily established organizations.
These institutions are involved in almost all human causes, eg education, sanitation, health,
environment, looking after the elderly, emergency situations, the destitute and orphans, people’s
movements. The major chunk of this sector consists of institutions established since the 1970’s
(Srivastava and Tandon, 2005). However, little research has been done in this sector in India in
the area of marketing. Marketing by the NPO’s is most of the times related to only fund raising.
In fact most of the NPO’s in India have wrong notion of marketing. They don’t realize to adopt a
separate marketing strategy for the three different sectors namely customer, volunteer and donor.
These marketing strategies are not well developed to meet the overall goal of a NPO. Because
NPOs are not motivated by the financial bottom line, these for-profit strategies fall short in
helping NPOs reach out to their three main marketing focus areas: clients, volunteers, and donors
or funders (J.A. Pope et al.,2009). Most of the time, the only objective of marketing by these
NPO’s is to attract the donors. But maximum activities of these organizations are completely
dependent on volunteer involvement. However, it is often difficult to find the right volunteers for
the right tasks at the right organizations.
Despite the growing interest in marketing, many nonprofit organizations still resist it. Many
groups within these organizations see marketing as a threat to their autonomy or power.
Eventually, out of necessity, marketing ideas will filter into these organizations. Marketing will
initially be viewed as advertising and promotion rather than as a revolutionary new way to view
the institution and its purposes. A few institutions will lead the others in developing an advanced
understanding of marketing. (Kotler, 1979)
The main challenges of the volunteer sector in India are, to formulate and execute the
volunteering activities to result in a purposeful result, to sustain the motivation, improve
opportunities and scope for the existing volunteers and to attract more volunteers. Most of the
times, NPO’s don’t have a well defined marketing strategy for themselves. The organizational
team has exorbitant passion but sometimes lack experience and education. In India NPO sector
requires good and professional marketers to remove many misconceptions about them in the
mind of the general public.
A marketing committee if appointed in a nonprofit organization to examine the institution's
problems and look into the potentialities of marketing should have an objective to identify the
marketing problems, the major needs of various administrative units for marketing services and
to explore the institution's possible need for a full-time director of marketing. The organization
should also seek a marketing consultant to carry out a comprehensive marketing audit on the
problems and opportunities facing that organization. The marketing consultant could be someone
affiliated with the institution—such as a marketing professor, or a board member who is a
marketing specialist. A professional marketing consultant can tackle the problem of volunteers
giving less attention than is necessary to the project, and who often lack objectivity. (Kotler,
1979)
Although volunteering usually “involves contributions of time without coercion or
remuneration” the great variety of situations in which people volunteer invalidates such a
simplistic definition (Bussell et al., 2002). Bussell in 2002 had classified the volunteer segment
on the basis of it definition, context, characteristics and motivation. The primary motivation
for many volunteers is the importance placed on certain values. Volunteering may give the
individual the opportunity to express these core values and beliefs or to pass them on to
others. For example, religious involvement and religious beliefs have been shown to be
associated with a greater likelihood to volunteer.
The motivation behind volunteering can be broadly classified into egoistic, altruistic or both.
Egoistic motivation has the ultimate goal of increasing a person’s own welfare like personal
experience, recognition, self esteem and developing one’s own skills (Bendapudi et al., 1996)
Egoistic motivation is driven by selfishness and personal gain. It is aroused by the prospect of
either gaining rewards for helping or avoiding punishments for not helping. Egoistic motivation
reduces personal distress. Altruistic motivation is when donors experience empathy which means
being aware of other person’s internal status. Some examples of altruistic behaviour are giving
back to society, to support an important cause etc. When altruistic and egoistic motivations are
both present in a volunteer, he would be just interested in socializing and networking.
There are 4 important Ms in volunteer recruitment – Management, Marketing, Motivation and
Mission. Present volunteers can be used to attract other potential volunteers. Some motivations
are altruistic; others include fellowship, discontent with primary vocation, personal recognition,
desire for marketable work experience, social interaction, and the lessening of a sense of debt or
obligation. Three important measures for volunteer assessment are effectiveness, efficiency and
productivity. The key point is not to forget that volunteers are indeed “customers” seeking an
exchange with you: their donation of time in exchange for opportunities to achieve their personal
goals. Satisfied customers become loyal customers. Satisfied volunteers become loyal and
productive. (Mitchell and Yates, 2004)
Organisations should analyze their culture and recruit those people whose values match with the
prevalent organisation culture. Socialization process, structured ceremonies and feedback
systems should be implemented. . (Mitchell and Taylor, 2004)
Availability of volunteers decreases at the time of economic downfall, the period when they are
most required. So the organisations need to sell off their volunteer experience for better retention
ratio. During economic downturns, nonprofit organizations can provide specialized training and
development to volunteers. Volunteers must satisfy their social and psychological goals. (Ewing
et al., 2002)
High-contribution volunteers are found to exhibit distinctive socio demographic characteristics,
have a greater number, and broader range, of motivations for volunteering and initially get
involved in volunteering in different ways to low-contribution volunteers. Recruiting high
contribution volunteers also reduces cost, apart from affecting the output of the organization.
(Randle and Sara)
Volunteer managers must understand that people volunteer for their egoistic reasons also, apart
from altruistic motives. There are various stages in a volunteer life, at each stage the marketing
communications strategy needs to be implemented to recruit, retain and reactivate the volunteer.
(Bussell and Forbes, 2003)
It is importance of fun at the work place of a NPO from a volunteer`s perspective (Karl et al.,
2008). Motives identified for volunteering are the feel good factor, need for socialization, a
search for structure and a search for purpose (Michael Callow, 2004).
Developing a Nonprofit Marketing Strategy for the NPOs to gain a broader understanding of
what marketing is and why marketing is important to all aspects of NPO management and
marketing is not equal to fundraising. Selection of board members is important. It is
recommended that NPOs carefully examine the particular skills needed by their businesses and
target individuals with those skills when recruiting new board members. All NPOs—regardless
of the size of their staff and budgets—should develop a marketing plan to reach their various
target markets and include a marketing line-item in their organizational budget. It is important
that NPOs—especially small and local NPOs with limited time and staff—take advantage of the
many resources that are available. (J.A. Pope et al.,2009).
Focused marketing for volunteers in NPOs has been an unexplored ared in most of the part of the
world, especially in India. This paper explores the multiple factors, that a volunteer looks for
before choosing to work for an NPO, and its variation across different segmentation groups like
age, income, educational background etc.
Methodology In this study we have tried to develop a frame work to help the Non-Profits in developing a
marketing strategy for their target volunteer segment. To began the project, we started with an in
depth literature review. It helped us a lot in identifying several important factors of motivation
for volunteering in NPOs. Later, we drafted a survey for volunteers to assess the relative
importance of these factors across the diversified volunteer market. The important factors which
were considered are :- Social servicev (altruistic motives), Incentives, Networking, Ethics,
Community benefits, Family benefits and Affiliation needs. For profiling, respondents were also
asked questions about their demographic characteristics like Age, Gender, Education
qualifications, Locality, Employment status, and Family Income. Respondents were asked to
indicate the top three important factors, which according to them, contribute in their decision to
volunteer. The total sample size was of 96, which was structured in such a way that it included
60 experienced volunteers and 36 unexperienced volunteers; 76 males and 20 females; 37 from
urban cities , 38 from metropolitian cities and 11 from Rural India. Since in India, mostly youth
takes part in volunteering, the sample mainly contains young people, below 35 years of Age. In
this study, Non-Parametric Frequency Test has been used to identify the important factor for
each of the target segment. Later we conducted Chi-square test to see the variation among each
group.
Results: The colors represent the order of importance as a motivation factor for a volunteer to work in an NPO across various segments: Most Important 2nd Most Important 3rd Most Important Segment Incentives Networking Ethics Age Social Service Chi‐square Value 45.51 Below 20 5.361 6.33 20‐35 35‐50 Gender Educational Qualification Family Income Employment Status City 1.15 Community benefits 5.29 Affiliation needs 4.95 Above 50 Chi‐square Value 4.94 Male 1.68 1.15 2.75 .806 .701 Female Chi‐square Value 15.26 12th Pass 13.74 14.39 7.67 2.904 8.39 Undergraduate Graduate Post graduate Chi‐square Value 13.76 4.703 2.93 2.39 5.42 10.17 Less than 1 lakh 1‐5 lakh 5‐10 lakh More than 10 lakh Chi‐square Value 8.98 5.11 4.89 10.25 5.86 9.735 Self employed Service Student Chi‐square Value 4.13 6.98 2.58 7.65 11.21 0.75 Metropolitan Rural Urban Discussion After compilation and analyses of the results by frequency test for non parametric variables in
SPSS we could assess the choices made by people belonging to different age groups, family
income, educational qualification, employment status, city and gender. A large number of people
gave social service as their first preference for a factor of volunteerism. In fact every segment’s
majority opted for social service. This must be due to the great need of social help in India since
past many decades in sectors of rural finance, health, education etc. This is reflected in the
answers by the surveyed as they recognize this prevalent need.
In the segment of age, networking was the most opted choice among the people of below 20 and
35-50 age group, whereas most of the people in 20-25 age groups opted for ethics. Networking
can very well be established as an important factor of the teenage group with the great
advancement of many social networking sites n the past decade. Incentives was another
noticeable preference for the age group 20-25, probably because of the reason that people
belonging to this segment do not have much time for such activities until and unless they get a
return on it.
In the gender wise segmentation, it was observed that males preferred ethics and community
benefits as the factors and females preferred incentives, networking and ethics. Unexpectedly
males have little or no preference for incentives whereas females in India have.
If we categorize the surveyed population on the basis of their educational qualification, again
unexpectedly the undergraduate population, or basically the students prefer ethics and
community benefits as the major factors whereas the postgraduates and graduates prefer
networking and incentives more. This definitely proves that the younger generation in India
before entering the professional world show true altruism and want to help the community.
In the segment of family income, all the age groups have a high preference for community
benefits. The third most preferred factor was networking. Therefore there is nothing specific to
lower of higher income groups as factors for volunteerism.
In comparison to the people in service, students gave community benefits as their preference
whereas the employed ones preferred ethics as the second most important factor. A major
noticeable preference was affiliation needs in students as compared to the employed segment.
People belonging to metropolitan and urban cities give more preference to affiliation needs as
compared to the rural inhabitants who preferred community benefits and ethics as a factor. The
rural residents thus have a more tilt towards being altruistic whereas the urban and metropolitan
want affiliation.
Conclusions NPOs must realize the importance of marketing, specially for volunteers, and place it higher on
their organiational priorities. This study was aimed to develop a framework to help the volunteer
managers in developing relevant marketing strategies for their target volunteer segment.It should
be noted that this study is not without limitations. Our sample size was less, so it might have
affected the generalizability of our results.However there is a scope for future research invoving
large sample size consisting of well diversified data. This study can be further extended by
studying the marketing strategies followed by NPOs in India and can be compared with our
findings to identify the areas of improvement. One can also study the variation of most important
factor with experience of volunteering. For ex. A person may volunteer initially for altrusitic
benefits but as he gains experience, incentives might become an important factor for his
retention. It is also possible that the respondents over rated the importance of altruistic motives.
However, we tried to lessen this error by not asking them the details related to their identity.It is
hoped that this exploratory study will provide for impetus for additional research into how the
identification of various motivational facots can help in ensuring the retention of the valuable
human resource.
References 1. Philip Kotler, “Strategies For Introducing Marketing Into Nonprofit Organizations”,
Journal Of Marketing, Jan 1979, Vol 43
2. Neeli Bendapudi, Surendra N. Singh, & Venkat Bendapudi, “Enhancing Helping
Behavior: An Integrative Framework for Promotion Planning”, Journal of Marketing,
Chicago: Jul 1996. Vol. 60, Iss. 3
3. Dennis B. Arnett, Steve D. German, Shelby D. Hunt, “The Identity Salience Model of
Relationship Marketing Success: The Case of Nonprofit Marketing “, Journal of
Marketing, Chicago: Apr 2003. Vol. 67, Iss. 2.
4. David J. Burns, Jane Reid, Mark Toncar, Cynthia Anderson, and Cassandra Wells, “The
Effect of Gender on the Motivation of Members of Generation Y College Students to
Volunteer” Journal of Nonprofit & Public Sector Marketing, Binghamton: Feb 2008. Vol.
19, Iss. 1; p. 99
5. Thomas V Bonoma, “The Volunteer Subject”, Journal of Marketing Research, Feb 1977.
Vol. 14, Iss. 000001
6. Jennifer A. Pope, Elaine Sterrett Isely And Fidel Asamoa-Tutu, “Developing a
Marketing Strategy for Nonprofit Organizations: An Exploratory Study”, Journal of
nonprofit and Voluntary market, 2009
7. Siobha´N Mcgee and Freda Donoghue, “The Conundrum of Fundraising in Nonprofit
Organizations: A Story from Ireland”, Journal of nonprofit and voluntary market,
Binghamton Apr 2009. Vol. 21, Iss. 2
8. Katherine A. Karl, Joy V. Peluchette, Leda M. Hall, “Give Them Something to Smile
About: A Marketing Strategy for Recruiting and Retaining Volunteers”, Journal of NonProfit and Public Sector marketing, Binghamton: 2008. Vol. 20, Iss. 1
9. Kyle Zolner, Larry D. Compeau, Joseph M Jones, Jeanne Munger, “Consumers’
Perceptions of Nonprofit Solicitations: Some Preliminary Effects”, Journal of Nonprofit
& Public Sector Marketing, Binghamton Jan 2010. Vol. 22, Iss. 1
10. Mary Runte, Debra Z. Basil, Sameer Deshpande, “Cause-Related Marketing from the
Nonprofit’s Perspective: Classifying Goals and Experienced Outcomes”, Journal of
Nonprofit & Public Sector Marketing, Binghamton: Jul 2009. Vol. 21, Iss. 3
11. Michael Callow, “Identifying promotional appeals for targeting potential volunteers: An
exploratory study on volunteering motives among retirees”, International Journal of
Nonprofit & Voluntary Sector Marketing, London: Aug 2004. Vol. 9, Iss. 3
12. Markandrew Mitchell and Donald Yates, “How to attract the best volunteers” Non-Profit
World, Madison: Jul/Aug 1996. Vol. 14, Iss. 4
13. Patricia Sorce, Phiiip R. Tyier, James R. Minno, “Marketing your organization to the
health services volunteer”, Journal of healthcare marketing, summer 1985. Vol. 5, Iss. 3
14. Randall L. Ewing, Michele A. Govekar, Paul L. Govekar, Meenakshi Rishi, “Economics,
Market Segmentation and Recruiting: Targeting Your Promotion to Volunteers’ Needs”,
Journal of Nonprofit & Public Sector Marketing, Binghamton: 2002. Vol. 10, Iss. 1
15. Helen Bussell and Deborah Forbes, “Understanding the volunteer market: The what,
where, who and why of volunteering”, Journal of non- profit and voluntary sector
marketing, London: Aug 2002. Vol. 7, Iss. 3
16. MELANIE RANDLE and SARA DOLNICA, “Not Just Any Volunteers: Segmenting the
Market to Attract the High Contributors”, Journal of Non-Profit and Public Sector
marketing, Binghamton: Jul 2009. Vol. 21, Iss. 3
17. Becky J. Starnes, Walter W. Wymer, “Conceptual Foundations and Practical Guidelines
for Retaining Volunteers Who Serve in Local Nonprofit Organizations”, Journal of
Nonprofit & Public Sector Marketing, Binghamton: 2001. Vol. 9, Iss. 1,2
18. Joel S. Zimmerman, “The nonprofit branding exercise”, Nonprofit World, Madison:
Jan/Feb 2008. Vol. 26, Iss. 1
19. Ministry of Statistics and Programme Implementation(MSPI), Government of India,
2009