NGOs in Marketing

Vikram Dahiya

IIM-Rohtak

“ NGO Marketing”

A confusing topic with conflicting connotations

Non- Profit – Fair Trade – Producer Empowerment

Diverse legal forms – aims & objectives – approaches

Government sponsored – PPPs- Section 25 companies- Multi lateral

agency promoted- Companies

Complex marketing challenges & issues

Variety of options – interventions – strategies

Few successes, many failures for IGPs

NGO Marketing Paradigms

Organisation Development Approach

Market Development Approach

•Service provider- One or all marketing operations•No encouragement for competition & market development•Works for a specific target group•Unsustainable unless run on commercial principles• Example: BAIF

•NGO as a facilitator•Works to develop the market & promote competition •Sustainable if it succeeds in market development•Needs grants or outside subsidy•Difficult to run on commercial principles• Example: IDE

OD Approach: Jaipur Rugs Foundation

Source: Jaipur Rugs Foundation Webpage

Continued

Micro Markets Approach

Work with local markets, local skills and local products

Analysis of haats and other weekly markets

Microfinance to micro enterprise through micro- planning

Mart 3 M Model

Example: Support for marketing under the aegis of WORLP in Orissa

3 M Approach – MART

Microfinance Micro markets Micro planning First input required to start income generating activitySHGs already in existence and functioning systematicallyPossible for a group member for starting a micro enterprise

Micro markets are perennial or periodic markets Local markets are important for poor women entrepreneursBetter access and control vis-a –vis distant town and city markets

To assess the local market demand pattern through surveys of local haats and village shops Local resources available such as raw materials, infrastructure, skills & support services

Cont’d

Source: Presentation by K P Mishra (Mart), XIMB -2004

NGO Marketing Issues Issue ( Indicative) Reasons( Indicative) Effect ( Indicative)

Small size & low value goods and services

Poor access to human, financial capital(1)

Stunted growth of enterprise (4)

Offering & market preference mismatch

(2) -Leading to poor market scoping & research process

“ Marketing myopia” (5)

Lack of market access

For inputs & outputs

Institutional, logistical and technological barriers(3)

Poor price realisation, distress sale in the case of perishable commodities ( 6)

Information asymmetry

(3) & (1) Inability to exploit opportunities (7)

Continued Non – Profit Objectives

Connected to Vision Mission & Goals (8)

Resistance of staff (9) & fear of change

Risk Aversion Programmes based on grants, application of own/ self generated

funds low (10)

(7) & Enterprises don’t have independent decision

making powers

Multiplicity of goals

Programmes dictated by donor priorities (11)

(4)

Discomfort with commercial

partners

(8), (9) & (11) (4), (5) & (7)

Unique Complexities in NGO marketing

Solving Issues

Comprehensive SWOT

Beneficiary (Client)- Business matching

Freeing the entrepreneur – Very often neglected issue

Kudumbashree – SIDBI RIP & Rajiv Gandhi Udyami Mitra Scheme are

cases in point

Experience of Udyog Vikas

Group or individual approaches

Market efficiency criteria Vs Community benefit criteria

Product- Market Options

Products Present Markets New Markets

Present Products Market Penetration Market Development

New Products Product Development Diversification

Adaptation of Ansoff’s Product – Market Grid

Identification of Product – Market Options & Product – Market fit vital for success

Cont’d

Market Dimensions of Competition ( Indicative)

Price Promotion Product Distribution Market Resistance

Policies

Micro

Rural

Semi- Urban

Urban

Adapted from Dr. L K Vaswani, IRMA – 2005

Conclusion

Map rational & emotional value chains

Identify opportunities presented by the value chain analysis

Decide on the approach & develop capacities after SWOT analysis

Map present position of the target group in the value chain and attempt one

jump at a time

Marketing requires appropriate & separate organizational structure

Plan for viability from day one

Facilitation & service provision may cause conflict of roles and interests

Adapted from Prof. D N Rao, XIMB 2004

Close of Session

Thank You