Question

Marketing

List three ways in which non-profit organization marketing differs from that of a for-profit organization.

- Difference #1

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- Difference #2

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- Difference #3

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Answer 1

Non-Profit Organization: Non-Profit Organization refers to the entity which is not run for profit-making but works to solve different issues in society, causes and assisting other individuals. These are also called Non-business and charitable entities. The causes that could be the reason for starting a Non-Profit organization are Education, Women empowerment, religious, scientific, literacy, and public safety. The revenue generated from the different business activities will be used for organization improvement and spend on a specific cause. The main source of income for these organizations would be charity and donations.

For-Profit Organization: For-profit organization refers to a business entity that works towards earning profit from its operation. The main objective of the for-profit organization to increase profit year to year and the profit would be divided to its owners, shareholders, partnership or kept for reserve for future purposes. Most of the organization fall under this category for example proprietorship, private limited or public limited company.

Differences in Marketing strategies used by Non-Profit and For-Profit organization:

The main purpose of both organizations is to attract more customers and earn money from their business operations. It is a different matter of how they are using that earned money. So both types of firms use marketing and promotional activities to attract more customers. We will discuss differences in marketing strategies used for Non-profit or For-profit organizations,

a. Marketing Budget: This is one of the main differences in marketing strategy between non-profit and for-profit organizations. The non-profit organization will have no budget or less budget for their marketing campaigns. They have less money to spend on marketing and have to find marketing options at less price. The non-profit organization uses social media and crowdfunding options for their marketing purpose. In this way, they can reach their target audience. It is difficult to raize funds through charity or donations so non-profit organizations need to market themselves so that people will be aware of their organization.

On the other side, the for-profit organization will have more budget for marketing and promotion purposes. They can spend more money to attract more customers. They have to be in the mind of the customers because they might have competitors in the market. So these organizations will use different kinds of marketing tools such as social media marketing, digital marketing, advertisement, sponsorship, etc.

b. Attracting customers: Non-profit organization raize money by donations or charities from different people, and it is tough for them to raise money from this way. Because no-one will give a donation if he is not aware of the non-profit organization. Because of this, first, they will educate people about the cause and their organization. They will show the historical reports and results of their previously raised money and how they spent it.

The for-profit organization, customers has to spend money to buy product or service, so it is the responsibility of the organization to educate and explain prospective customers about the products or services provided by them. The organization have to prepare a marketing plan and brainstorm about their target market and come out with a unique marketing campaign to attract more customers.

c. Relationship with Customer or Donor: It is important for both whether for-profit or non-profit organizations, have to build a stronger relationship with donors or customers for future business relationships. The reason would be different for both the organization.

The non-profit organization wants to make doner feel great about a cause they are supporting, the organization has to find those people who want to spend money for the causes that are linked with the organization. Donors should have trust in the organization and feel safe as their money will be spent for the same purpose. This will help for future support as well if both the party have trust in each other.

On the other side, the for-profit organization has to make the customer feel positive when they are buying products or services. There could be so many other companies in the market that sell the same products or services. So providing the best quality at the best price is the utmost priority for the organization so that the customer will come back for future purchase again.