Why -- and why not -- would you develop and market products?
When would you consider developing and marketing products?
How do you develop products to sell?
How do you market your product?
How do you create an infrastructure to run the business?
In the supermarket or the department store, you normally shop for products that are made by small businesses or corporations in order to earn profits for their owners or shareholders. But what if, in a drugstore, you could buy a blood pressure cuff or a pregnancy test kit the profits from which went to the local health clinic? Or if, in a bookstore, you found a parenting manual whose profits went to a youth program? What if Toys R Us sold educational games whose profits benefited local after-school programs?
Developing and marketing products is one way that non-profit organizations can help to institutionalize their services in the community. Sometimes others do the developing and marketing: Newman's Own food products, for example, the brainchild of the actor Paul Newman, turns all profits over to various nonprofit organizations. Many non-profits do their own product development and marketing, however. Museums have gift shops. Most universities market clothing, books, and other products -- not to mention big-time sports events -- that help to fund academics. UNICEF holiday cards are a major force in the greeting card market. Local non-profits often sell T-shirts, or items specific to their work.
In this section, we'll discuss why -- and why not -- you might want to develop and market products; when your organization might want to; what kinds of products it might make sense to offer (developing products); how to go about marketing products you develop; and what sort of infrastructure you need to support a sales operation.
Why -- and why not -- would you develop and market products?
There are a number of reasons why you might decide that developing and marketing products is a good idea for your organization:
- It's a way to make money. If you do it well, it can mean a fairly large, long-term, stable source of income. Furthermore, it's income that comes without any restrictions from funders, so you can use it any way you please.
- It can raise the profile of your issue and your organization. A widely -distributed book, unusual or particularly attractive logo items (T-shirts, mugs, etc.), or other products can capture people's attention.
- It can provide jobs for participants and community members and/or involve them in supporting the organization.
Several human service organizations and a cooperative supermarket in a rural area, for instance, discussed starting a cooperative business to produce healthy packaged foods from organic ingredients (salsa made from nothing but organically-raised vegetables, herbs, and spices, for instance). The business would be run by experienced professional managers, and would use locally-grown produce, meat, and dairy products. It would be staffed by welfare recipients and other low-income area residents, who would be trained in various phases of the operation of the business. It was hoped that the low-income residents would become part of the cooperative, and would ultimately take over the running of the business.
This concept had a number of worthy goals:
- It would provide the human service agencies with a source of income.
- It would provide training, job experience, income, and the chance for cooperative ownership to unemployed, low-income area residents.
- It would provide local farmers with an outlet for their products.
- It would provide the cooperative market with high-quality local products to sell at a reasonable cost (because shipping would be negligible).
- It would provide consumers with good-tasting, healthy packaged food as an alternative to the high-fat, low-nutrition alternatives available in most supermarkets.
- It would provide jobs and add to the local tax base.
- It would provide use for an abandoned factory, thus reclaiming a currently blighted property and restoring it to the tax rolls.
- It can improve the whole organization's understanding of business and marketing, which could, in turn, improve its efficiency, management, and general operating ability.
- It could lend your organization more credibility within the business community, especially if you're successful.
Unfortunately, as with most ventures, this one carries with it some disadvantages to go along with its obvious advantages.
- To start up a business and keep it running requires spending large amounts of both money and time. You can't get started without capital, for instance. For a small venture, that may mean only a few hundred or a few thousand dollars, but it has to come from somewhere.
- Paying attention to the business may take the focus off the real purpose of the organization. You could find the organization becoming consumed by trying to successfully market its product, and becoming less effective in its work.
- By the same token, focusing on making money could lead to the organization 's ignoring its guiding principles, and thereby changing its character. As is discussed many times elsewhere in the Tool Box, you have to safeguard the principles, values, and vision of your organization at all costs. Anything you do that conflicts with them will probably be bad for the organization in the long run, no matter how great its short-term benefits.
- Even if you do everything right, running a business of this sort -- especially if it's successful -- takes constant attention. It may be difficult, with the resources you have, to maintain both the business and the work of the organization.
- As a business, you're at the mercy of the market in several ways.
- An economic downturn can mean a fall-off in business and an end to profit, at least for a while.
- A for-profit may see a promising market, and move in as a competitor.
- The demand for your product may simply dry up, or be replaced by something else.
For all these reasons, you need to carefully consider your position before you decide to use the development and marketing of products as a method of institutionalization.
When would you consider developing and marketing products?
Because it demands careful consideration, the decision to go ahead should include thought about the timing of the venture.
At least some of the following conditions should obtain before you actually proceed:
- You have, or have thought of, something you're really eager to sell. There are several reasons why you might feel this way:
- It spreads your gospel. A book, for instance, marketed to other professionals and non-profits, explaining a particular successful approach or technique that your organization has pioneered.
- It advances the mission of the organization. A wellness program might sell products that encourage exercise (work-out clothes), healthy diet (cookbooks), or monitoring health risks (breast self-exam instructions). An adult literacy organization might sell high-interest books aimed at adults at a variety of reading levels.
- It will enable people to improve their well-being. That might encompass physical and mental health, life satisfaction, relationships with family and others, enjoyment of the natural world, etc. Some products in this category might include blood pressure or blood sugar test kits; books to read to children; bike helmets; or self-help and instructional books.
- It's particularly beautiful or useful. An example might be a series of prints by a fine artist created specifically to be sold by your organization.
- You have the resources to try it. "Resources" can mean a number of things:
- You have the staff to carry out the work of the organization and still pay proper attention to this effort.
- You have one or more staff members with business experience who think this will work, and are willing to put in the time and effort to make it happen.
- You have an offer from a business or a retired businessperson for help with the process, or a good deal on production, or working capital, or some combination.
- You have, or have an offer for, start-up capital in a form that's not overly risky (a low-interest loan, a direct investment, a gift, or organizational surplus funds whose expenditure won't affect the work of the organization).
This might be a good place to bring up the subject of risk. Any business venture, no matter who carries it out, bears some risk. The trick, of course, is to try to minimize the risk while maximizing the chances of a good outcome. That's why successful businesses do careful market research and concentrate on quality, but they can never eliminate risk completely... and neither can you. It's important to be aware that you're risking some money and other resources in the hope of a return that makes the risk worth it. You have to weigh the two and be sure that the possible return is, in fact, worth the risk. If it is, go ahead: very little that's worth anything comes with no risk at all.
- You have a solid business plan. It should include a realistic assessment of your level of resources and expertise, the amount of time and money it will take to get started, how long you can afford to wait for the break-even point, etc.
A business plan is just that: a plan for how your business will work, and how you expect to make it profitable. Business plans in general are long and complex, because they're usually presented to potential backers or to bankers in hopes of an investment or a loan. If you're not looking for money from outside the organization, your plan may be relatively simple, but you do need one. Writing a business plan forces you to look at reality, and to think out your situation.
A business plan should include a description of the organization, including its mission. It's important to remember that whatever product development and marketing you do should be in service to that mission, not an end in itself. If the two are connected, all the better. Other elements of a business plan are:
- A description of the product, and a rationale for its selection
- A marketing strategy, including a description of your market research plan
- A management plan, including who will run and staff the venture
- A financial plan, detailing how much money you have to work with, what it will cost to start up the venture and keep it going, what returns are likely to be, how you'll handle cash flow, and an honest appraisal of how long it will take to break even and to start turning a profit.
Whether or not you intend to present your plan to anyone else, writing it will make you think through the venture carefully, and will give you a much clearer picture of what to expect. Remember: you have to be honest. If there are areas that you should be addressing, but aren't, go back and do it. If you don't have the resources to start this venture, you need to rethink what you're doing. Don't just forge ahead without paying attention to reality.
There are numerous sites on the Web that have information on business plans. Two particularly good ones are BPlans, which offers a number of sample business plans and an online manual; and the site of the U.S. Small Business Administration, which offers a tutorial on writing a business plan and links to related sites.
- You really need a steady source of income that's not tied to a funder's priorities or restricted in any way.
- Market surveys indicate that people are likely to buy what you have to sell. Depending upon the scope of your proposed operation, market surveys might consist of anything from stopping and questioning a few people in the supermarket to complex national research carried out by a high-priced market consulting firm.
There is clearly a range possible here. You can set out to develop and market some organization-specific goods (T-shirts, coffee mugs, tote bags, etc. with your logo on them) to be sold locally to make a few extra dollars. Or you can turn your hand to products that you expect many thousands of people to buy, and that you hope to continue to sell over a long period. As we'll discuss later, market research is important in either case, but the level of research has to match the overall effort and expected outcome.
The reality is that the "T-shirt sales in the office" approach won't ever make you very much money. If you see marketing products as a small supplement to your budget -- enough to pay for some extras not covered in your grants -- then that may be exactly the approach you want to take. If you're really looking at product sales as part of the basis for institutionalizing your organization, you'll probably have to think bigger. Marketing books and other instructional materials to professionals is a way that a local organization can reach a national audience without an enormous investment in either advertising or production.
How do you develop products to sell?
So, you've weighed the pros and cons, and you've decided to go into the business of selling products to help support your organization. How do you decide on what to sell? Your product should meet at least several of the following specifications:
- Your product(s) should have something to do with the organization. People are more likely to purchase your product if they think you might have some reason to know something about it. In addition, it's more likely to reflect well on your organization and your issue if it's related to them in some way. That could mean material for professionals about your issue, health-related items for a health organization, books for an adult literacy organization, safe toys for an organization that works with or benefits children.
At one point several years ago, the gift shop at a natural wonder in the Southwest, located in the middle of a vast desert hundreds of miles from the ocean and hours from the nearest flowing water of any kind, featured ships in bottles for sale. Needless to say, this struck some visitors as inappropriate.
- If possible, it should advance the mission of the organization in some way. Books that somehow educate people about your issue; health-related items; games or kits or instructions related to the activities of the organization are all examples of sale items that might serve to achieve this purpose.
- It should be useful in some way.
- It should be of excellent quality. Offering top-quality products both makes it more likely that people will buy them and demonstrates your respect for the customer.
- It should be affordable, or at least a good value for the money.
- It should be something people will want to buy for itself, not just to support the organization.
Although most of the possible products that are mentioned in this section are directly related to the work of organizations, there is also room for the familiar T-shirts, caps, mugs, and other logo-embossed items that so many non-profits offer. These may be sold in addition to other kinds of products, or may stand on their own. Most of them in fact meet the conditions of the guidelines, and serve to draw attention to your issue and your organization. If they're particularly well-designed, they can become much sought after, and could be a good source of income if they're marketed well.
Deciding on an actual product
There are three essential steps to coming up with a product appropriate for your organization:
- Research. Do some research with potential customers. Depending on your budget, it could be formal or informal. It doesn't necessarily have to involve hundreds of people, but it should involve people whom you might expect to be purchasers of your item. Use interviews, conversations, surveys, focus groups, brainstorming sessions -- whatever you can manage -- to find out what they think. If you already have a product in mind, ask them their opinions about your product as it is, and how they think it could be improved. If you don't yet have a specific product, find out what potential customers need and want that you could supply. In addition, pick the brains of those connected with the organization and other supporters.
The research referred to here and elsewhere in this section boils down to asking potential customers what products or features of products they'd be willing to buy. There are various ways to do the asking, some more reliable than others. A marketing firm might poll -- often by phone -- a specific number of consumers carefully selected at random, or equally carefully selected to be members of one or more particular groups. It might also use other techniques, including:
- Surveys: carefully crafted questionnaires, usually with multiple-choice answers, designed to get accurate information about consumers' preferences.
- Focus groups: composed of people chosen from particular target groups, facilitated by a researcher, these gatherings discuss products and other consumer issues, prompted by the facilitator's questions. (A local focus group doesn't have to be particularly formal. It can be any available group that meets the criteria you're looking for. A high school class can yield a teen focus group, for instance; your weekend softball team can serve as a focus group of people interested in sports.) The interaction among people in the group often provides different kinds of information from that of surveys.
- Structured interviews: one-on-one telephone or in-person in-depth interviews.
Using these and other strategies, marketers try to find out, before new products are offered, whether they're likely to sell. Most non-profits trying to institutionalize can't afford to use a marketing firm, but they can put together focus groups and employ other methods of testing the waters before they make a total commitment to producing and marketing items.
- Response. Act on the information that arises from your research. If a book is seen as having good ideas, but being too densely written, do some serious editing. If customers think your software lacks features that could be easily added, add them. If people want something you haven't thought of, but would be appropriate for your organization to market, consider developing it.
- Refinement. Make sure of the quality of what you have. Work out all the bugs in the software before you release it. Make sure the instructions for your materials -- and the materials themselves -- are clear, easy to use, and work the way they're supposed to. Run the final product by potential customers, especially if you've changed it, to make sure it's something they still want to buy.
Producing your product
Once you've decided on what you want to market, you have to actually get it produced, so that you have something tangible to sell. If you're offering a book or informational or instructional materials, you have to write or program and design it, including whatever other pieces you want the finished product to have: graphics, separate objects, etc. Other items must be designed, too (whether that means determining the logo on a T-shirt or coming up with the total idea and physical design of a game or a mechanical device). That may mean working with a professional designer.
The next step is to find a supplier -- someone who can actually supply you with a finished product you can sell. That may be a publisher, a printer, a manufacturer... whoever can actually turn out finished copies of your product.
There are some issues around working with suppliers that it's useful to consider:
- If you're a local organization, can you accomplish at least part of the production locally? (Items that aren't available locally could be bought from a national supplier and imprinted locally, for instance.) Using local businesses will both make you friends and give you another opportunity to contribute to the community you serve. It also means that your supplier is easily reachable if you have a problem or if you need to confer.
- How will you handle quality control? Get -- and check -- references from potential suppliers, and ask other organizations that market products to rate their suppliers. If you don't have the expertise, try to find help to determine the quality of the products that potential suppliers turn out. Ask suppliers about their quality control process.
Something that often comes up in situations like this is that a particular supplier is a friend of the organization, or has provided an especially good deal, and no one wants to hurt his feelings, even though what he's turning out isn't very good. The problem is that the quality of what you're selling reflects on the quality of your organization. People will judge the effectiveness of your organization's work by the quality of the goods you sell. That may not be fair, but it's reality.
You need to work closely with your supplier from the beginning to make sure you 're getting what you want. You should certainly give a supplier a chance to improve if the product isn't up to your standard. But if it doesn't get better, change suppliers. You can't afford to jeopardize your organization's reputation just to be nice.
- The same rules apply for service as for quality. If a supplier fails to deliver on time, or gets quantities wrong, or over bills, and doesn't improve when you call him on it, find another supplier.
The ideal is to find a supplier who'll work with you as a partner, and who cares about quality and service as much as you do. He'll help you improve and refine your product and procedure, whether that means suggestions about the design of a book cover, or mechanical improvements to a piece of equipment, or changes to your delivery system.
A few words about publishing: If your product is a book or other textual material, you may have some choices about how it gets produced. The standard -- and usually best -- possibility is to have it published by a commercial or academic press. In that case, the publisher will take care of the expense of producing, distributing, and advertising your work. You may or may not get an advance (money in advance to support your writing), but you will get royalties (a percentage of the receipts from the sale of your product).
Commercial publishing, however, produces relatively little income: books geared to professionals do well if they sell a few thousand copies. The return to you may be small (although it may also be measured in prestige and respect in the field, and in opportunities to consult and lecture, which could in fact generate income as well ).
Another option is self-publishing. In this instance, you pay the publishing costs, and do your own marketing. You also can design the product yourself, and you get all the profits from the sale of each copy after a bookstore or other seller takes its cut. Some non-profits have found they could make several thousand dollars a year just by selling their books or materials by word of mouth in the field. They keep costs down by using small, local printers to put out a few hundred copies at a time, and reprinting only when the supply runs low. Since they sell the items themselves, the profit is all theirs.
As is obvious, there are advantages and disadvantages to both commercial and self -publishing. The first is far less hassle and expense, but returns may be limited, and you don't have complete control over the look -- or even the content -- of your work. Furthermore, you have to find a publisher who's willing to print your work. The second affords control and the possibility of a larger return, but also involves much more work, much greater expense, and much higher risk. You need to consider the alternatives, and decide what makes the best sense for your organization.
How do you market your product?
The Tool Box includes a chapter on social marketing, "selling" social and individual change. Most of the guidelines for social marketing come right out of commercial marketing texts, and are totally relevant here.
In brief, successful marketing is defined by some specific principles:
- Be customer-centered. That means that customers' needs and wants guide both product development and marketing strategy. If you do what you think will work, it may work or it may not. If you give customers what they ask for, you have a far greater chance of success.
- Pretest. Once you have a product and a marketing strategy, pretest both with your target customers to make sure they will fly. If not, make the changes that your pretest tells you will make them successful.
- Pay attention to the Four P's: Product, place, price, and promotion. Each of these -- the nature of the product; where and how it's offered; the price, both in money and other factors, that the customer has to pay for it; and how you promote it -- helps to determine whether your marketing effort will work or not.
- Monitor and adjust. Once a marketing campaign starts, you have to keep checking -- both by results and by consulting with customers -- on how well it's working, and make changes to improve it.
A large commercial firm with a new product would conduct a long-term marketing campaign, including a large amount of market research to determine what marketing approach would work best. Most community based organizations don't have the resources for this kind of marketing, but they still need to pay attention to these principles. Here's how a local marketing campaign might work.
The Pryorview Bird and Nature Club has developed a game designed to teach children and adults about local endangered species, and at the same time promote family togetherness in the outdoors. The Club has already pretested the game with a number of families (they loved it), and found a local firm to produce a colorful and attractive version of it out of recycled materials. Now the task is to convince people in the area to buy it.
- Customer centered. What will potential customers respond to? The Club first conducts some focus groups -- members of the PTA and their children, families from the church of one of the Club's officers, people enrolled in parenting courses at the Human Service Center -- to ask what people like about the game, and to try to find out what marketing strategy might work. They find that most people in the focus groups respond to the fact that the game is something fun that parents and kids can do together, and that they can then continue the activities of the game in the outdoors. The Club decides to feature these aspects of the game in their marketing.
They work out a marketing strategy that emphasizes family fun, environmental learning, and outdoor activity leading to practical knowledge. They add the fact that the outdoor activities can be pursued at any season. The Bird and Nature Club finds an intern from the Communications program at the local university who creates a series of newspaper stories that can run in the "family" section, newspaper ads, radio spots (including public service announcements), and copy for both postal and electronic mailings to the Club's mailing lists.
In looking at market segments (particular groups, each with particular characteristics -- age, preferences, behavior -- that might make them more or less likely customers for the product at hand), the Club decides that the obvious target customers will be families with children, and particularly those who already enjoy outdoor activities.
- Pretesting. The marketing strategy is pretested with a number of individuals and focus groups. The most enthusiastic about both the game and the marketing strategy are indeed families with children who already spend time in outdoor recreation. It turns out that nearly everyone really likes the idea of the game leading to four -season fun in the outdoors, and appreciates that it's made of recycled materials. As a result, the marketing material is edited to emphasize those features.
- The Four P's.
- Product. The product has already been developed and pretested, and found to appeal to the target customers.
- Place. Where can the Bird and Nature Club best reach its targeted customers ? One obvious tactic is to advertise, in the form of underwriting programs, on public radio, which many potential customers listen to, and to place ads or stories as well in the newsletters of local environmental organizations or fish and game clubs. Another is to place copies of the game in stores that sell camping and outdoor sports equipment, and on the shelves of stores that will promote it as a local product. Yet a third is to sponsor ski reports and similar features on commercial radio, or to place newspaper ads in sections that include reports on outdoor activities. The Club might also make sure to be present at conferences and fairs that emphasize either family or outdoor activities, with copies of the game and information on how it can be used to lead into outdoor activities for the whole family.
The suggestions here are aimed at a local organization without a large budget. There are, of course, alternatives to those named above. Organizations marketing to other professionals would probably advertise in professional journals and present their ideas at conferences, for instance. An organization might establish or upgrade a website in order to market its products.
An organization with the resources could try to market products nationally, either in existing retail stores -- through, for instance, an agreement with a national chain -- or through a mail-order or e-mail campaign. An organization might open its own store, as Goodwill Industries does, to market its products, or might publish and distribute a catalogue, as do many museums. There are as many placement strategies as there are organizations and budgets.
- Price. Because the game is produced and advertised locally, the price can be kept reasonable -- lower, in fact, than the prices of most other comparable games. Since it's available locally, the cost in time and effort for customers to buy the game is low.
- Promotion. The Club has already learned, by pretesting, that it should promote the game as leading to family fun in the outdoors, and as environmentally responsible. Its ads, both in print and in other media, have been written to emphasize that. The member who developed the game has also managed to get herself interviewed both on radio and in the newspaper. In addition, the Club has sent promotional materials for the game to several national media outlets, hoping that someone will want to do a story that may run on National Public Radio, or even on national TV news, as a human interest or environment story. Such publicity could lead to national sales.
Some other ideas about promotion, particularly if you're trying for a larger market than your own community:
You can give out free samples to influential people to use, including people you don't know, hoping that they, in turn, will tell others about your product. Everett Rogers, in Diffusion of Innovations, talks about opinion leaders, people whose opinions influence others. If you can convince them to adopt something new, they'll pull large numbers of people along with them. Let the opinion leaders try out your product. (Book publishers do this all the time. They send college professors free samples of many -- sometimes hundreds -- of textbooks every year, in the hope that the professors will assign some of them in their classes. For the cost of a single free book, a publisher may get back hundreds of orders.)
If you're trying to market a book or materials to other organizations, there are some other paths you might take. One is placing ads in professional journals and magazines, where your target customers are likely to see them. Another is publishing scholarly articles in those same journals and magazines about the techniques or materials you're marketing. This will both gain you respect and whet your colleagues' appetites for the material you're offering. A third tactic is obtaining testimonials from respected people in the field. Customers may never have heard of you, but if you're recommended by someone they have heard of, they might be more willing to take your claims for your product seriously.
Unless you have an enormous budget for advertising on TV or in such national and quasi-national newspapers as USA Today and the New York Times, the best ways to market nationally are probably direct mail, e-mail, and web sites. In the first two cases, this probably means buying mailing lists from other organizations or entities. Direct mail also involves large outlays of money and time for both postage and actually assembling mailings. A website is relatively easy and inexpensive to set up -- especially if you have the in-house expertise to maintain it yourself -- but you have no control over which or how many people you'll reach.
- Monitor and adjust. The Bird and Nature Club will keep track of how well its marketing campaign is working. They'll look at which ads and outlets are contributing most to the sale of the game, and ask customers why. They'll go back to some of their original focus groups to get feedback on both marketing and on the game. Has it turned out to be as much fun as it seemed? Has it actually drawn families outdoors?
The Club will change its marketing strategy in response to its customers' ideas, and may change the game itself as well, to make sure it accomplishes its purposes. The Pryorview Bird and Nature Club knows that paying attention to what its customers tell it can make the difference between the success and failure of a marketing campaign.
So there you have it: like the Pryorview Bird and Nature Club, you, too, can develop and market a product that both advances the mission of your organization and helps to institutionalize it in the community. There is an issue left, however: managing the whole sales operation. The practical side of the operation has to be attended to as well if you're going to be successful.
Creating an infrastructure to run the business
It's important to remember that, no matter what you're selling and how you're selling it, you also have to have an efficient and well-constructed system for running the product-development-and-marketing part of the organization. In order to keep everything in order, you have to consider a number of areas:
- Taxes and other legal issues. Even though your organization may be tax -exempt, if your state has a sales tax on whatever items you're selling, you still have to collect, record, and pay that tax back to the state on all your sales. You may need a state permit to sell anything, or there may be particular laws or rules for non-profits that you have to follow in order to market products. There may also be particular reports to submit or annual permit fees to pay.
There may be other issues to consider as well. States may have rules about how much of its income a nonprofit can generate from sales and other business ventures and still be considered a nonprofit If your sales effort is really successful, you may have to create a for-profit subsidiary in order to stay within the law. (In this case, the profits would be rolled back into the nonprofit) It's probably worth it to consult with an accountant, a lawyer, or both. (You may have a Board member who can help.)
- Logistics. Depending on the size of your marketing operation, you may need extra phone, fax, and modem lines, supplies (order forms, for instance), staff time, etc. This all has to be worked out and monitored to make sure that you have and maintain everything you need to run the business.
- Day-to-day management. Someone has to oversee the actual workings of the business. If you're selling only a couple of small items a day, sales can be recorded in a notebook and the money kept in a drawer. But if you're actually operating a serious business, management is a major concern.
- Orders. If you receive orders for your product(s) by mail or phone, you need both people and a system to handle them. If you accept purchase orders from other organizations, that further complicates matters. Someone has to set up and oversee an ordering system that makes it as easy as possible to track orders and assure that customers get what they asked for.
- Inventory. A business needs to keep track not only of how much it has on hand to sell, but of how fast items move, so that it can order more in time to keep from running out. If you are marketing several items, this can be a complicated process. You may want to set up and use a computer-based inventory program, which, in turn, may require UPC bar codes on products and regular monitoring. All of this has to be set up, coordinated, and monitored.
- Shipping. If you're sending items through the mail or by UPS or FedEx, you need to send the right stuff to the right place in a reasonable amount of time. Orders have to be filled properly and promptly, and sent with as little wasted effort as possible.
- Dealing with suppliers, shippers, and customer questions and complaints. Finally, someone has to see that everyone's happy, and that both you and your customers are getting what you pay for.
- Fiscal management. Then there's money. Whether you ask for payment in advance, bill customers when you ship their orders, or simply take money as people buy your products, someone has to keep careful track, send bills out on time, and keep after anyone who doesn't pay. You're responsible for recording how much comes in, and taking care of sales tax. The organization has to pay its suppliers and shippers on time, which means someone has to manage the cash flow so that can happen. You also have to keep an account of your sales receipts separate from your organization 's grants or contracts. If you're doing a reasonable amount of business, fiscal management alone can be a big job.
- Other possible issues. The paragraphs above assume that you're conducting a walk-in or mail-or phone-order business out of your current space. That's the way most small organizations run marketing operations. If you're marketing in some other, more ambitious way, however, you'll have concerns in addition to those already described.
- Internet. If you're doing some of your selling through a website, that site has to be designed, programmed, and maintained. Someone has to monitor it regularly, in order to record and process orders, deal with credit card companies (another issue in itself), update information, and handle customer e-mails. There are technical issues to attend to as well, such as how easily the site can be found by search engines.
- Retail operation. If you have a store, even if it's on your premises, as a museum gift shop would be, you will be dealing with:
- Buying. Can you stock a whole store with only your own products? If not, you'll have to look for related items from wholesalers, monitor how well they sell, and replace or supplement them with others on a regular basis.
- Presentation. You'll want to set your products out attractively so people will want to buy them.
- Stocking shelves.
- Janitorial services and general cleanliness.
- Security and fire protection.
- Handicap accessibility.
- Personnel -- procedures, breaks, and other logistics, not to mention such things as salary and benefits.
- Catalog sales. The use of a catalog brings with it the need for the design, production, printing, and updating and reprinting of the catalog itself; a storage and shipping facility that has to be maintained, staffed, and secured; collection and updating of mailing lists; regular mailings and their attendant costs; continued product development and/or buying; and, as with other types of operations, customer service to answer questions, field complaints, and ensure that the operation runs smoothly for those who use it.
Regardless of whether you sell a few T-shirts or CD's every week, or whether you market health educational materials to thousands of clinics, a solid infrastructure is absolutely necessary to the success of your venture. If you can combine it with quality products that follow the general product-development guidelines, and with a marketing strategy that starts with customers, you're on your way to an operation that will help to provide finances to institutionalize your work in the community.
Developing and marketing products -- particularly products that reflect the work you do -- can be a way of providing income to institutionalize your organization. Before you start to create a marketing operation, you would do well to consider whether there is a good reason for your organization to do so, whether the potential advantages outweigh the risks, and whether you have the capacity and resources to make it successful.
Regardless of what products you choose or for whom they're intended, they should meet at least some of these basic criteria: They should have some connection to your organization; they should help to advance your mission; they should be top quality; they should be affordable, or at least a good value; and they should be things that people want to buy for their own sake, and not just to help your organization. Use customer research and pretesting to come up with products that people will want, and then continue to refine them based on customer feedback (research/response/refinement ).
Pay attention to the cardinal rules of marketing:
- Be customer-centered.
- Pay attention to the Four P's (product, place, price, promotion).
- Monitor and adjust.
Finally, create an infrastructure -- the necessary people and systems -- to make sure your product development and marketing operation runs smoothly. If you can successfully negotiate these steps, you're on your way to entrepreneurial success.
BPlans offers numerous sample business plans and suggestions, as well as consultation and software.
Alan R. (1995). Marketing Social Change. San Francisco: Jossey-Bass Publishers.
Herron, D. (1997). Marketing Nonprofit Programs and Services. San Francisco: Jossey-Bass Publishers.
Kotler, P., & Alan R. (1987). Strategic Marketing for Nonprofit Organizations, third edition. Englewood Cliffs, NJ: Prentice-Hall.
Rogers, E. (1995). Diffusion of Innovations. New York, NY; Free Press.