The market-led organisation
The market-led organisation

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The market-led organisation

3 Do all organisations need to be market oriented?

As you have seen, many marketing writers maintain that to be successful all organisations (commercial and non-profit) must be market oriented and must focus their attention on adding value to their products and services to satisfy their customers’ needs.

Leaving aside the word profit from the CIM's definition of marketing, at a conceptual level the process of becoming market orientated is concerned with identifying, anticipating and satisfying customers’ needs. Kotler (Drucker, 1992) believes that changes in funding and the introduction of competitive tendering have forced some organisations to use these customer-focused approaches to help them compete in their marketplace. Kotler explains:

Marketing really is spurred on by the presence and the increase in competition that the institution faces in a way that it never faced before. Most organizations don't get interested in marketing when they are comfortable. Suddenly they find that they don't understand their customers very well, and their customers are leaving that church, or they're not signing up for the college, or coming to that hospital. And these institutions become aware of a competitive situation.

How do you deal with a competitive situation? Well, one way some early hospitals dealt with it was to pray that the world hadn't changed and that they would just survive. Now, prayer may have a role to play, but it is not the answer. The normal answer is that may be there's something in this thing called marketing that will help us to understand why customers chose to be with us in the first place and why they're not choosing to be with us anymore.

(Drucker, 1992, p. 80)

He believes that marketing techniques could be used to facilitate ‘mutually satisfying exchanges’ between the organisation and its publics (a ‘public’ is any group that has an actual or potential interest in or impact on an organisation's ability to achieve its objectives). This concept of ‘exchanges’ is important. As you have seen, marketing is denned as facilitating the exchange process. In the commercial sector, this means products and services are exchanged for money. In the non-profit sector, this means products and services are exchanged for ideas, values and beliefs.

To run a non-profit organisation effectively, the marketing must be built into the design of the service. This is very much a top management job, although, as in every other area, you need a lot of input from your people, from the market and from research.

(Drucker, 1992)

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