95Santos & Laczniak The heritage and current status of the ‘In.docx

95Santos & Laczniak The heritage and current status of the
‘Integrative Justice Model’
PART II
Marketing to the poor: A SWOT analysis of
the Market Construction Model for engaging
impoverished market segments1
Nicholas Santos, Marquette University, USA
Gene Laczniak, Marquette University, USA
SCENARIO 12
KickStart, a Kenya-based company, develops and promotes
technologies that budding
entrepreneurs can use to establish and run profitable small scale
enterprises. According
1 This paper was presented at the London Business School
Conference on Corporate
Responsibility and Global Business (July 2006), London, UK. It
is © the Authors, and
repoduced here under licence.
2 Robert S. Katz, “Base of the Pyramid: Sustainable Business
from the Bottom up”, <www.
greenbiz.com> (March 2006).
Abstract This paper examines, by way of a modified SWOT
analysis, the
significance of the “Market Construction Model” (MCM) for

marketing to the poor.
The MCM proposed by Harvard researchers Rangan and
McCaffrey provides a
preliminary blueprint for more equitable engagement by
companies whose
businesses involve impoverished market segments. The purpose
of the SWOT
analysis is to better understand how the MCM might be better
modified and
increasingly refined in order to make it a more actionable
framework for better
engaging impoverished markets with an eye to fairness and
justice. In addition,
the authors compare and contrast the modified MCM with other
contemporary
frameworks such as the “Services Dominant Logic” and the
“Bottom of the
Pyramid Protocol”.
Dr Gene R. Laczniak is the Sanders Emeritus Professor of
Marketing at Marquette
University, Milwaukee, USA. He currently serves as President
of the Macromarketing
Society. Over the years, Laczniak has published many scholarly
journal articles and
papers. In 2012, he received a lifetime achievement award from
the American
Marketing Association for his contributions to marketing ethics,
corporate social
responsibility and public policy scholarship.
Gene R. Laczniak, Marquette University, College of Business,
606 N. 13th Street,
Milwaukee, WI 53201, USA.
E [email protected]

96 Social Business, Volume 5
to Martin Fisher, one of the co-founders, “appropriate
technology is crucial to the
creation of millions of small businesses and jobs”. Their
technologies include oilseed
presses, a stabilized soil block press for homebuilding, and a
highly successful line of
treadle pumps sold under the brand name MoneyMaker. As they
sell these products
to small businesses in developing Africa, they lay the
foundation necessary for a
better economy. According to the company, its pumps have
created over 29,000 new
jobs and $37 million in annual wages and profits to pump
operators. Emphasizing
sustainable irrigation practices as well as a flourishing local
supply chain, KickStart
exemplifies how poverty alleviation and profit generation can
symbiotically co-exist.
SCENARIO 23
In contrast, a multinational German based pharmaceutical
company, whose latest
stroke-prevention drug was making its way through the clinical
pipeline, approved
a small hospital in the town of Sevagram in Central India as a
trial site - one of 28.
The regimen to be evaluated was tested for its ability to
forestall a second stroke. For
each person enrolled in the trial, the hospital would receive
30,000 Indian rupees

(about $665). The trial was attractive to the patients, who were
mostly poor and
illiterate. The company guaranteed them two physicals during
each of the three years
that the trial would run and of course, they also got to use the
trial drug free of
cost. However, it seems the patients were not informed about
possible side-effects.
Furthermore, strokes (relatively speaking) are not a major
problem in Sevagram,
where deaths from malaria and snake-bites are far more rampant
than strokes.
While the scenarios above both deal with engaging the
impoverished market
segment, the level of empathetic involvement by the sellers in
each situation is
markedly different. The question that arises from reviewing the
two scenarios is:
which of them might more likely exemplify a “win-win”
situation for all participants?
More will be said about these possible differences in approach
in the paragraphs
below. But we can be confident that as business organizations
embrace the idea that the
“bottom of the pyramid” (BoP) constitutes an economically
viable market segment4, it
becomes critical that exchange situations that are directed
towards such segments be
shaped in a manner that is “fair” and “just” to both parties (i.e.
the business unit and
consumer). This is particularly important in an impersonal
economic marketplace
that too often exploits the poor due to an “imbalance” of
resources, information or
financial leverage on the part of the less advantaged member

(see scenario 2).
The Tomorrow’s Leaders group of the World Business Council
for Sustainable
Development acknowledged that the impoverished segment
represent both an
opportunity and a challenge for business organizations. While
poor people constitute
3 Jennifer Kahn, “India: A Nation of Guinea Pigs”,
<http://www.corpwatch.org> (March 1,
2006), originally published in Wired.
4 See C.K. Prahalad, The Fortune at the Bottom of the Pyramid:
Eradicating Poverty through
Profits (Upper Saddle River, NJ: Wharton School Publishing,
2005); Allen Hammond and
C.K. Prahalad, “Selling to the Poor”, Foreign Policy, 142
(May/June 2004): 30-37; C.K.
Prahalad and Allen Hammond, “Serving the Poor, Profitably”,
Harvard Business Review,
80:9 (September 2002); Stuart L. Hart and Clayton M.
Christensen, “The Great Leap:
Driving Innovation from the Base of the Pyramid”, MIT Sloan
Management Review, (Fall
2002); C.K. Prahalad and Stuart L. Hart, “The Fortune at the
Bottom of the Pyramid”,
Strategy+Business, 26 (January 2002): 54-67.
97
potential consumers, employees, and suppliers, there is a need
to develop new social
and economic models of doing business with this segment5.

Present models of micro-
marketing lack the specificity to effectively address this
challenge, as impoverished
market segments are typically evaluated as having little to
contribute to the exchange
process. Thought of in classic “definition of a market” terms,
the poor may have
the desire to purchase but they lack sufficient ability to buy.
When the poor do
have the ability to buy, they are commonly perceived to be a
temporary “target of
opportunity” and ripe for quick exploitation. In the U.S., it is
sad to find some of
the most intensive cultivation of impoverished markets to
include the marketing
of personal injury lawyers, the lottery and “pay day” loan
stores. Of course, the
poor, collectively at least, also spend millions of dollars on
food, housing, clothing,
transportation and many other products.
In this connection, the Market Construction Model (MCM)
proposed by Harvard
University researchers Kasturi Rangan and Arthur McCaffrey in
2004 has the potential
of beginning to address this challenge6. Though the model they
propose is thought
to be most applicable to large infrastructure projects in
developing countries, they
maintain that their arguments would still be valid in dealing
with the macro issues
of global commerce7. In effect, Rangan and McCaffrey suggest
that for traditional
markets to be less exploitive of the poor, the interests of the
impoverished must
be better represented, more clearly understood, and that the

poor must be further
empowered to help shape the products and services that are
provided. This paper
will examine this claim in the context of business practice
aimed at impoverished
markets. Essentially, a modified SWOT analysis of the MCM
will be conducted with
a particular concern for whether the approach should be adopted
by business firms
involved with impoverished market segments in order to better
promote distributive
justice while maintaining an acceptable profit margin for
participating organizations.
As observed in the Corporate Social Responsibility (CSR)
literature, much opposition
to greater economic development worldwide stems from the
perception that residents
in developing countries, mostly the poor, are not being treated
fairly. In this vein,
business models that explicitly broach dimensions such as
fairness and justice to
consumers are particularly timely and welcome.
THE MARKET CONSTRUCTION MODEL
Rangan and McCaffrey’s starting point is that although trillions
of dollars have
been expended by way of investment and aid to developing
countries during the last
twenty-five years or so, it has hardly made a dent in global
poverty8. This point is
echoed by Prahalad, who points out that “for more than 50
years, the World Bank,
donor nations, various aid agencies, national governments, and,
lately, civil society

5 WBCSD, “From Challenge to Opportunity: The role of
business in tomorrow’s society”, a
paper from the Tomorrow’s Leaders group of the World
Business Council for Sustainable
Development, February 2006, <www.wbcsd.org>, pp. 11-12.
6 V. Kasturi Rangan and Arthur McCaffrey, “Globalization and
the Poor”, in The Global
Market: Developing a Strategy to Manage Across Borders,
edited by John Quelch and Rohit
Deshpande (San Francisco, CA: Jossey-Bass, 2004), pp. 335-
360.
7 Ibid., note no. 4, pp. 383-384.
8 Ibid., pp. 341-43.
Santos & Laczniak The heritage and current status of the
Social Business, Volume 598
TABLE 1 A market construction paradigm9
Market operation Market construction
Functional
processes
Exchange paradigm
Selling and promotion
Interest representation
Voice and advocacy

Aim Change choices Change lives (macro)
Outcomes Change behavior (micro) Reconciliation of values and
interests
Business role Represent vested interests Represent
unrepresented customer
interests
Surrogate voice
Serve clients
Intermediator
Sell client/customers to organizations
(public, private)
Vision Lay foundation for prototype markets
organizations have all fought the good fight, but have not
eradicated poverty”10. In
Rangan and McCaffrey’s opinion, a major reason for this is that
this investment
has lacked an appropriate process for aiding the poor11. Based
on their research,
they propose a model of engagement, the Market Construction
Model (see Table 1),
which is “built around a heuristic of interest representation,
voice, and advocacy”12.
The pivot on which they build their framework is the poor
client, who mostly does
not have a voice and whose interests are often poorly
represented in the exchange
process. According to Rangan and McCaffrey, their proposed
model operates under
a different set of assumptions than the traditional market
operation model. While
marketing typically sells the organization to the customer, their

new paradigm “seeks
to sell the customer to the organization, using voice and
advocacy to promote and
represent the unrepresented interests of the poor”13. The
difference of approach in
marketing to the poor as embodied in this model is more than
semantic and shall be
elaborated below.
To begin with, as the global economy has grown and world
logistics have improved,
businesses are increasingly examining market segments that
include large numbers of
impoverished consumers. Their thought process is that while a
single impoverished
consumer has minimal economic potential, there is no shortage
of poor persons.
Thus, even with small profit margins, the collective of
impoverished segments
represents enormous economic value and perhaps tremendous
profit opportunity.
Prahalad estimates this market potential to consist of “4 to 5
billion underserved
people and an economy of more than $13 trillion PPP”14.
9 Rangan and McCaffrey, op. cit., p. 358.
10 Prahalad (2005), op. cit., p. 3.
12 Ibid., p. 357.
13 Ibid., p. 358.
14 Prahalad (2005), op. cit., p. 21. The dollar purchasing power

parity (PPP) measure is a
more appropriate measure than the traditional average per
capital gross domestic product
(GDP) method.
99
The major functional process in the traditional Market
Operation Model (MOM)
is the exchange paradigm, where “knowledgeable customers are
able to sort through
the choices created for them, evaluate their consequences for
their welfare, and then
select the one that meets their private interests”15. In the
exchange paradigm, selling
and promotion become paramount as the customer has to be
literally coerced into
purchasing the company’s products or services. Thus, marketing
under the MOM
- the status quo - involves selling the organization to the
customer16. In the MOM,
the company aims at constantly providing a greater array of
products and services
to the customer so as to gain and retain customers. The business
directives of the
organization consist mostly of representing the vested interests
of owners, investors,
or other partners such as distributors and suppliers. While this
paradigm works well in
many circumstances, especially with affluent and well informed
consumers, it cannot
easily extend to the poor, who do not have a voice, whose
interests are often very
poorly represented, and who have little power in the economic

negotiation process.
Therefore, the alternate paradigm that is proposed is that of
interest representation,
voice, advocacy and the reconciliation of values. The
underlying assumption is that it
is in the long-term interest of the business corporation to draw
out the concerns and
involvement of that customer segment that is often powerless
and excluded. Such an
approach will help defuse some of the suspicion and animosity
towards globalization
that characterizes global trade today.
SWOT ANALYSIS
A SWOT (strengths and weaknesses, opportunities and threats)
analysis (see Table
2) is a simple, straightforward approach that can “serve as a
catalyst to facilitate and
guide the creation of marketing strategies that will produce
desired results”17. The
primary objective of this paper is to evaluate how effectively
the Market Construction
Model (MCM) provides a practical, helping framework for
business firms engaged
with impoverished segments. Using a SWOT analysis, we
examine the factors that
comprise both the internal (strengths and weaknesses) and
external (opportunities
and threats) environments of the model. This allows us to better
understand how
the MCM might be modified and refined in order to make it a
more actionable
framework for better engaging impoverished markets with an
eye to fairness and
justice.

Strengths
There are several persuasive reasons that auger for the adoption
of the Market
Construction Model by business organizations. First, Rangan
and McCaffrey rightly
point out that much of the antagonism towards globalization has
been caused by the
fact that “economic globalization is far too removed and
abstract to be useful to the
poor, who are curiously enough, presumed [emphasis added] to
be the beneficiaries of
16 Ibid., p. 358.
17 O.C. Ferrell, Michael D. Hartline, George H. Lucas Jr., and
David Luck, Marketing Strategy
(Orlando, FL: Dryden Press, 1999), p. 65. See also Nigel
Piercy, Market-Led Strategic
Change (Oxford, United Kingdom: Butterworth-Heineman Ltd.,
1992).
Social Business, Volume 5 100
much of the economic activity”18. Through a process of interest
representation, voice
and advocacy, it is their hope that much of this sometimes
misinformed antagonism

can be eradicated. This is particularly important in the present
situation where there
is a growing distrust of business19. At the core of the proposed
model is an authentic
engagement with the poor with non-exploitative intent. If
profitability is the sole aim
of the business enterprise, there is an increased possibility of
exploitation, particularly
if there is an imbalance of resources, information or financial
leverage on the part of
the customer. Thus, in the case of the aforementioned German
drug company, the
human clinical trials, although essential, exploit the
disadvantages of poor patients
in developing countries. Analyzing their strategy through the
prism of interest
representation reveals that there is an arguable exploitation of
the poor patients due
18 Ibid., p. 350. The positions of Caufield, Hoffmann, Klein,
and Stiglitz are used to arrive
at this conclusion. For further reading of these positions see:
Catherine Caufield, Masters
of Illusion: The World Bank and the Poverty of Nations (New
York: Holt, 1996); Stanley
Hoffmann, “Clash of Globalizations”, Foreign Affairs, 81:4
(2002); Naomi Klein, No
Logo: Taking Aim at the Brand Bullies (New York: Picador
USA, 1999); Joseph E. Stiglitz,
Globalization and Its Discontents (New York: Knopf, 1999).
19 WBCSD, op. cit., pp. 6-7. The Tomorrow’s Leaders group
point out that it could take very
little to turn the combination of distrust of business and concern
over the world’s future
into widespread anger.

TABLE 2 SWOT analysis of the Market Construction Model
(MCM)
Internal
Strengths Weaknesses
Engages the poor with non-exploitive intent
Implements Levitt’s global product idea
with “genuine” customer orientation
Consistent with Vargo & Lusch’s product
co-creation idea
Provides possible “first mover” advantage
for early adopters
Shapes better brand equity by building
trust with skeptical customers
Product co-creation as well as co-
production would lead to greater
acceptance of the corporation by the local
community
Does not consider possible corruption of
local business partners
There are presently no proven metrics for
measuring success using the model
Cedes too much control to customers
(marketing mania)
May not meet company’s ROI targets or
other short run financial measures

External
Opportunities Threats
Consistent with 21st century sustainable
economic development movement and
the triple bottom line approach
Congruent with “socially responsible”
investing
Similar to bottom of the pyramid business
frameworks such as the BOP Protocol
Positive PR opportunity based on authentic
engagement
Political risk of markets is considerable
and not accounted for [nationalization,
war, extortion]
Inherent pressure for ever greater local
autonomy [loss of control]
Vulnerable markets are increasingly
scrutinized and mistakes will become
public [negative PR]
101
to their apparent lack of information concerning possible side
effects and the relatively
lower risk of strokes among the population group being tested.
In cases such as this,

the client becomes a mere means to the financial end of the
company. This is despite
the fact that the company might flaunt itself as being socially
responsible. Consistent
with philosopher Immanuel Kant’s second formulation of his
categorical imperative,
Laczniak points out that “members of the human community,
particularly those most
subject to exploitation, should never be used as an expedient
means to a financial
end”20. The MCM with its core focus on more vigorously
representing the interests
of the poor client provides a framework that treats customers as
ends and not merely
as means to the profitability of the company.
Theodore Levitt in his seminal article, The Globalization of
Markets21, argued
that multinationals need to develop standardized products that
could be produced
and sold throughout the world, thus enabling them to gain
economies of scale.
However, in recent years, there is a growing awareness that
global efficiencies alone
do not sufficiently build nor sustain competitive advantage and
that these initiatives
need to be integrated with responsiveness to local situations22.
In attempting to
include unrepresented customer interests, the MCM advocates
responsiveness to the
poor client at a local level without sacrificing global
efficiencies. Thus, the MCM
implements Levitt’s global product idea but connected to a more
palpable and
genuine customer orientation.

In their path-breaking work involving the service dominant
logic of marketing
(or S-D Logic as it has become known), Vargo and Lusch argue
that Marketing is
evolving to a new evolutionary conception, “one in which
service provision rather
than goods is fundamental to economic exchange”23. According
to Vargo and Lusch,
“a service-centered dominant logic implies that value is defined
by and co-created with
the consumer [emphasis added] rather than embedded in
output”24. The MCM with
its focus on interest representation, voice and advocacy, not
only upholds the dignity
of impoverished customers, but also emphasizes that the route
to sustainable business
is through a co-creation process, whereby value is co-created
with the customer25.
20 Gene R. Laczniak, “Distributive Justice, Catholic Social
Teaching, and the Moral
Responsibility of Marketers”, Journal of Public Policy and
Marketing, 18:1 (1999): 125-
129.
21 Theodore Levitt, “The Globalization of Markets”, Harvard
Business Review, (May/June
1983): 92-102.
22 Christopher A. Bartlett, Sumantra Ghoshal, and Julian
Birkinshaw, Transnational
Management: Text, Cases, and Readings in Cross-Border
Management (New York, NY:
McGraw-Hill/Irwin, 2004). The authors point out that in order
to achieve sustainable
competitive advantage, companies need to develop global-scale

efficiency, flexibility, and
the ability to develop innovations and leverage knowledge on a
worldwide basis.
23 Stephen L. Vargo and Robert F. Lusch, “Evolving to a New
Dominant Logic for Marketing”,
Journal of Marketing, 68 (January 2004): 1-17, p. 1.
24 Ibid., p. 6.
25 The distinction between co-creation and co-production in
Vargo and Lusch’s work is not
very clear. In FP7 they state that “the consumer must determine
value and participate in
creating it through the process of coproduction”, Ibid., p. 11.
We take a broader view of
co-creation to include the customer’s contribution to the
marketing transaction as a natural
extension of all persons having a stake in the economic system.
Thus, the MCM is consistent with the positions of Vargo and
Lusch as well as of
other academicians such as Prahalad and Ramaswamy26.
The MCM also provides possible “first mover” advantage for
early adopters. The
knowledge gained by drawing out previously unrepresented
voices of impoverished
customers enables the company to build a wealth of information

capital. The company
can leverage this knowledge base to gain synergies at a global
level. For example,
Hindustan Lever (HLL), a subsidiary of Unilever, in addressing
the problem of iodine
loss in Indian salt, developed a new technology called
molecular encapsulation. This
technology protected the iodine content in salt from harsh
external conditions.
Unilever was able to leverage this innovation to other countries
besides India such as
Ghana, Ivory Coast, and Kenya, where iodine deficiency is a
problem27.
A major obstacle in the expansion plans of a company can be
opposition from local
communities and groups. For instance, giant retailer, Wal-Mart,
discovered that its
plans to open new stores were thwarted in many places because
of the negative image
it had built in driving local stores out of business28. Recently,
in an attempt to boost
its image, it has revealed plans for working with local small
businesses under what it
calls the “Jobs and Opportunity Zones” initiative as well as
opening stores in socially
deprived neighborhoods29. The MCM, with its focus on interest
representation,
provides a framework for companies to build trust with
skeptical customers, thereby,
shaping better brand equity.
Finally, if businesses embrace the co-creation and co-
production process implied
in the MCM, it will likely lead to an increased involvement of
the local community

and thereby, a greater acceptance of the corporation at the local
level. This is in the
long-term interest of both the corporation and the local
community and of course
is consistent with the stakeholder approach to the oversight of
company operations.
In the ideal, public suspicions about business will diminish with
tangible evidence of
corporations having a genuine customer orientation, that is, by
involving customers
in helping to shape the exchange process.
Weaknesses
Adopting the Market Construction Model is not without its
inherent pitfalls. A major
component of the MCM is the formation of “voice and
advocacy”, whereby the
unrepresented interests of the impoverished are better promoted
and represented.
Specifically, “voice and advocacy” imply greater
communication between poor target
markets and the seller. However, what is the guarantee that this
better communication
will result in a genuine representation of the interests of the
impoverished? Even if the
corporation is honestly committed to the interest representation
of the impoverished,
this objective could be thwarted by possible corruption of local
business partners,
vetoes of operational level decisions by top management and
many other factors.
26 Ibid.; Robert F. Lusch and Stephen L. Vargo, eds., The
Service-dominant Logic of Marketing:
Dialog, Debate & Directions (M. E. Sharpe, 2006); C.K.

Prahalad and Venkat Ramaswamy,
The Future of Competition: Co-Creating Unique Value with
Customers (Boston, MA:
Harvard Business School Press, 2004).
27 Prahalad (2005), op. cit., p. 31.
28 Stephanie Armour, “Growing opposition frowns on Wal-
Mart”, USA Today (Online
edition), December 5, 2005,
<http://www.usatoday.com/money/industries/retail/2005-12-
04-walmart-opposition_x.htm>
29 Jonathan Birchall, “Wal-Mart targets poorer areas in drive to
boost image”, Financial
Times, April 5, 2006, p. 19.
103
Such exogenous factors are things that the model does not
explicitly consider. The
actual process of interest representation might not be as easy as
it seems. The vested
interests of local business partners as well as of presumed
representatives of the
impoverished segment might actually complicate the process.
For example, during
the 1980s, German and British pharmaceutical companies made
good faith efforts
to more efficiently make available and distribute over-the-
counter drug products to
Nigeria’s rural population. These efforts were muted both by
government corruption
and the incompetence of local distributors30.

Today’s business environment is being increasingly
characterized by a sustainability
approach that is better known as the triple bottom line (TBL)
approach which focuses
on economic prosperity, environmental quality, and social
justice31. While uniform
standards exist in financial reporting, there are no such
comparable standards in
social and environmental reporting32. This creates a problem
for evaluating companies
along these social dimensions. The lack of proven or standard
metrics for measuring
a business firm’s social impact using the MCM (or any other
model imputing socially
responsible approaches) can reduce its appeal to both the
business and the investing
community.
In attempting to achieve a more inclusive style of functioning,
one that would
bring “the voice and interests of poor customers to be included
and represented at
the table of policy planning and debate”33, the model focuses
exclusively on an
orientation towards impoverished customers. This would be
tantamount to ceding
too much control to the customers (“marketing mania”), which
might not necessarily
be in the best interests of the corporation. The MCM approach,
in whatever form
it is implemented, must also be realistic enough to take into
consideration that
while giving voice to impoverished segments is a noble goal,
many of these markets
consist of poorly educated and illiterate consumers. Without

informed, independent
guidance, they may be unable to articulate their needs in a
helpful or productive
manner. As Levitt pointed out, the global competitor should
“never assume that the
customer is a king who knows his own wishes”34.
Finally, while the concept of ‘interest representation’ enables
the company to gain
greater penetration in marketing to the impoverished, a
preoccupation with it might
distract the company from increasing its efficiencies which are
important if it is to
meet its ROI targets. For instance, during the 1990s, US
business consultants serving
American companies in Pakistan decided to offer their market
research services to
local organizations looking to ascertain the market potential of
various ideas. While
this venture looked at first glance to be a “win-win” situation,
costs and problems
mounted in conducting the research because the consultants did
not anticipate the
30 Michael R. Pearce, “Nigerian Hoechst Limited”, in Kenneth
L. Bernhardt and Thomas C.
Kinnear, Eds., Cases in Marketing Management, 5th edition
(Chicago, IL: Irwin, 1991), pp.
276-305.
31 For a fuller exposition of the triple bottom line approach see
John Elkington, Cannibals
With Forks: The Triple Bottom Line of 21st Century Business
(Oxford, UK: Capstone
Publishing, 1998).

32 See for instance Henry Schäfer, “International Corporate
Social Responsibility Rating
Systems: Conceptual Outline and Empirical Results”, The
Journal of Corporate Citizenship,
20 (Winter 2005): 107-120.
34 Levitt, op. cit., p. 94.
complications of surveying illiterate consumers or in reaching
female decision makers
in a Muslim culture that shelters women from commercial
contact35.
Opportunities
Opportunities, in the SWOT template, are favorable external
conditions that
might enhance a particular approach or venture. The MCM
offers a framework
for marketing to the poor that is consistent with 21st century
sustainable economic
development. According to the Tomorrow’s Leaders group, it is
directly in the
interest of the business corporation to avoid operating on a
polluted planet in
which billions are too poor to afford the products that are
created36. This has two

implications with regard to the poor: providing goods and
services at prices which
they can afford37; and empowering them so that they can fully
participate in the
process of economic development. In this manner, the MCM is
also compatible with
the triple bottom line approach. In the wake of the corporate
scandals in recent
years, companies are beginning to realize that investors are not
interested solely in
the financial performance of the company but that the social and
environmental
issues are also important. While businesses accept the need to
embrace the societal
and environmental dimensions of their business together with
profitability, there is
no target market development model (to our knowledge) that
enables an integration
of the three dimensions. As a result, businesses continue to
focus on the profitability
dimension and treat the involvement with the other two
dimensions as part of their
CSR. Integration of the three dimensions is possible with the
MCM.
According to the Social Investment Forum, socially responsible
investment (SRI)
assets in the United States rose more than 258 percent from
$639 billion in 1995
to $2.29 trillion in 200538. At the same time, there may or may
not be conclusive
evidence that suggests that socially responsible firms
outperform those that are
not39. However, the fact that SRI assets over a ten year period
from 1995 to 2005
increased four percent faster than the entire universe of

managed assets in the United
States is indicative of a shift in investor preferences40. The
MCM provides companies
with a sustainable business framework that is bound to be
attractive to socially and
environmentally conscious investors.
In 2004, academics from Cornell launched the BOP Protocol
project which was
aimed at developing a framework for companies to engage the
BOP market in a
way that fostered a deeper understanding of the needs and
perspectives of the BOP
35 William J. Carner, “AGT Pakistan”, in Kenneth L. Bernhardt
and Thomas C. Kinnear, Eds.,
Cases in Marketing Management, 7th edition (Chicago, IL:
Irwin, 1997), pp. 165-172.
36 WBCSD, op. cit., p. 6.
37 According to the Tomorrow’s group the “fundamental
purpose of business is to provide
continually improving goods and services for increasing
numbers of people at prices they
can afford”. WBCSD, op. cit., p. 4.
38 Social Investment Forum, 2005 Report on Socially
Responsible Investing Trends in the
United States: 10 year review, January 24, 2006,
<www.socialinvest.org>
39 See David J. Vogel, “Is There a Market for Virtue? The
Business Case for Corporate
Social Responsibility”, California Management Review, 47/4
(Summer 2005): 19-45.

40 Social Investment Forum, op. cit. See also N. Craig Smith,
“Corporate Social Responsibility:
Whether or How?” California Management Review, 45/4
(Summer 2003): 52-76. In
discussing the reputational risk in equity markets, Smith points
out that the “growth in
investing and listing of companies according to social
responsibility criteria has led to a
substantial increase in social and environmental reporting by
firms”. p. 63.
105
segment. This concept closely resonates with the idea of
“interest representation” in
the MCM. In general, there is a certain similarity between the
MCM and the BOP
Protocol in regard to their theoretical thrust and language
although the scope and
intended focus of each approach is somewhat distinct.
An additional opportunity stemming from the adoption of the
MCM is the positive
PR that an authentic engagement with a previously excluded
sector can create.
Business involvement with this impoverished sector has largely
been philanthropic.
This welfare driven approach has not really helped much in the
eradication of
poverty. A long term business perspective that involves the
impoverished segment
in a way that contributes to the development of that segment is
bound to gain

tremendous goodwill for the company. For example, Vikram
Akula, who founded
SKS Microfinance in 1998 has already made it to the Time’s
100 most influential
people in the world list41. The company which has dispensed
about $52 million
in loans to over 200,000 people has attracted the attention of
financial giants like
Citigroup Inc., ABN Amro Holding, and HSBC Holdings; these
firms have already
provided incremental millions of dollars for SKS to lend out.
Threats
Threats, as understood in the SWOT context, are external
factors that might diminish
or suppress the successful utilization or implementation of a
proposed concept. In
terms of the MCM, the model does not sufficiently account for
the political risks
of markets which are considerable in the present business
environment. Despite
the integrative nature of globalization there is disturbing
evidence of a growing
nationalism. Take for instance, the recent hostility in France,
Luxembourg, and
Spain to Mittal Steel’s proposed takeover of Arcelor42. There is
also an increasing
amount of global terrorism that is evidenced in the 9/11 event
and the situation in
the ever perplexing middle-east. These strains could frustrate
the good intentions of
companies that honestly seek to create a more equitable market
situation. Extortion
by the local mafia can also jeopardize the company’s growth
prospects. For example,

SKS Microfinance lost about $300,000 when it had to pull out
of Nizamabad, a town
in India, on account of extortion pressures brought by local
goons43.
Another threat is that greater empowerment of the local
communities and
increased collaboration with local business partners could give
rise to an inherent
pressure for greater local autonomy, which could result in a loss
of overall control.
This could be problematic if the company has to ensure a
certain consistency in
operations particularly in line with its core values. The negative
impact of the
unjust labor practices at Nike’s contractors’ workshops in
developing countries is
a case in point. Even as Nike strove to improve working
conditions at its contract
manufacturing sites, the onslaught of negative publicity
continued.44 And a worse
case business scenario when reaching out to impoverished
markets - since so many are
located in developing (and unstable) countries - is the
possibility of having corporate
41 Julie Rawe, “Vikram Akula: Finding Novel Ways to Support
India’s Poor”, Time, May 8,
2006, p. 147.
42 Philip Stephens, “A perilous collision between nationalism
and globalization”, Financial
Times, March 3, 2006, p. 13.
43 Eric Bellman, “Entrepreneur Gets Big Banks to Back Very
Small Loans”, Wall Street Journal,

May 15, 2006, p. A-12.
44 McAlister, D. T., Ferrell, O. C., & Ferrell, L. (2005).
Business and Society: A Strategic
Approach to Social Responsibility. Boston: Houghton Mifflin
Company, pp. 253-254.
assets nationalized. This situation is currently playing itself out
in Bolivia under the
government context of better serving the poor of that country45.
As vulnerable markets are increasingly scrutinized, there is the
danger of negative
publicity on account of mistakes made46. This negative PR not
only affects sales but also
dampens investor confidence, thereby adversely affecting the
company’s operations.
For example, in the US, certain Athletes Foot shoe franchises,
in an attempt to create
jobs for the hard core unemployable and to build empathy with
their urban youth
customers, hired ex-convicts as store sales reps. However,
because the ex-cons hired
as clerks were not given benefits (full time employee status was
viewed as too risky)
nor were they allowed to handle any money, the media
characterized the situation as
likely exploitive47.

IMPLICATIONS OF THE SWOT ANALYSIS
Our SWOT analysis reveals that the MCM presents a
tremendous incremental
value for firms that engage the impoverished market segment.
However, there are
certain areas that the model appears to imply but does not
explicitly mention. In
our opinion, these dimensions will enhance the attractiveness of
the model to the
business community and society at large. For one, an important
functional process
that the model implies (but does not state) is that of “co-
creation of value” with
impoverished consumers. Co-creating results in a “win-win”
situation for both the
firm and the impoverished customer. Further, the impoverished
customer is actively
engaged in the shaping of the economic process.
Changing lives at a macro level is not a sufficient aim from the
perspective of the
business firm. The success of the firm depends to a large extent
on its ability to be
profitable. The MCM takes this dimension for granted.
However, the profitability
dimension needs to be visualized differently in the MCM, not as
short term
profitability but long term profit management. We shall
elaborate further on this
point in the next section.
One of the outcomes for firms that follow the MCM will be a
reconciliation
of values and interests. However, there are other outcomes such
as customer

empowerment, building long-term relationships and creating
sustainable business
initiatives. These dimensions enable the firm to be successful
over a longer period of
time.
Under its business role, the MCM mentions a number of points
which really
may not add significant incremental value such as surrogate
voice, serve clients,
intermediation and so on. In our opinion, there are three main
business roles that
the MCM should play. These are: articulating unrepresented
customer interests;
facilitating value creation; and investing in future consumption.
45 Alvaro Zuazo, “Evo Morales defends nationalization of gas”,
Miami Herald, May 4,
2006, <www.miami.com>; Vivian Sequera, “Venezuela aids
Bolivia gas nationalization”,
Mercury News, May 26, 2006 <www.mercurynews.com>; See
also the interview with
Bolivian President Evo Morales by Time’s Tim Padgett and
Jean Friedman-Rudovsky, “A
Voice on the Left”, Time, June 5, 2006, p. 37.
46 See the discussion on reputational risk in consumer markets
in Smith, op. cit. pp. 60-63.
47 Lance Kidder, “Athlete’s Foot”, in Patrick E. Murphy and
Gene R. Laczniak, Marketing
Ethics: Cases and Readings (Upper Saddle River, NJ: Pearson
Prentice Hall, 2006), pp. 161-
163.

107
The vision of the MCM is to lay the foundation for prototype
markets. As the
MCM is meant to provide a blueprint for business involvement
with impoverished
market segments there should be further qualification
concerning the prototype
market envisioned that relates to this segment. In our opinion,
the vision of the
MCM, properly understood and developed, lays the foundation
for prototype
markets that empower the poor while simultaneously creating
“win-win” situations
for buyers and sellers.
THE SYMBIOSIS BETWEEN THE MARKET
CONSTRUCTION MODEL
(MCM) AND THE CORPORATE MARKET OPERATIONS
MODEL (MOM)
In our opinion, the purpose of the MCM is not to replace the
time tested model
of typical market operations with its inherent and proven
economic efficiencies.
The Market Construction Model is not designed to be a
corporate charity program.
Instead, when organizations are addressing impoverished market
segments, the
MCM is overlaid on the normal MOM in order to help create a
more sustainable
exchange relationship that genuinely benefits both buyers and
sellers over time but
especially in the long run.

Like the market operations model (i.e. the traditional approach
to market
development advocated in most global marketing playbooks),
the MCM aims to
change buyer choices but unlike the MOM, it also strives to
change customer lives.
It clearly is intended to shape buyer behavior but to do so in a
way that represents
the values and interests of the impoverished segment. The MCM
supplements the
MOM in a substantial way but does not destroy it - long term
profitability is still
an important and non-negotiable part of the marketing equation.
The MCM can be
seen as modifying the MOM with an approach that emphasizes
on-going partnership
perspectives, consistent with Vargo and Lusch’s vision of
customers as partners in the
creation of exchange (see further discussion below). In this
way, the MCM celebrates
customer empowerment rather than defaulting to the short term
exploitations of
customers that too often occur when dealing with impoverished
segments of the
market that have limited power.
At its best, the MCM can be seen to be an investment in future
consumption by
poor market segments due to the sustainability perceived in
having a long term,
continuing exchange relationship. Certainly, investment by
firms in the manufacturing
capacity to deliver future production is not controversial. In
fact, such future driven
investment is usually perceived to be a wise business practice.
When new investment

in production capacity is announced, the share price of the
company at focus often
increases. Similarly, if implemented well, albeit with short term
costs, the MCM can
serve as a blueprint for enhancing future consumption by the
poor. What minimally
seems to be required by companies willing to explore the MCM
is the following:
• A longer term financial view - not one that is driven by
quarterly profit increments
or even annual ROI targets. The market development of
impoverished segments
is inherently a longer process than one that is dictated by the
length of the
Julian calendar and/or annualized share performance scores.
[Consider the
development of on-line selling by e-Bay and the number of
consecutive quarters
(20+) of losses before the advent of “black” figures].48 The
acceptance of long
48 Cohen, Adam (2002). The Perfect Store: Inside eBay. New
York: Little, Brown and Company.
term profit management rather than short term profit
maximization is essential.
The MCM will sacrifice short term profits in order to lay the
groundwork for

continued participation of impoverished segments in exchange
relationships that
will benefit their interests in the long run. Increasingly, large
corporations (e.g.
Coca Cola) are resisting the provision of quarterly profit
guidance to investment
analysts because they find such a focus antithetical to the
corporate strategic
planning process49.
• “Interest representation” of the poor along with their advocacy
and empowerment
is the new marketing concept of the MCM approach. Genuine
service to customers
has proven to be the winning marketing formula across all types
of markets.
Just as the traditional marketing concept includes “profitability”
as one of its
essential pillars, the MCM presumes that mandated advocacy
for the poor and
their authentic betterment in the exchange process will more
effectively lead to
sustainable, on-going relationships with an economic value
exceeding the short
term approach of the MOM. For example, Casas Bahia, a
department store chain
operating in the most impoverished sections of Brazilian cities
has a decade’s
long track record of focusing exclusively on the destitute
consumers of San Paulo
and Rio de Janeiro. While the retail chain has been criticized by
some for its
above average interest rates on credit sales, it has generated an
incredible loyalty
and positive word-of-mouth among its economically challenged
customers50.

PROPOSED MODIFICATIONS TO THE MODEL
TABLE 3 Modified Market Construction Model
Functional
processes
Interest representation of all stakeholders, especially consumers
Mandated advocacy for the poor
Co-creation of value with all stakeholders, especially consumers
Aim Long term profit management
Change lives (macro)
Outcomes Reconciliation of values and interests
Customer empowerment
Long-term relationships
Sustainable business initiatives
Business role Including unrepresented customer interests
Facilitating value creation
Investing in future consumption
Vision Laying the foundation for prototype markets that
empower the poor
while creating “win-win” situations for buyers and sellers
49 Gordon Platt, “United States: Coca-Cola puts the lid on
earnings guidance”. Global Finance,
17/1 (January 2003): 10. Other large corporations that have
followed Coca-Cola’s lead
include McDonald Corp. and Motorola. See Phyllis Plitch,
“Moving the Market - Tracking
the Numbers/Street Sleuth: More Companies Put Brakes on
Frequent Forecasts; Quarterly

Earnings Guidance can take Analysts’ Attention Away from
Long-Term Goals”, Wall Street
Journal (Eastern Edition), April 11, 2006, p. C-3.
50 Miriam Jordan, “A Retailer in Brazil Has Become Rich By
Courting Poor”, Wall Street
Journal, June 11, 2002 in Murphy and Laczniak (2006), op. cit.,
pp. 109-112. See also
Prahalad (2005), op. cit., pp. 117-146.
109
THE RELATIONSHIP OF THE MARKET CONSTRUCTION
MODEL
(MCM) TO THE SERVICE DOMINANT LOGIC (SDL) OF
MARKETING
THEORY
One might ask where the Market Construction Model fits into
the broad realm of
marketing theory. For starters, the MCM is strongly consonant
with the thinking
outlined in the Service Dominant Logic (SDL or SD Logic)
perspective on marketing
activities conceptualized by Vargo and Lusch51. Such a
connection is extremely
important because progressive marketing firms will increasingly
conceive their future
strategy with the “service centered” orientation outlined in the
SDL (or related
models) as their strategic focal point.
Like SDL, the Market Construction Model emphasizes the
importance of operant,

not operand, resources. Operant resources focus on actors
proactively shaping the
usage of resources rather than the more passive (and traditional)
approach of operand
resources (e.g. land, raw materials) being acted on. In the
MCM, the knowledge
and insight of the customer, despite the customer’s relative lack
of financial assets,
is seen as necessary to the co-production of a sustainable
economic relationship;
that is, the role of the customer is postulated to be
unequivocally operant precisely
because customers bring knowledge to the exchange
relationship that sellers may
not routinely possess. This notion is further elaborated below as
we show how the
MCM connects to the Service Dominant Logic theory of
marketing and embodies
its philosophy.
Foundational Proposition 4 (FP4) of the SDL conceives of
knowledge as the
fundamental source of competitive advantage. This idea is
specifically vitalized in the
MCM by providing customer empowerment to impoverished
marketing segments.
By stipulating that the input of these “bottom-of-the-pyramid”
(BoP) consumers
will prove extremely useful, their preferences and “knowledge”
are captured in the
product planning process. Put another way, the impoverished
market segments at
focus in the MCM are viewed to be rich in their insights if not
in their per capita
financial buying power.

FP6 of the SD Logic holds that the customer is always a co-
producer not merely
a “target” of market offerings as is often the case in the
traditional marketing
model. Our MCM approach sees the customer not only as a co-
producer but a “co-
creator” in the sense that the customer’s contribution to the
marketing transaction is
viewed as a natural extension of all persons having a stake in
the economic system.
Such a conceptualization is consistent with the stakeholder
theory of management
whereby “economic claims” of parties other than
investor/owners are important.
It also resonates with various doctrines of religious thinking,
including Catholic
Social Thought, which holds that persons have a right and
responsibility to actively
participate in the economic system as part of a continuation of
God’s creation52.
FP7 of the SD Logic points out that a business enterprise can
only offer a value
proposition but it requires customers to determine its ultimate
value. In other
words, customer representation and empowerment are central to
a contemporary
51 Vargo and Lusch (2004), op. cit.; Lusch and Vargo (2006),
op. cit.
52 National Conference of Catholic Bishops, Economic Justice
for All: Pastoral Letter on
Catholic Social Teaching and the U.S. Economy (Washington,
D.C., 1986), n. 15. See
also Catholic Church. Pontificium Consilium de Iustitia et Pace,

(2004). Compendium of
the social doctrine of the church (Cittá del Vaticano;
Washington, D.C.: Libreria Editrice
Vaticana; United States Conference of Catholic Bishops, 2004),
p. 142.
perspective of marketing because of the inherent partnership
potential they provide.
In the MCM, the continuous involvement of BoP customers is
seen as essential due to
the model’s emphasis of long term and sustainable relationships
rather than the short
term and exploitive situations that too often characterizes sales
to impoverished
markets.
Finally, FP8 of the SDL conceives of marketing as “customer
orientated and
relational”. It is a process that extends in both directions well
beyond the point of
economic transaction, i.e. the exchange. As Vargo and Lusch
write, “…humans are
both at the center and are active participants in the exchange
process. What proceeds
and follows the transaction as the firm engages in a
relationship…with customers
is more important than the transaction itself”53. Applying this
proposition to the
MCM, we find advocacy for and representation of customer

views to be essential
to the implementation of our model. With both the SDL and the
MCM the old
view of ‘transactions begetting revenue leading to short term
profit’ is replaced by a
perspective that begins with granting the importance of ongoing
relationships; those
in turn engender customer satisfaction and long term
profitability. In this fashion, the
MCM provides a blueprint for sustaining and improving
shareholder value.
THE MCM AND OTHER BOTTOM OF THE PYRAMID
BUSINESS
FRAMEWORKS
With the ascendance of economic globalization, the articulation
of paradigms to
engage impoverished individuals in developing markets should
not be surprising,
especially given the raw numbers of persons that comprise the
global marketplace.
Quite prominent among these efforts is the public policy driven
approach to
eradicating poverty of Jeffery Sachs54. Another more corporate
centered approach is
the comprehensive business blueprint provided by Prahalad55.
And, perhaps inspired
by Pralahad and Hart, is the dynamic Bottom of the Pyramid
(BoP) business protocol,
spearheaded by a group of academics from Cornell
University56. The framers
characterize their protocol as a roadmap to “inclusive
capitalism”57.
Beginning in 2004 and continuing with ongoing collaborations

with various firms
and foundations, the BOP protocol is a systematic attempt to
generate “a structure
and supporting logic” that will stimulate partnership and
economic development
in economically challenged regions of the world. The idea is to
create ventures
that possess both economic payoff and sustainability. The BoP
protocol attempts
to network MNCs and local entrepreneurs in a manner that will
create economic
opportunities with a “win-win” outcome that is consistent with
the “triple bottom
53 Vargo and Lusch (2004), op. cit., p. 12.
54 Jeffrey D. Sachs, The End of Poverty: Economic Possibilities
for Our Time (New York:
Penguin Press, 2005).
55 Prahalad (2005), op. cit.
56 Erik Simanis, Stuart Hart, Gordon Enk, Duncan Duke,
Michael Gordon, and Allyson
Lippert, Strategic Initiatives at the Base of the Pyramid: A
Protocol for Mutual Value
Creation, Version 1.0, February 17, 2005, <www.bop-
protocol.org>
57 Ibid., p. 2.
111
line” approach to business operations58. The BoP protocol is

theoretically rich, in
part, because it specifies operating guidelines (e.g. humility,
patience, the creation of
mutual value) and includes its own code of conduct (e.g.
equitable profit sharing, TBL
orientation). Significantly, the protocol emphasizes the import
of dialog with a cross
section of locals and recommends training for on-site
management representatives
in participatory learning techniques. Its social inclusiveness is
showcased by the
importance given to maintaining a visible local presence as well
as the necessity of
supporting infrastructure. In 2005, this BoP approach was field
tested in Kenya via a
partnership with SC Johnson (Wisconsin, USA) and Kickstart,
the earlier mentioned
manufacturer of micro irrigation pumps, in order to increase
production of Pyrethrum
which SC Johnson uses as an ingredient in their insecticides.59
The theoretical thrust of the BoP protocol and its descriptive
language are
somewhat similar to that of the Market Construction Model
(MCM). However,
there are some key differences in focus and emphasis. The BoP
protocol is concerned
primarily with enterprise creation whereas the MCM is centered
especially on the
exchange relationship between buyers and sellers. The BoP
protocol is focused on
the value chain elements leading to sustainable enterprise
creation, whereas the
MCM is motivated by improved market communications that
creates an assurance
of fairness for customers when consumption opportunities occur

for BoP buyers.
The BoP protocol seems designed mostly for developing
economies while the MCM
can be applied to impoverished segments in affluent economies
as well. Significantly
however, both models attempt to provide real value and greater
social justice to
impoverished individuals as they are shaped by expanding
economic activity.
CONCLUSION
For reasons discussed above, we believe that the Market
Construction Model
as described and modified in our analysis holds great potential
for better serving
impoverished markets without the exploitation that has too
often characterized
these exchanges. In presenting our SWOT analysis we tried to
be realistic about the
weaknesses of the model as well as the external threats inherent
in its adoption by
business firms. That said, we find that the MCM provides a
promising approach
- rooted in justice and fairness to consumers - that can be used
in establishing and
maintaining business relationships with impoverished market
segments. The notion
of partnering with the poor in a way that gives them voice,
advocacy, and a seat at the
table from which to help shape the exchange process is also
consistent with modern
marketing perspectives of building relationships, especially via
the SDL framework,
in a manner that is also amenable to non-exploitive
globalization. Of course, as is

often the case, the challenge lies in the details of
implementation and the setting
forth of actionable guidelines about that MCM process as firms
experiment with
operationally refining this model. In future papers, we hope to
supplement and build
on the MCM to show how such approaches can be both more
robust as well as better
linked to the concept of corporate social responsibility.
58 See also Stuart L. Hart, Capitalism at the Crossroads: The
Unlimited Business Opportunities
in Solving the World’s Most Difficult Problems (New Jersey:
Wharton School Publishing,
2005).
59 Ibid.
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International Journal of Management, Accounting and
Economics
Vol. 2, No. 9, September, 2015
ISSN 2383-2126 (Online)
© Authors, All Rights Reserved
www.ijmae.com
1075
The Comparison between NGO Marketing and
Conventional Marketing Practices from SWOT
Analysis, Marketing Mix, and Performance
Evaluation Perspectives
Fong Mun Yee1
Center for Southern New Hampshire University (SNHU)
Programs, HELP
College of Art and Technology, Kuala Lumpur, Malaysia
Rashad Yazdanifard
Center for Southern New Hampshire University (SNHU)
Programs, HELP

College of Art and Technology, Kuala Lumpur, Malaysia
Abstract
The study aims to let those who have altruistic impulses to
know deeper about
how marketing strategy can actually be applied on non-
governmental
organizations (NGOs). As there are misunderstandings that
marketing is only
available to corporates, some of the NGOs have lost their
opportunities to raise
more funds and as a result help more people in need. For this
purpose, the paper
includes the study on how marketing strategies are being used
by NGOs.
Besides, the study of conventional marketing is also being
written on paper in
order to clear up the misunderstandings. This paper uses some
of the
organization’s examples to help provide discussion. Throughout
the study, the
formulae to formulate, implement and evaluate is the same.
However, the ways
to formulate make the differences as the purposes of NGOs and

corporates are
different. As a conclusion, this study will cause NGOs to realize
the importance
of marketing towards their mission and also their way to
sustainability.
Keywords: NGO marketing, conventional marketing practices.
Cite this article: Yee, F. M., & Yazdanifard, R. (2015). The
Comparison between Ngo
Marketing and Conventional Marketing Practices from SWOT
Analysis, Marketing Mix, and
Performance Evaluation Perspectives. International Journal of
Management, Accounting and
Economics, 2(9), 1075-1087.
1Corresponding author’s email: [email protected]
http://www.ijmae.com/
Economics

www.ijmae.com
1076
Introduction
There are different classifications of non-governmental
organizations. For example,
culture, education and research, health, social services and
environment (Tabaku, &
Mersini, 2014). Non-Governmental Organizations’ purposes are
not about gaining profit
but to build awareness and so to help those in needs
(Yazdanifard, Massoumian, &
Karimi, 2013). The objectives of NGOs are somehow different
from corporations. Their
objectives are like fundraising, getting more volunteers, create
awareness and look for
some support from corporates (Blery, Katseli, & Tsara, 2010).
There will not be any
contributions from the donors if the NGOs are not recognized.
Hence, marketing plans
are needed to create awareness among the people and so to gain
support. For example,

World Wide Fund for Nature has implemented marketing plans
to promote the protection
of animals threatened with extinction and so to get the supports
from donors. The
examples of NGOs are World Vision, Care and Oxfam
International (Aldashey &
Verdier, 2009). Some of the Non-Governmental Organizations
(NGOs) serve their own
countries but also other countries. According to previous
studies, some of the NGOs did
not have their own marketing departments like private and
public companies (Blery,
Katseli, & Tsara, 2010). NGOs did not want to implement
marketing strategies as they
thought those strategies are manipulating. Due to the lack of
understanding towards
marketing, NGOs also thought marketing methods are hard to be
applied because of the
unchangeable products like ideas and mission and price that
cannot be fixed (Blery,
Katseli, & Tsara, 2010). Besides, NGOs were being argued that
they may spend a lot on
marketing to build the awareness but had forgotten to help those
in need (Benett, 2007).

However, the perceptions of NGOs toward marketing have
changed. NGOs implement
marketing strategies to sustain, to help more those in need, and
so to satisfy those who do
not know how to help (Aldashey & Verdier, 2009).
Marketing is important for any type of businesses (Wall-To-
Wall Marketing, 2015).
Conventional marketing is generally used by corporations which
the ultimate purpose is
to earn more profits. The marketers focus on the use of the
marketing mix which are
product, price, place, and also promotion (Grönroos, 2009). The
corporates offer different
types of products and services and they set prices for each
products and service offered.
The corporates’ primary purpose is to gain profit. Therefore,
they will need strategic
marketing plans to increase sales. The corporates have to target
who are their potential
customers. Besides, the corporates may need marketing plans in
order to tighten the
relationships with customers as it will be more expensive to
turn prospects into customers.
Loyal customers are more likely to recommend to their friends

or family members the
products or services when they are happy about the values and
services provided by the
corporate. From another perspective, maintaining relationships
with customers allow the
corporates to gain more reputation (Richmond, 2012).
The Comparison between NGO Marketing and Conventional
Marketing
Practices from SWOT Perspective
In order to create a good strategy, NGOs and corporates have to
implement SWOT
analysis (Hooley, Saunders, & Piercy, 2004). The marketers
first have to determine the
strengths, weaknesses, opportunities and threats (Mayer &
Vambery, 2008). Well known
identities can be the strength for both NGOs and industries.
However, the weakness of
Economics

www.ijmae.com
1077
both NGOs and corporates might be the lack of marketing
professionals. Besides that, the
opportunity may be the subsidies from the governments whereas
the threat may be the
economic factor like deflation that cause problems to NGOs and
corporates. Both NGOs
and corporates can also use Porter’s five forces analysis when
doing SWOT analysis.
Porter’s five forces which include the rivalry among existing
competitors, the threat of
new market entrants, bargaining power of buyers, bargaining
power of suppliers and the
threat of substitute products or services can be used to
determine external opportunities
or threats (Minton, 2010).
The strengths of the NGOs will probably be the selling price for
the missions and also
the costs of advertisements in newspaper (Blery, Katseli, &
Tsara, 2010). The price is

low. Every donors can donate according to their own will. For
example, the Word Wide
Fund for Nature’s product is the mission to adopt an animal and
its price can be either 3
euros, 5 euros, 10 euros or other prices (World Wide Fund for
Nature [WWF], n.d.).
Besides, World Wide Fund for Nature can place advertisements
in newspapers for free
(Blery, Katseli, & Tsara, 2010). However, the weakness of
NGOs is the capacity to
communicate with the public. Some of the NGOs have to pay
for the manpower in order
to sustain (Blery, Katseli, & Tsara, 2010). Besides, there are
donors who may want to
donate but they did not own a credit card so they are unable to
donate to the organizations
through online. The advancement of technology and internet
allows NGOs to advertise
with zero payment (Blery, Katseli, & Tsara, 2010). From
another aspect, the internet
allows NGOs to reach out to the market more effectively as the
users can view the
advertisements at any time and at any places (Rollyson, 2012).
For example, social media

sites like Facebook has a sharing function that allows the users
to share their posts or
videos (Darwell, 2013). When the users who have the interest to
help those in need, they
can share the related posts to others who have the same interest.
Whereas the threat is the
cost for TV advertisements because NGOs cannot invest on TV
advertisement which
originally allows them to communicate more effectively with
the people. Besides, the
numbers of donors will decrease after some time because of
product life cycle (Mayer &
Vambery, 2008). For example, they may have concerns towards
breast cancer awareness
but have forgotten about the concerns for animals. In addition,
governments in Canada
and U.S. reduced the financial supports and has shifted the
responsibilities to NGOs
(Wymer, Knowles, & Gomes, 2006). Thus, NGOs have more
difficulties to help those in
need. From another perspective, NGOs also have their
competition like corporates. The
competition is becoming stiffer as the numbers of NGOs are
increasing.

The corporate’s strength may be having creative employees who
can create high tech
products and to have higher market shares than others (Rice,
2010). For example, Apple
Company’s strength is its products like iPhone, MacBook and
iPod (Ebscohost’s
database, 2015). The information can be saved in other devices
automatically without
needing users to share or email. The weakness may be the types
of productions are less.
However, the corporates can expand its products types by doing
research and
development. Furthermore, there may be the unreliable channels
of distribution or the
lack of capacity (David, 2011). The corporates can take control
by changing the vendors
or implement forward integration strategy. Besides, the
corporates can also increase its
capacity by gaining more shareholders by implementing
strategic marketing plan. From
another aspect, corporates may be facing opportunity and threat
at the same time. The
opportunity may be the increasing amounts of subsidies by
government but the threat may

Economics
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1078
be the invention of substitute products. For example, Apple
Company introduced iPhone
6 whereas its competitor, Samsung introduced Samsung S6 at
the same time (Briden,
2015). It showed the rivalry among the competitors as both of
the companies were the big
giants in the market as at 1st of July, 2015. Both opportunities
and threats are beyond the
corporates’ control but the corporates can change the
weaknesses or threats into strengths
or opportunities by implementing strategic marketing plans
(Goetz, Hoelter, & Krafft,

2013).
The Comparison of Product Planning between NGOs and
Corporates
According to Mayer and Vambery (2008), every product has its
own life cycle. Product
life cycle can be divided into four stages. For example,
introductory stage, growth stage,
mature stage and decline stage. Introductory stage is when the
product is new and just
starts being marketed. At this stage, there will be some
customers who are innovators,
who will be the first to buy and try the new product. Followed
by early adopters, they will
follow the innovators to consume the products or services (Huha
& Kim, 2008). Growth
stage is when the sales are likely to grow and stop whereas
mature stage is when the sales
of products reaches its peak. Lastly, decline stage is when the
sales are dropping. After
that, the product’s life cycle will come to an end and the
product will be driven out from
the market.
NGOs do not sell products or services but they sell mission and
ideas (Blery, Katseli,

& Tsara, 2010). They sell missions and ideas in order to raise
funds and help those in
need (Jordan, 2008). For example, World Vision’s mission is to
help the poor ones (World
Vision, n.d.). Individuals or companies who agree with the
mission will likely donate or
even join NGOs to help. Furthermore, NGOs may sell mission
or ideas in order to gain
public awareness on the issues. For example, Amyotrophic
Lateral Sclerosis (ALS)
association’s mission is to treat ALS patients. It had
successfully built the awareness of
public towards the disease by creating the event called the Ice
Bucket Challenge (ALS
Association, 2015). Due to the campaign, ALS association
successfully raised $220
million in order to implement research to find the way to cure
the disease (ALS
Association, n.d.).
For corporates, there are different types of products like
consumer products, shopping
products, specialty products, unsought products and business
products (Boundless.com,

n.d.). Consumer products are goods for personal or household
usage. The examples are
clothing, cosmetics, nutritional supplements, cleaning materials
and insecticides
(Schettler, 2006). Shopping products are the goods that the
consumers will have to
compare before purchasing. For example, car, house, laptop and
computer software.
(Hsiao, 2009). Whereas specialty products are products that are
unique and hard to get,
such as limited edition handbags and shoes that are made by
famous designers (Lamb &
Dunne, 2011). Besides, there are also unsought products which
customers buy because of
fear, precaution or need. For example, fire extinguishers, life
insurance policies and
pharmaceutical products. Business products are products that
will be sold to other vendors
or to the end consumers. The numbers that businesses will buy
are large in amounts
compared to consumers’ purchases quantities (Richmond, 2012).
The Comparison of Pricing Strategies between NGOs and
Corporates

Economics
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1079
For NGOs, there are no fixed charges for the missions or ideas
to be sold. However,
NGOs will need more funds to help those in need and so to pay
to their personnel (Blery,
Katseli, & Tsara, 2010). NGOs do not name the price as
“payment” but “gift” (ALS
Association, n.d.). NGO like ALS association suggests different
gift amounts like $25,
$50, $100 and $500. When the donor does not know how much
to donate, the suggested
choices enable the donor to choose and pay. Besides, the donor
can also donate in other
amounts by filling the box given on the billing information
form.

For corporates, the selling prices are fixed for products and
services. Besides, some of
the companies use price to gain competitive advantages (Dass,
2013). For example,
Costco Wholesale’s mission is to provide quality goods and
services at the lowest possible
quality (Costco Wholesales, n.d.). The customers buy the
products or services not only
because of the selling prices but also the values they receive.
Some of the companies may
cut down the prices in order target low income consumers.
However, there are also
companies who increase the prices to show their brand
identities.
The Comparison of Place Strategies between NGOs and
Corporates
Donors or volunteers can find NGOs via internet or even visit to
their centers (World
Visiom, n.d.). They can contribute via online or contribute at
their center. For example,
World Vision has its official network site and official profiles
at social media sites like
Facebook and Twitter. The donors and volunteers can easily
find NGOs by typing the

names. Besides, donors and volunteers can also search the lists
of NGOs using Google.
The official pages of NGOs show their missions and ideas.
Besides, the addresses will
also be shown on the official pages which allows the ones
interested to visit their centers.
Furthermore, the prospects can also find the missions in the
newspaper. According to
Forstorp (2007), when there was the occurrence of Tsunami,
there was billing form
displayed below the news article. The donors could fill in the
details and send it to the
centers.
Corporates’ products or services can either be found in store or
online. As the products
or services are different, the places to sell may be different. For
example, the place may
be at a cinema, coffee shop, food halls or shopping malls
(Hsiao, 2009). Different places
provide convenience to the customers. The customers can
choose to go to any distributors
based on their time feasibilities and locations. Some of the
customers will likely to go

malls to shop as they can have fun with their family or friends.
Whereas, some of the
customers prefer to shop online because of time constraints.
From another perspective,
some of the consumers prefer to purchase online as they can
compare the prices of
different brands in the easiest way. No matter it is a brick
mortar store or a click store, the
customers will be satisfied as long as they get the values they
expected.
The Comparison of Promotion Strategies between NGOs and
Corporates
Promotion mix includes advertising, personal selling, sales
promotion, publicity, word
of mouth and public relations (Nour & Almahirah, 2014). The
promotion tools can also
be used through medium like direct mail, word of mouth,
television, radio, newspaper,
internet, signage, direct mail and telephone (Tuten & Solomon,
2015). With the
advancement of technology, some of the promotion mix like
direct mail, word of mouth,

Economics
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1080
newspaper can be done via internet. For example, social tagging
enables web users to
express their thoughts using “tags” at Facebook, Twitter or even
Instagram (Hyoryung &
Kannan, 2014). The others users will be noticed because of the
“tags”. Furthermore,
NGOs can search for the same groups of people based on the
tags. In addition, the donors,
volunteers, consumers or even business customers can use smart
phones, laptops or even
computers to search for NGOs, industries and also the products
information (Xia &
Pedraza-Jiménez, 2015). Most of the NGOs and corporates
utilize the internet to promote
their products or services. Using internet, NGOs and corporates

are able to reach their
purposes easier. To create word of mouth, NGOs and corporates
can employ bloggers,
experts and ambassadors to advertise the missions and ideas
(Tuten & Solomon, 2015).
Besides, NGOs’ and corporates’ official links can be included
in the blogs so those who
are interested can easily get to NGOs’ official sites.
NGOs implemented different types of promotion strategies to
reach the purposes. For
example, ALS association had successfully built the awareness
of public towards the
disease by introducing Ice Bucket Challenge (ALS Association,
2015; Mayer &
Vambery, 2008). The participants of Ice Bucket Challenge had
to tell the purposes of
doing it and then pour the ice water on their bodies. Nominating
the others enabled the
messages to be passed on to more people. Adversely, some of
the NGOs’ promotion
strategies failed because of wrong methods. Some NGOs use
celebrity endorsements.
However, NGOs will not need to give any payments. The
celebrities may receive the

payments in other forms. For example, he or she can build a
better image or get involve
to satisfy his or her needs. Some of the celebrities were being
doubted because of their
credibility (de los Salmones, Dominguez, & Herrero, 2013).
However, it can be a
successful marketing strategy if the credibility is there because
he or she can influence
the audiences’ emotion towards the mission. With the use of
celebrities, the messages can
be passed around more effectively as they have a lot of
followers. Besides, media may
report the events because of the celebrities. NGOs can promote
indirectly at the same
time. When NGOs are promoting via press, NGOs should also
include information about
the advertising fundraising events and also the information
about community services
(Mayer & Vambery, 2008). For example, after Tsunami tragedy,
the press were trying to
prove its credibility by attaching the pictures which showing the
tragedy situations and
writing descriptions about how the victims are suffering
(Abdullah, Husain, Bokhari,

Jano, Kamarudin, Saad, 2014; Forstorp, 2007). Besides, NGOs
should also invite press
workers to join the events as they may need news to write about
their articles. At the same
time, it also enables NGOs’ messages to be promoted through
the articles. The articles
can be used to attract more donors, volunteers and so to
increase the awareness among
public.
Corporation like Coca-Cola held campaigns via social media
and one of the campaigns
was “Share a Coke Can” (Hepburn, n.d.). The customers have to
purchase at certain
displays all around the world. They snapped the pictures of the
Coca-Cola can which
labelled their names and hashtag “ShareaCoke”. The responses
were good as there were
730,000 glass bottles were being personalized via online and
235,000 tweets about the
event. As the idea was good which enabled the customers to put
their names on the cans,
it created the topic among their friends and family who saw the
tweets or posts. From

another aspect, the campaign was successful as there were more
than 150 million
personalized bottles sold. Celebrity endorsements are also
popular among the
Economics
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1081
corporations especially when they want to get the instant
attention from the public. Some
of the customers purchase the products from the new set up
companies not because of the
products themselves but the celebrities’ credibility. Besides, the
corporates endorse the
celebrities for their brands as they want the prospects or
customers to think of their brands
when there are discussing about the celebrities (Mukherjee,

2009). Besides, the prospects
and customers can easily think of the brands which are
represented by celebrities because
the brands with celebrities can easily being differentiated in the
market. In addition, the
customers will likely to stick to the brand as they are satisfied
with the products or
services.
The Comparison of NGOs and Corporates in Performance
Evaluation
To evaluate whether the marketing strategies is effective or not,
the marketers will
need to have quantitative marketing measurement metrics and
qualitative marketing
measurement metrics. The metrics used for both NGOs and
industries are the same but
the only differences are the elements that each needs to be
evaluated. Quantitative
marketing measurement metrics is which the marketers will be
evaluate base on the
numbers of sales, profit margins, and also the numbers of
customers. For NGOs, the
marketers will be evaluate base on the amount of funds, the
numbers of donors and also

the numbers of volunteers (Šalkovska, & Ogsta, 2014). Social
tagging is also one of the
ways to measure the performances of online campaigns. The
tags will group the people
who have the same interests (Hyoryung & Kannan, 2014).
Hence, it enables the NGOs
and corporates to evaluate the effectiveness of the events.
Whereas qualitative marketing
measurement metrics are which marketers have to evaluate base
on customers’ feedbacks
or behavior (Benett, 2007; Šalkovska, & Ogsta, 2014). For
example, tags enable the
corporates to know about customers’ preferences, customers’
perceptions towards the
brands and products and customers’ loyalty. Whereas, the
marketers for NGO may want
to know about the donors’ perceptions about the missions and
also campaigns. However,
there are some of the challenges for marketers (Tuten &
Solomon, 2015). The words used
by the customers may carry different meanings because of
different cultures. Besides, the
marketers may define the collected data wrongly (Leeflang,
Verhoef, Dahlström, &

Freundt, 2014). From another aspect, some of the customers
who give their feedbacks on
NGOs’ and corporates’ sites may not be the real customers.
Discussion
In an effort to elucidate the differences of NGOs marketing and
conventional
marketing, this paper includes the comparisons between
products strategy, price strategy,
place strategy and promotion strategy. SWOT analysis are being
used by both NGOs and
corporates when they formulate any marketing plans. The
considerations of both NGOs
and corporates are somewhat similar and different. NGOs
priorities is to have the
awareness being built among the public. Whereas, some of the
corporates prioritize on
the opportunities to increase their bottom lines. To some
extents, the opportunities for
both NGOs and corporations is the same. The advances of
technology enables NGOs and
Corporations to increase more profits or funds by organizing
campaigns online. Social
media platforms like Facebook and Twitter enable the customers

or prospects to follow
the brands and products online. The sharing function allows the
corporates to share their
new ideas or products. In addition, the followers and customers
can also share and
Economics
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1082
influence their friends or family members who have the same
interests. Furthermore, the
threat for both NGOs and corporates may be the new entries of
NGOs and corporations.
Although the word of “competition” is not suitable for NGOs
but it is true that the funds
may be lesser as the donors may shift their attentions to other
NGOs. Whereas, corporates

have their competitions within the industries. However, internal
strengths allow
corporates to have different competitive advantages. The other
comparisons are the
product strategies and the pricing strategies applied in NGOs’
and corporations’
marketing plans. NGOs do not produce products or services and
sell them to customers.
However, they sell their missions and ideas without a charge.
The donors or volunteers
contribute or join NGOs because of the missions. The mission
may be to help the poor or
the animals which are on the verge of extinction. However,
corporates will need to
produce consumer products, unsought products or specialty
products to sell to the vendors
and also the consumers. The products or services require fixed
selling prices. The
consumers may buy it because of the product designs, product
functions and brand names.
However, the consumer may also reject the offer if the price is
not equivalent to their
perceived values.

Furthermore, both NGOs and corporations have their products
to be sold at online store
or brick and mortar store. All varieties of corporations’
products or services may be found
at the same places. Marketers of NGOs and corporations use
different types of promotion
tools, medium and vehicles to promote the products. Online
campaigns were successful
because of search engines and newsfeeds (Darwell, 2013).
Customers can search their
interested fields via Google or Facebook search engines. By
using that, the search engines
enable the customers to know about the products information,
reviews from pundits and
the feedbacks from their friends or family. Whereas, NGOs and
conventional marketers
can attract the attentions of the prospects by using newsfeeds.
As Facebook will put the
hottest topics at the top of the newsfeeds, the chances of the
posts will be exposed to the
prospect donors, volunteers or customers will be higher.
Besides, the use of celebrity
endorsements are well known for NGOs and also corporates.
However, the concerns of

both NGOs and corporates are the same. NGOs and corporates
marketers may worry if
the images of celebrities will affect the brand images positioned
in consumers in negative
ways. After all of the promotion strategies, the marketers of
NGOs and corporations will
have to evaluate the effectiveness of the strategies. They use the
same measurement
metrics but the elements they use to measure will be somehow
different from each other.
In summary, the paper suggests the NGOs marketing can also be
effective as conventional
marketing.
Conclusion
This paper discussed about the comparisons of NGOs marketing
and conventional
marketing from SWOT analysis, product mix and performance
evaluation perspectives.
Both NGOs marketers and conventional marketers need to
analyze the NGOs and
corporates using SWOT analysis in order to create marketing
plans. Both NGOs and
corporates have their own strengths and weaknesses. NGOs and
corporates will need to

identify the weaknesses and take some initiatives to turn the
weaknesses into strengths.
Then, NGOs marketers and corporates marketers will need to
use the strengths to adapt
the opportunities and avoid the threats while formulating the
marketing plans. There are
more new NGOs being set up at different places in this era of
globalization. The threat of
Economics
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1083
NGOs is getting lesser funds than before. However, corporates
will not being affected
because of the new emergence of NGOs but the new corporates
from the same industry.

The corporate’ market shares or profits may be affected because
of the choices provided
by the other corporates. From the other aspect, NGOs and
corporates may have
opportunities like subsidies by government. The cost for NGOs
marketing and
conventional marketing could be decrease because of the
subsidies. However, the
government may only give subsidies to NGOs or corporates.
NGOs will need to collect
funds from the corporates, government or the public by selling
mission or ideas. However,
corporates do not collect funds. The corporates will need to sell
products or services in
order to earn profits. Hence, the marketers will need to design
different kinds of products
for NGOs and corporates. For pricing strategies, NGOs
marketers cannot set a fix price
for the missions or ideas. However, corporates will need to set
fix prices for the products
or services. Furthermore, NGOs and corporates will need to
have the place for the donors
and consumers to purchase the products. Thus, NGOs and
corporates marketers will need

to plan whether the selling centers should be in brick and mortar
form, click and mortar
form or online form. In addition, the NGOs and conventional
marketers will need to
promote the products. As NGOs have lesser budget to advertise
so the marketers will need
to choose different medium to promote. For corporates, the
budget may be less or more
so the marketers have more choices to approach the target
markets depending on the
budgets. After all, the marketers for NGOs and corporates will
need to evaluate the
marketing plans performances. NGOs marketers will need to
evaluate the performances
by comparing the funds collected before and after the
implementation of marketing plans.
However, the corporates marketers will need to evaluate by
comparing the profits earned
before and after the marketing plans.
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