Planning for Sustainability: Developing and Marketing Products
Learn why you might want to develop and market products, what products to offer, how and when to market them, and what infrastructure is needed for a sales operation.
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WHY -- AND WHY NOT -- WOULD YOU DEVELOP AND MARKET PRODUCTS?
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WHEN WOULD YOU CONSIDER DEVELOPING AND MARKETING PRODUCTS?
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HOW DO YOU DEVELOP PRODUCTS TO SELL?
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HOW DO YOU MARKET YOUR PRODUCT?
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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?
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