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Chapter 02: Literature Review
Literature Review, The demand for increasing funds for non-profit along with increasing competition can produce limitations that can divert the organisations from their original purpose. Therefore, being self-sustainable is essentially for non-profits to not only survive but to also fulfil their mission (Luo, and Bhattacharya, 2006). Therefore, M25 also introduced products in the market that will help in earning money needed to fulfil organisations mission.
However, M25 is not a first charity organisation to earn revenue through selling commercial goods, in past other organisations have attempted at earning revenue through selling commercial goods. According to Robinson, (2002) “Medieval churches made money by selling ales brewed in the church house and renting out vestments to other churches for funerals and festivals”. Therefore, non-profits have been attempting to earn revenue and generate money through sales for as long as they have existed in whatever different forms they exist. According to a report published by Bjarnason, Cheng, Fielden, Lemaitre, Levy, and Varghese, (2009), the “fee income is now the fastest growing source of revenue for non-profits in the United States and the United Kingdom”.
Non- profits earn to become sustainable through different mediums, ranging from arranging performance and earning money through ticket sales, to selling consumer goods. Another example of non-profit selling product for earning money is Magazine, Mother Jones which is published by the non-profit foundation for National Progress) and they rely on to earn money from the subscription fee. Moreover, according to Anderson, and Markides, (2007), around 15% of non-profits in the United States sell consumer goods that account for less than 5% of their income.
Another more famous and extremely successful example of non-profit earning money through sales of consumer goods is when Girl Scout Volunteers sold an estimated 250 million boxes of cookies, and it was used for personal and professional development of the girls.
Several non-profits throughout the world, especially in the United States and the United Kingdom, have become self-sustainable with the help of sales of commercial goods, or services that can help them earn finances for funding their costs. Some organisations charge a percent of the costs of their fee to survive, some organise events and raise money through tickets, and some plan a long-term solution to financing shortages and introduce products and services that will earn money, for example, magazine subscriptions. Similarly, M25’s goal is to introduce Rough to Smooth skin care products, to specific target market-Hotels and earn revenue for their non-profit.
This will help the organisation in resolving issues of funding shortage and also help them deliver their message to consumers who will purchase the products. Since M25 is introducing skincare products, which is already a competitive market, following paragraph will present a short analysis of UK hotel market and how successful M25s product can be in the market in comparison to the already existing products (Bhattacharya, 2005).
Although consumers today are more knowledgeable than the past and prefer already tested products especially when it comes to skin care, research shows that employment of fair-trade market can help succeed products more easily especially within the consumer market in the United Kingdom.
According to a research published by Crittenden, and Crittenden, (2008), consumers are more likely to spend on the products that are related to environment protection or a social cause. Therefore, since Rough to smooth is related to a social cause it will be easy to promote rough to smooth products in the market. However, a success of a product cannot be dependent only on the cause behind promotion of the product, marketing strategy and product customization according to the needs and taste of consumers is essential for a successful launch and sales of any product. For example “Wrigley chewing gum in China: the company has captured 40 percent of a fast-growing category already worth $2 billion. Its tactics include regular launches of products tailored to Chinese consumers, such as gum flavoured with herbal essences and grapefruit; intensive consumer education to emphasize chewing gum’s health benefits; and building a presence in the millions of small outlets where Chinese consumers typically shop”.
Although Wrigley and chewing gum are products from a completely different market, but the idea is that production, innovation and marketing according to customers’ needs is the key to success of a company and a brand. An example of a related product can be of well-known brand Dove, Dove’s mission is “Dove is committed to helping all women realize their personal beauty potential by creating products that deliver real care. Dove believes that beauty should be for everyone, because when you look and feel your best, you feel better about yourself.” Thus, stating a clear mission and showing consumer that they come first and foremost is the consumer, and Dove did that by introducing products in World War II that deal with skin damages, and later designing other products built specifically for consumers’ needs.
Therefore, Rough for Smooth success also depends greatly on how it is produced, whether or not it fulfils consumer needs and how it is marketed in the target industry.
Marketing is affected by all environmental factors including social, economic, demographic, and technological. In marketing process, companies send their message and product to customers through direct and indirect messages in the face of competitors. For this reason, the strategic leaders should assess the micro as well as macro environment during the creation and incorporation of marketing strategies.
Other than that, it is also important to observe the psychological changes of customers with respect to the buying decision patterns. The main reason behind the assessment of customers’ black-box is to fulfil the changing and diversified demands and requirements of the customers (Eze, and Lee, C2012).
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