Executive Summary
It is notable from the Red Cross case study that the willingness of members of the public to donate blood to the nonprofit organisation depends on marketing planning of the organisation. This marketing plan will provide understanding on how Red Cross can launch a new service to attract more members of the public to give blood to the organisation. The suggested new service to be offered by the organisation is healthcare insurance cover for blood donors for five years from the time they donate blood. In this case, the organisation will pay medication and healthcare service fees for everyone who donates blood for five years from the time they give blood.
This marketing plan will cover various areas of marketing planning. First, it will give an introduction that will explain the overall profile of Red Cross. This will lead to the establishment of the company’s capabilities to meet the needs of its customers. The plan will also provide a situational analysis that will include an application of SWOT and PESTLE to the organisation. Barriers to marketing planning and their possible solutions will also be highlighted in the plan. This paper will also provide objectives of the plan, including the description of the new service. A strategic and tactical approach will also be provided. This will include the new service development process and description of the elements of marketing mix. Ethical issues and their impact on the plan will also be covered.
Marketing planning is essential for strategic planning. It is one of the many elements that make up the overall operation of the organisation. Therefore, marketing planning should be connected with the overall strategic purpose of the organisation. Marketing planning enables an organisation to develop some means of analysis and thinking regarding strategic problems facing the organisation. It also supports the long-term view of strategy and coordinates with other business-level strategies to promote the overall strategies of the organisation. However, the implementation of marketing planning may be affected by several factors including: inadequate funds, geographical barriers and poor infrastructure, lack of skills by the marketing team and competition offered by rival firms.
- Introduction
The purpose of this marketing plan is to establish the development and marketing of a new service in Red Cross – health insurance cover. It will use SWOT analysis to determine the internal capabilities and weaknesses of the organisation in relation to the new service. It will also identify barriers to marketing planning and the solutions to overcome such barriers. The marketing planning is also intended to provide the objectives of developing the new service. In this section, the plan will introduce the service and explain how its objectives. The marketing plan will explain how the marketing strategy and tactics can be pursued using the marketing mix elements. The plan is also used to provide budgets for the development of the new service so that the new service will operate within the budget and minimize costs.
Red Cross is a non-governmental organisation operating in almost all countries of the world. The organisation offers compassionate care to people in need. It has a network of generous volunteers, donors and employees who support the mission of the organisation which is to prevent and relieve suffering across the world. This mission is achieved through five key service areas: disaster relief, lifesaving blood, supporting military families, health and safety services, and safety services. This marketing plan focuses on one of the five key service areas – lifesaving blood. The organisation has a blood program which is focused at collecting blood donations from millions of donors worldwide and supplying those blood to people in need of them.
- Situation Analysis
In order to understand the needs of the organisation in relation to the blood donation program and the new health insurance service, it is important to study the external and internal factors that affect the company. SWOT and PESTLE are some of the situational analysis tools that can be used to achieve this. SWOT represents Strengths, Weaknesses, Opportunities and Threats while PESTLE represents Political, Economic, Social, Technological, Legal and Environmental factors.
- SWOT Analysis
| Helpful
|
Harmful | |
| Internal | Strengths
· A strong network of generous donors, employees and volunteers · Location across the world (access to a large market) · Good market knowledge (knowledge of blood donors and their needs) · Innovation through digital operations |
Weaknesses
· Unable to meet the demand of blood · Over-dependence on donors and volunteers |
| External | Opportunities
· Expanding markets · Good marketing strategy through the Blood Program · Good support by governments in most countries |
Threats
· Occurrences of disasters such as Hurricanes and Tornadoes · Poor infrastructure in developing countries |
In terms of strengths, the company has a good network of donors and volunteers to donate and collect blood across the world. In 2012, approximately 3.5 million people donated about 6 million units of blood in USA. Innovation has also enabled the company to provide the best mechanisms of reaching more donors and collecting blood more effectively. The company has digital operations that enable it to reach donors through the social media. One of the opportunities is expanding markets which are seen through increased population, especially in emerging markets such as India and China. Increased population indicates that blood donors will also increase, also demand may also rise.
The weakness Red Cross is that it is unable to meet the daily needs of blood. It is able to collect only 6,000 units per day, yet 17,000 units are needed in order to keep up demand. Another weakness is that the organisation depends solely on donations and volunteers. People often change depending on their moods and availability of resources. If volunteers and donors stop giving their contributions to Red Cross, the organisation will perform poorly. The organisation is also threatened by the occurrences of disasters such as Tornadoes and Hurricanes. When such disasters occur, Red Cross will step in to save lives. This means that a lot of resources will be used as a result of such disasters. The second threat is poor infrastructure in developing countries. This causes inability to access areas affected by disasters. Therefore, it is difficult for Red Cross to save lives in such areas.
- PESTLE analysis
Political/legal Factors
The success of Red Cross in receiving blood donations depends on both legislative and political structures, government stability, taxation policies and relationships with foreign governments. Most countries in which Red Cross operates have legislations that support donations and non-governmental organisations like Red Cross. Red Cross also receives government support from foreign countries. For instance, US government supported Red Cross in 2011 when Hurricane hit North Carolina by providing shelter and supplies for people affected by the Hurricane. Government stability in most countries where Red Cross operates has also allowed the company to save lives. Furthermore, political classes in most countries also encourage people to donate blood to the Red Cross. Red Cross can take advantage of the favourable political and legislative structures to do an intensive campaign for blood donations and the new healthcare insurance service.
Economic Factors
Energy costs and living standards of potential donors are the main economic factors that affect the blood donation program and the new health insurance plan of Red Cross. Red Cross depends on energy for various live-saving activities including first aids, settling people affected by disasters, transporting materials, preserving blood units, and other activities. Energy costs are higher in developing countries, making it difficult for the company to achieve its mission in such countries. GNP in some countries is higher than others. A strong economy with good economic performance and high purchasing power is associated with high standards of living. Blood donors will be more willing to donate blood if their purchasing power is high. In countries where people’s standards of living are low, the health insurance cover will attract blood donors.
Social Factors
Red Cross mainly depends on donations, and different communities have different attitudes and beliefs regarding donations. Some communities believe in charity more than others. Western Countries are individualistic, and are therefore less likely to donate blood compared to third world countries. Demographic factors also affect blood donation program. In USA, Red Cross targeted the youth who are willing to donate blood in colleges and university campuses. In fact, the company has developed a program called College Assistance Migrant Program (CAMP) in order to reach a greater number of young supporters to donate blood (American Red Cross, 2012). In terms of attitude, some communities believe that blood transfusion may lead to transmission of HIV. Therefore, they may be reluctant to donate blood thinking that they may be infected by the diseases.
Technological factors
Red Cross is also influenced by technological change and investment on research and development. Red Cross has many experts in Research and Development including Richard Benjamin who is the Chief Medical Officer in Blood and Biomedical services in Red Cross. Through Research and Development, Red Cross addresses donor and patient safety issues related to blood collection and transfusion (American Red Cross, 2012). Benjamin conducts clinical research in transfusion medicine. This helps the organisation to identify the best ways to address the issues affecting donors and patients. The research can even be more relevant in the new health insurance service. Red Cross is also changing its technology through innovation regularly in order to meet the needs of patients and donors. For example, the organisation uses social media and other internet marketing tools to reach more donors.
Environmental Factors
The blood transfusion program is also affected by the environmental factors such as climate and disease break outs. If a disease hits a certain area, the people may be unwilling to donate blood in fear of contracting such diseases. Furthermore, blood donation requires certain climatic conditions to be met in order to guarantee the safety of donors. Availability of incentives such as free food and abundant resources is also an influential environmental factor.
- Barriers to Marketing Planning
One of the barriers to marketing planning is cultural barrier; including reluctance by the management to accept or embrace change, planning and marketing. The culture of an organisation entails the way things are done in the organisation. The way things are done may not be changed by an organisation because that involves taking a risk. Most organisations are not willing to change due to uncertainties. For instance, adopting a health insurance cover for blood donors may seem to be a risky venture because there is no guarantee that the donors will be more willing to donate when they are given health insurance as an incentive. The organisation may fail if it does not plan well over the short term and medium term or market the new health insurance service effectively. The blood donation program may also fail if the organisation fails to make changes in response to the changing trends and circumstances within the global market.
The second barrier to marketing planning is behavioral lack of support by the management. This barrier is composed of two elements: lack of support from the top management and lack of cross functional involvement. The top management should always provide support for all marketing planning, otherwise all parts of the organisation may not work together to achieve the mission and vision. The marketing plan cannot also work effectively for the benefit of the organisation if the various functional units of the organisation are not involved in the marketing planning.
Marketing panning may also be affected by cognitive barriers – lack of knowledge and skills. Marketing planning requires good knowledge and skills in order to be successful. Some of the skills needed for implementation of the new health insurance service in Red Cross include: ability to collect relevant data about the donors and their insurance needs, ability to make good conclusions about present and future performances of the organisation, ability to be imaginative enough in order to think of future options, and ability to think critically and creatively in order to select the best strategic options. Without sufficient knowledge and skills, it is difficult to plan well for the organisational marketing and overall operations.
Inappropriate systems and lack of data is also another barrier to the marketing planning (Blythe, 2009). Without suitably designed systems or procedures within the organisation, marketing planning will not be successful. This is because lack of appropriate systems and procedures makes it difficult to collect relevant data, monitor progress, and identify responsibilities for each member of the marketing planning team. Simple and clear systems and procedures should be there within the organisation to ensure that each functional unit understands its roles and responsibilities in the marketing planning process.
The last barrier to effective marketing planning is lack of resources. Without money, time or people, the organisation may not accomplish its marketing planning objectives. There should be enough time for the management to collect information, analyse it and discuss (Kotler, 2011). The people available to implement the marketing planning process should also have the right knowledge and skills. Money should also be available for the organisation to purchase marketing information and support other marketing related activities.
There are various solutions to overcome the above barriers to marketing planning. McDonald identified the above five barriers to marketing planning, and suggested an approach to overcome those barriers. This approach is referred to as the Ten S framework and is indicated by the figure below. The Ten S framework is also used by an organisation to gain competitive advantage in the market.
Fig 1: McDonald’s Ten S Framework (McDonald, 2006)
Cognitive barriers to marketing planning can be solved by element 7 in the figure above. This element contains skills and knowledge that organisations need to use to overcome cognitive barriers. Barriers related to systems and procedures can be overcome by elements 8, 9 and 10. Element 8 requires organisations to systematize the process in order to make data available and the system appropriate for effective marketing planning. Cultural barriers to marketing planning can be overcome by using element 3 of the Ten S framework. Element 3 requires the organisation to use shared values about marketing. This creates a belief in planning in the organisation. Behavioural barriers to marketing planning can be overcome using element 1 – strategy. Strategy can be used by the top management before tactics. This requires support of management for all marketing planning activities of the organisation. Finally, resource barriers to marketing planning can be solved by elements 2 and 4; situating marketing within operations and structuring around markets. This will enhance effective utilization of resources within the organisation.
- Objectives
This marketing plan is designed for the new service of Red Cross aimed at increasing blood donations to the organisation. The new service is to provide health insurance cover/plan for each blood donor for a period of five years after donating blood. This will encourage people to donate blood because people often worry about their health after donating blood. Although Red Cross keeps informing potential donors that donating blood does not cause health problems, donors often hesitate to donate due to cultural beliefs and fear for diseases. The company can therefore attract more donors by promising to pay for their healthcare services in hospitals if they fall sick within a period of five years after donating blood. This system works because there is a possibility that most of the donors will not fall sick within five years after donating blood, yet more donors will start donating blood. Furthermore, donors will want to extend their free insurance cover after five years elapse, so they may come back again to donate blood. Therefore, the service will be advantageous for the organisation. However, the health insurance service will cover specific health problems and conditions listed in table 1. The service will be available in the major private and public hospitals in all countries where the organisation operates. The main objectives of the new service are indicated below:
- To save lives every day – this is has been one of the major missions of the company for over 75 years. By collecting more blood from donors, Red Cross will save more lives.
- To increase the current daily units of blood. Currently, The Company collects about 6 million units of blood annually in USA. This should be increased to 6.5 million units of blood in order to keep up with demand which is approximated to be over 17,000 units per day.
- To increase the number of donors – in order to increase the units of blood, the number of donors should be increased.
- Strategy and Tactics
The new product development process covers the techniques for new product development and the major marketing mix elements. These can be summarized in the table diagram below:
| Marketing mix element | New product development techniques |
| Price | · Techniques relating to price are not of much significance because Red Cross is not for-profit organisation.
· However, is important to consider pricing in order to attract donors while at the same time minimizing costs. · The price is given in terms of zero-premium · The pricing model to be used is price making in which the company can manipulate prices in order to suit market changes. · The health insurance cover is free for five years after blood donation, and the period can be extended if the donor donates more blood. · Red Cross will use monetary donations and its other sources of money to pay for the healthcare services of its blood donors |
| Product | · The service is free health insurance cover for a period of five years after each donation
· This is a unique product with good value for blood donors · The health insurance will cover the following services Ø Ambulatory services Ø Hospitalization, e.g. surgery Ø Rehabilitative services Ø Emergency services Ø Pediatric services · The service will be protected through licensing and patents · Highly innovative technology can be used to keep records of insured donors and to keep track of their health progress. |
| Place (distribution) | · Distribution channels is essential for the success of the new service
· The distribution channel is selling through healthcare agents and third party healthcare distributors and healthcare facilities. · Direct sales representatives will also be used to sell the services to potential blood donors. |
| Promotion | · Third parties including healthcare facilities will help the company to promote its new service · Advertisements though social media and print and broadcasting media in order to reach more potential blood donors. · The company’s direct sales representatives will also promote the new services through public relations. |
Table 1: the marketing mix and new product development techniques
- Ethical issues that might affect the plan
Ethics with regards to marketing refers to the perception of whether particular marketing decisions are right or wrong (Dibb and Simkin, 2008). Management roles play a crucial part in ethical issues facing an organisation. Ethics is a key consideration of Red Cross because it offers humanitarian services without seeking profits. Ethical issues are viewed differently in different countries. However, Red Cross uses universal ethical standards across all countries.
One of the ethical issues that may emerge in the course of implementing the new health insurance service is ethical trade-off. This entails taking advantage of other nations in order to benefit the organisation (Brennan, 2008). For instance, the organisation may not implement the service in countries where blood donations are sufficient. Even for such countries, the health insurance cover is necessary in order to enhance fairness and equity across all locations of the organisation. Another class of ethical issues is product issues to do with undisclosed risks. For example, the organisation should be genuine and disclose the fact that the insurance cover will last for only five years and will cover specific diseases. If a woman asks if maternity services can be covered by the insurance service, the company should say the truth and provide a list of diseases and conditions that can be covered.
The company should also consider consumer ethics such as false claims. For instance, a blood donor may make claims for the health insurance cover using faked documents. The organisation should use appropriate property rights such as logos and trademarks that are not easy to imitate in order to overcome such blood donor deceptions.
Budgets
| Month | Average number of blood units per day (predicted unit sales) | Main Costs (insurance cover for blood donors in $) |
| March 2014 | 16,100 | 2,000 |
| April 2014 | 16,200 | 2,500 |
| May 2014 | 16,300 | 3,000 |
| June 2014 | 16,400 | 3,500 |
| July 2014 | 16,500 | 4,000 |
| August 2014 | 16,600 | 4,500 |
| September 2014 | 16,700 | 5,000 |
| October 2014 | 16,800 | 5,500 |
| November 2014 | 16,900 | 6,000 |
| December 2014 | 17,000 | 6,500 |
| January 2015 | 17,100 | 7,000 |
| February 2015 | 17,200 | 7,500 |
| Monthly Total | 199,800 | 57,000 |
- Implementation
Implementation of the new project involves four stages that enhance a good implementation strategy. These stages are shown by the chart below.
The implementation strategy starts with development of objectives that need to be accomplished by the project. The objectives include: to save lives, increase number of blood units donated, and increase number of blood donors. The next step is to develop strategies for the new product development. The strategies include development of zero-premium for the health insurance cover, direct sales marketing and internet marketing (especially through social media). The execution part is the most essential stage of the implementation strategy. It entails persuading the third party agents and distributors to sell the health insurance cover of the organisation to potential blood donors. It is also the stage in which blood donors with health insurance cover with the Red Cross are registered and blood collected. All functional units will participate in this stage. Finally, the implementation strategy will involve monitoring and evaluation. The plans will be compared with the outcome and specific changes will be initiated to correct things that have not worked according to plan. Communication across all functional units will be important in this stage.
References list
American Red Cross (2013). What we do. Accessed January 29, 2014 from http://www.redcross.org/what-we-do.
Blythe, J. (2009). Principles of Marketing. Hampshire: Cengage Learning
Brennan, R. (2008). Contemporary Strategic Marketing, 2nd Edition. Basingstoke, Palgrave
Dibb, S. and Simkin, L. (2008). Marketing Planning. Hampshire: Cengage Learning
Hackley, C. (2010). Advertising and Promotion: An Integrated Marketing Communications Approach. London: Sage
Hollensen, S. (2010). Marketing Management: A Relationship Approach. London: Prentice Hall
Jobber, D. (2010). Principles and Practices of Marketing, 6ed. London: McGraw Hill.
Kotler, P. (2011). Principles of Marketing. London: Prentice Hall.
McDonald, M. (2006). Strategic Marketing Planning: Theory and Practice. The Marketing Review, 4, 375-41.
RDI ( 2011). Marketing Planning. [Online] Available at http://www.rdi.co.uk/ Accessed November 12, 2012.
