Marketing Mix Decision Rules For Nonprofit Organizations

What price should a nonprofit organization charge users and how much effort should the organization devote to developing, delivering and communicating its services to users and to attracting contributions from donors? A review of current practice in these areas illustrates some of the problems that arise from currently employed decision rules. A formal structuring of the nonprofit organization’s marketing mix problem leads to the determination of optimal decision rules. In many cases, these rules suggest that a nonprofit organization should charge lower prices and devote more of its resources to marketing than a similarly situated business should. In addition, the relationship between donations and fund raising expenditures is estimated empirically for one organization.