1. Situation Analysis
As the costs of decades of environmental negligence are now clearer than ever, the support for fundamental reforms has passed its critical mass. This state of affairs has been brought about as a direct effect of decades of efforts made by environmental organizations, many of those efforts can be related to these organisations’ ability to recruit financial resources and to allocate them skilfully between its various operations.
However, despite the noticeable success throughout the past, the new global awareness takes its toll on the bodies who nurtured it. In an age of greater sensitivity to the WWF’s core objectives, companies, governments and numerous other NGOs challenge the WWF efforts to retain its relevance and to justify its ongoing and future operations.
As its main source of income is donations, the WWF must not only rethink its goals and objectives, but also to adjust its fundraising operations to the fast-changing market.
1. 1 Main Customer Segments
WWF’s three main donors’ groups, namely governmental organisations, corporations and individuals, can be further segmented into specific groups using more than a few segmentation methods. This section, however, will suggest personality analysis; by considering personality traits (as well as the sets of needs and wants derived from them) as the leading factor, it may be possible to identify several segments, which may prove themselves as highly potential when treated in a suitable manner.
1.1.1 The Government Sector
Revenues from government and other public sector bodies account for 29% of WWF’s total income in FY2008 (WWF, 2009). The sources of motivation for this expenditure may vary, but it is clear that the WWF enjoys its position a sound and responsible actor in the global level. It should be noted that the responsible image of WWF is a major strengths of the organisation; for example, Greenpeace, who deals with similar issues to those of the WWF, is perceived as rather “subversive” and thus does not report any donations from the public sector (Greenpeace, 2008).
However, this very own approach towards governments and international institutions require adaption of the organisation’s operations to some extent, as direct conflicts with such bodies (e.g. in the form of unfavourable reports) may diminish this primary source of income. Moreover, since governments are much more interested in environmental issues than before, they may shift their expenditure to their own wildlife protection programs and/or to local organizations.
Hence, the WWF should strive to use its professional strengthens to nurture local and international public sector initiations. That is, these bodies should be convinced that the WWF can be an effective and efficient means to promote their own plans and to actively participate in policy making. Given that the WWF can succeed in extending its role to public institutions, it should be assumed that governments and aid agencies will retain their predominant role in the WWF’s donations pie.
1.1.2 The Business Sector
The WWF’s (2008) income statements from the last two years show two opposite trends: on one hand, donations from corporations have declined by 25% between the two years, presumably due to the crisis-related drop in profitability. On the other hand, revenues from royalties have increased by 110% to about €765,000, more than four times higher than the traditional income from legacies and bequests.
These figures clearly imply a wind of change in the market potential of corporate donations. In addition to the weakening economic environment, companies prefer to maximize their benefits from corporate social responsibility (CSR) operations, and prefer to make direct investments rather than to donate almost anonymously (i.e. most of the companies’ stakeholders are not aware of the donation). Combining the opposite trends of donations and royalties, the WWF should use its strong brand name and highly positive public image to engage in business initiatives, as discussed in detail in the next chapter.
As funding from more than a few sources is shrinking or growing slowly, private individuals continue to increase their donations and prove once more the power of the individual in an open economy. More precisely, in addition to a 22% increase in individual contributions between 2007 and 2008 (WWF, 2008), Black (2009) reports a single $50 million donation from a Mexican billionaire, who wish to establish a fund to promote environmental projects in his country. Even if this is an unrepresentative example, one should not avoid considering specific cases and general trends in regard to individuals.
The WWF has more than a few market offerings for individuals, including merchandizing, travel packages and educational seminars. In addition, individuals are a target market for the WWF’s core operations in matters such as nutrition, responsible tourism and reduction of the demand for products such as furs and ivory.
1.2 Market Analysis
1.2.1 Partnerships with Governments, NGOs and Humanitarian Agencies
Governments are not only a leading financer of the WWF, but are also a collaborator and a target for many of its operations. In the US, the WWF’s Government and Policy operations aim to develop cooperation programs with President Obama’s administration, the US Congress and governmental agencies (such as the Agency for International Development and the Department of state) and promotes public-private partnerships (PPPs) with numerous international bodies.
Moreover, the WWF takes an active role in various campaigns in cooperation with other NGOs. These include, among others, humanitarian responses to catastrophes with the Red Cross and a proposal to Copenhagen Climate Treaty in collaboration with a battery of other environmental organizations such as Greenpeace, Friends of the Earth and IndyAct.
1.2.2 Collaborations with the Private Sector
As more and more businesses and corporations become aware of their environmental responsibility and the merits of maintaining a sustainable way of conduct, the WWF’s professional capabilities are effective means to promote tailor-made solutions, in particular with international behemoth such as Coca-Cola, Nike and IKEA. The same holds true for several major financial institutions, which understand the prospective long-term resource scarcity and invest in environmentally responsible R&D projects. Most importantly, both of these directions do not merely come from plain CSR, but are a result of the clear link between sustainability, profitability and long-term growth. Such partnerships involve, among others, issues like transformational projects (i.e. building sustainable capacities towards ISO 14000), Philanthropic contribution, and Marketing ventures (which also serve as sources for royalties for the WWF).
1.2.3 Recent Trends and Events that Affect the WWF
As mentioned earlier, the current political, economical and social conditions pose both threats and opportunities for the WWF. Among all major developments, several are worth to mention as the most critical for the success of future marketing efforts:
- Pace of recovery from the economic downturn in developed countries: a crucial factor for the WWF’s revenues is the ability in all levels and sectors to spend of the organization’s operations, from governments’ budgets to individuals’ propensity to buy WWF-related consumer goods.
- A new set of priorities of the Obama administration: unlike his predecessor, who refused to sign the Kyoto treaty and did not admit the American responsibility for nature preservation, President Obama seems to be more supportive of environmental considerations. This can be seen, to state a pair of examples, through the promotion of the Clean Energy and Security Act in the Congress and the president’s intentions to establish the US as a global leader in the fight to prevent the climate change.
- Greater openness among Third World governments: foreign regimes have gained a great deal of their high growth rates in the past on weak environmental legislation and enforcement. Recently, however, major forces such as China, who positioned itself as the world’s “omission trashcan,” cooperate with the WWF and many other bodies to protect their natural resources. As a result, it should be assumed that those countries will show great improvement in this field and will need further support.
The WWF belongs to the top line of international environmental NGOs. Some of the organizations in this group have a deep degree of affiliation with major international bodies; these include, for example, the Center for Environment and Development for the Arab Region and Europe (which belongs to the United Nations Development Programme, or UNDP) and the International Society for Environmental Epidemiology, a part of the WHO (World Health Organization). Other NGOs, who can be perceived as direct competitors to the WWF on donations, are to be found in the independent category. Table 1summarizes findings on the major members of this category, in comparison to the WWF.
|Organization||Contributing Members||Revenues in $,000 US (FY 2007)||Geographical reach||Basea|
|World Wildlife Fund (WWF)||5 million||151,426||100 countries||Switzerland|
|Greenpeace International||2.8 million||69,977||41 countries||The Netherlands|
|Friends of the Earth||2 million||Not reported||16 affiliates and 77 member groups worldwide||
Table 1: Selected independent international environmental NGOs
(Adapted from the respective organizations’ websites)
aall the organizations in table have dozens of local offices.
As can be seen in the table above the WWF has a clear predominant position comparing to its main competitors in all performance measurements. This is due to several differences, as described below and in Figure 1:
First, the WWF is concerned primarily with preservation of flora and Fiona, and usually does not deal with more controversial issues such as globalization, nuclear energy and human rights. In contrast, the other major organizations take a more holistic approach, involving economic and social matters in their environmental campaigns. As a result, they are perceived as more radical and receive narrower support.
Second, the WWF cooperate with more governmental and private bodies than the competitors. This approach brings about more awareness to the WWF’s messages and direct donations from a wide range of bodies, even such parties with whom the WWF has disputes. Greenpeace, for example, refuses to accept donations from corporations, in order to avoid bias on the organization’s policies and actions. Consequently, Greenpeace and other competitors in this category receive less favorable attitude and significantly lower donations, even though their environmental agenda is rather similar to the WWF’s core activities.
Third, the professional capabilities of the WWF and its powerful brand (the panda symbol) allow it to offer more diversified product portfolio relatively to the others. Unique examples from the WWF’s offering include ISO 14000 transformation services, “green” financial consulting and the availability of much better academic and practical innovation projects.
On the other hand, some smaller competitors such as Friends of the Earth and Green Cross International are structured in a much more decentralized manner. That is, their operational approach is based on connecting activist groups in one network, whereas the international headquarters provide services to those groups, whose goals and means differ according to regional factors. This structure keeps most of the expenditure and the income on the regional level, thus reducing overhead expenses to minimum and allows operational flexibility, which better match expenditure to income.
2. Proposed Marketing Mix
Based on our market analysis, it can be soundly assume that given the difficult situation in which the WWF conducts its fundraising operations, the current situation of the organization is relatively stable in the short run. However, as the world economic and political conditions are going through rapid changes, the WWF should consider several adaptations in its fundraising policies and operations.
The underlying idea behind this program is that the WWF is doing rather well despite, not because, its position as an environmental “charity” fund. That is, as donations diminish because of economic reasons and the attempts of potential donors, governmental and private alike, to promote their own environmental initiatives, the WWF manage to maintain its predominant position only thanks to the organization’s ability to find alternative sources of income.
Hence, as described in detail below, the main objective of this program is to nurture an organizational attitude, which will be supportive towards market-oriented innovation in all aspects of the marketing mix. This idea follows the assumption that the WWF has the right set of means to provide great value to a large array of stakeholders in other means than showing its success in environmental campaigns. We will further argue that although the plan requires some changes within the WWF, it can be safely assumed that the basic structure and capabilities of the organization will not be damaged.
Our market analysis described three customer segments as the WWF’s key stakeholders, namely the public sector, businesses and individuals. It was also suggested that former sources of motivation to donate money to the WWF are diminishing gradually but surely, either because of economic reasons (i.e. lower profitability) or as a result of political and social changes (e.g. the rising power of local activists’ groups). One thing that did not change, and even increased, is the awareness to the WWF’s environmental agenda and a growing will to act.
In response to these trends in the market, the WWF should strengthen its position as a provider of products and services to the main target market. By doing it profitably, the organization will flourish financially and will be less dependent on donations.
2.1.1 Services for the Public Sector
Governments, international organizations and inter government organizations (IGOs) are concerned with sustainability in the macro level. Typical matters are issues of legislation and reinforcement, nature protection, waste management and water. As opposed to the lobbying approach, we argue that those organizations need much more than public pressure to act. Instead, the WWF can offer feasible solutions to promote the public organizations’ inherent motivation to act. Such services may include:
- Assistance in developing environment protection legislation
- Project management and financial structuring of “big-ticket” project such as alternative energy and water desalination facilities
- Marketing and PR agency in behalf of the government/IGO
- Educational projects for all ages
2.1.2 Services for the Business Sector
Companies and corporation are characteristically the most profit- and growth-derived players in the economy. Even CSR initiatives are measured in terms of cost effectiveness and compared to their benefits on a financial or public image perspective. Furthermore, profitability is a critical factor in donation decision-making, as donations are deductibles from other taxed items in the Profit and Loss Accounts. However, similarly to governments, there is a growing demand in the private sector for services, which can be delivered through a substantial expansion of the WWF’s networks in the business community. Private sector operations should include:
- Expansion of the current operations (e.g. ISO 14000 consulting, resource management of large multinationals)
- Joint ventures with financial bodies to establish WWF’s “branded” line of eco-friendly financial products (such as trust funds and insurance policies for sustainable operations)
- Outsourcing services for tasks in the WWF’s core competencies such as omission management and HR training
- Establishing a “think tank” with logistics companies to improve their efficiency.
2.1.3 Products and Services for Individuals
The main value proposition for the individual market is twofold. First, by supporting the WWF efforts, people can perceive themselves as “greener” and get a sense of belonging to an elite social group. Second, the WWF’s unique knowledge and abilities may enable the organization to offer valuable products and services in fields such as tourism, education and science. The main recommendations as for (average income) individuals are:
- Extending the current line of WWF consumer goods (which focus today mainly on logo-bearing products, see Figure 2) to other FMCG (e.g. vegetarian food products) as well as to be able to offer better prices on environmentally-friendly home products such as water-saving filters for taps.
- Continue to develop tourism packages for all kinds of travelers, from those who look for exotic spots to Sunday morning families.
- The WWF should consider establishing a non-formal education system, which will provide private classes in fields such as science and biology.
The proposed line of the WWF’s products and services assumes that the marketing offerings must be profitable, as the organization does not have the means to invest in slow-yielding projects. Moreover, the WWF has a good reputation as a leading wildlife protection organization and has a strong brand.
Therefore, the organization should ensure its margins. It is not likely that there will be a serious price competition on the public sector, but the pricing policy in regard to the private sector should be modular to some extent. That is, the WWF should tailor its prices to the available financing instruments in the market and to base some of its prices to corporate services on performance-based commissions, which may reduce price sensitivity. Agreements with marketers of the WWF’s FMCG line should be based on profit sharing with a minimum annual payment.
Whereas the products and services sold to the open public can be marketed in a conventional way (e.g. through intermidiaries, retailers and the Internet), the marketing for the institutional market (i.e. both the public sector and companies) should be based on direct marketing through trained marketing and sales units for every sector and/or region (customer-based structure). Special attention should be put to those regions where improved environmental standards are a threshold for further development or for achieving strategic goals. Examples include, among others:
- Countries that need to develop their environmental legislation and enforcement I order to join international cooperation bodies (e.g. the European Union and the Kyoto Treaty)
- Companies in countries that give substantial benefits or pose penalties for omission reduction (e.g. the CO Tax and high waste clearing costs)
- Third World countries, which are currently legging behind of the rest of the world in the wildlife and nature protection policies and operations
As the institutional market is expected to retain its predominant position in the WWF’s income pie, most promotional efforts should be devoted to governments and companies. Following Kotler & Keller (2006), the most effective promotion method in the context of B2B marketing is direct interactions with specific people within the organizations and building long-term relationships, which are based on trust.
Hence, the task forces should locate change agents in their target institutions and give them the notion that they are valuable members of an elite group of individuals across markets and industries, all interested in bringing about environmental reforms in their organizations.
The industry and government partners will be invited to specially designated congresses and excursions and will get direct connections with potential collaborators from both the private and the public sector. In addition, the WWF will provide personal consulting services for those people, who will be able to get advice on every field. The WWF will monitor the effectiveness of each such partner to promote cooperation between the WWF and his organization; this will significantly ease the process of monitoring the cost-effectiveness of the proposed marketing mix.
3. Budgets and Controls
As mentioned earlier, it is imperative to avoid a risk of significant loss and not to worsen the WWF’s current 2.5% ratio between fundraising expanse and revenues. The needed funds for developing the proposed market offerings should come primarily from the fund raising budgets and partially by shifting existing operations to synergize with the new marketing approach.
The appraisal system should treat each region separately and to recognize the different projects within each region as a strategic SBU that must justify itself financially.
In addition to each SBU’s revenues from operations, the main KPIs are profitability, stability of market portfolio and growth rates of income against the benchmark. The main benchmarking criteria should compare the efficiency of the new plan against the former fundraising methods and a comparison between similar SBUs from other regions.
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Friedman, T. L. (2005). The World is Flat: A Brief History of the Twenty-first Century. New York: Farrar Straus & Giroux.
Greenpeace International. (2008). Annual Report 07. Retrieved June 28, 2009 from <http://www.greenpeace.org/raw/content/international/press/reports/gpi-annual-report-2007.pdf>
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