The importance of stakeholders and marketing in social entrepreneurship

Theme: Promoting of social entrepreneurship 

 

Title: The importance of stakeholders and marketing in social entrepreneurship

 

Developed by: CARDET, Cyprus

 

Based on: Denny, S. (2013) 'They planted trees instead' - Why social enterprises need to be better at marketing

 

Durkin, C., Gunn, R., 2014. Chapter 5 - Stakeholder participation and involvement in social enterprises. In: Gunn, R., Durkin, C., Social Entrepreneurship - A Skills Approach. Bristol, UK: Policy Press, pp. 31-44.

 

Freeman, R.E., 2001. A stakeholder theory of the modern corporation. Perspectives in Business Ethics Sie, 3, p.144.

 

MarketingMix., 2018. The Marketing Mix 4Ps and 7 Ps explained.

 

Shaw, E. (2004). Marketing in the social enterprise context: is it entrepreneurial? Qualitative Market Research: An International Journal, 7(3), pp. 194-205.

 

Aim: 

  • to understand the importance of stakeholders in social entrepreneurship.
  • to understand the importance of marketing in social entrepreneurship.

 

 

The level of language knowledge: Level B2.

 

Description: 1. Identifying the stakeholders

 

"Stakeholders are those groups who have a stake in or claim the organisation” (Freeman, 2001 p.102). More specifically, they are the ones who are affected directly or indirectly by the operation of a social enterprise. Identifying the key stakeholders of a social enterprise is considered to be essential as they play an important role when planning everyday processes and when developing a marketing strategy (Durkin and Gunn, 2014). Currently, there are a number of stakeholders' analysis models which can help social entrepreneurs to identify their stakeholders and evaluate their importance. Multiple stakeholders are sometimes difficult to manage as they may have competing demands. More specifically, while a for-profit enterprise has a single bottom line, that of “profit maximisation”, a social enterprise might have multiple ones (e.g. “Triple Bottom Line” - Economic, Environmental, Social). These multiple bottom lines create more stakeholders and make their management extremely complex.

 

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The potential stakeholders of a social enterprise

 

2. The importance of marketing for social enterprises

 

“Social enterprises have a more complex marketing job than private sector businesses. Not only do they have to  market their products and services, but they need to market their social value and impact. No large private sector business is going to buy social value and impact from a social enterprise that is not professional about its marketing. If you want to deliver more impact, if you want to help the corporates with a CSR problem, get serious about your social marketing – otherwise they’ll plant trees instead!" (Denny, 2013). Traditionally, the marketing mix consisted of four main elements (the four Ps) Product, Place, Price and Promotion. However, this traditional mix is very much focused on businesses that have a 'product' to sell. So, in the 1980s, three additional Ps were added to take into account those businesses who offer services (such as training or healthcare). These additional Ps are Process, Physical Environment and People. When crafting its marketing strategy a social enterprise must take into consideration all the seven Ps in a way that serves both its social and entrepreneurial nature (MarketingMix, 2018).

 

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The Marketing Mix

 

3. Comparison of Marketing Strategies

 

The table below showcases the different marketing strategies occurring between different entrepreneurial themes amongst for profit enterprises and social enterprises (Shaw, 2004). As seen from the table, both for profit enterprises and social enterprises share a lot of marketing strategies due to their entrepreneurial nature. However, it is evident that social enterprises try to combine profit and social goals.

 

Entrepreneurial Marketing Theme For Profit Context Social Enterprise Context
Opportunity Recognition Occurs when an unmet consumer need/market demand is identified as profitable. Can be characterised by but is not restricted to local and niche markets. Occurs when an unmet, social need such as homelessness or lack of provision of child- care services is identified, whether profitable or not. Often restricted to satisfying social needs which emerge locally.
Entrepreneurial Effort Provide and encourage a common vision, determination and leadership to drive the enterprise towards meeting an unmet consumer need/market demand, despite scarcity of resources. Provide and encourage a common vision, determination and leadership to drive the social initiative towards meeting social needs, despite scarcity of resources and extent of exclusion encountered.
Entrepreneurial Organisational Culture Create initiatives which are “open” to suggestions and “creative” in the way they meet organisational and profit objectives. Create initiatives which are “open” to suggestions and “creative” in the way they address unmet social needs, whether profitable or not.
Networks and Networking Use local networks to identify unmet consumer needs/market demands and use contacts to provide direct and indirect access to the resources required to profitably meet these needs. Use local networks to identify unmet social needs and to use contacts to provide direct and indirect access to the resources required to meet these needs and to build credibility locally.

 

 

Learning outcomes: Completing this activity, participants will be able to:

  • Understand the importance of stakeholders.
  • Understand what to consider when developing a marketing strategy.

 

Expected duration: About 15-20 minutes.

 

Task(s): Read the following statements and mark them True or False.

 

 

Go to the task >>

 

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