»PHILIP KOTLER is S.C. Johnson DistinguishedProfessor of International Marketing atNorthwestern’s Kellogg School of Management.Hailed as the “foremost expert on the strategicpractice of marketing,” he is author ofMarketing Management, the field’s definitivetextbook (now in its 12th Edition) and 34other books. He and Nancy Lee wrote SocialMarketing and Corporate Social Responsibility.He has consulted with several major companiesand has received eleven honorary degrees.

»NANCY LEE has more than 25 years of practicalmarketing experience in the public and privatesectors. An adjunct faculty member at the University of Washington and SeattleUniversity, she teaches Marketing in thePublic Sector, Social Marketing, andMarketing for Nonprofit Organizations. Lee isa frequent speaker at conferences, seminars,and workshops for public sector managersand administrators. This is the third book shehas coauthored with Philip Kotler.

» Use time-tested marketing principles toincrease citizen participation, compliance,and support

» Leverage proven “4Ps” marketing tactics:optimize product, price, place, and promotion

» Segment your markets, reach your clientswhere they are—and satisfy them

» Influence positive behavior: 12 social marketing principles that work

Marketing in the Public Sector is a ground-breaking book written exclusively for governmental agencies. It offers dozens ofmarketing success stories from agencies ofall types—from around the world—so thatyou can make a difference in your organization.World-renowned marketing expert Dr. PhilipKotler and social marketing consultantNancy Lee show that marketing is far morethan communications and has at its core acitizen-oriented mindset. You’ll becomefamiliar with the marketing toolbox andcome to understand how these tools can beused to engender citizen support for youragency, increase utilization of your productsand services, influence positive publicbehaviors—even increase revenues anddecrease operating costs. This book offersno-nonsense roadmaps on how to create astrong brand identity, gather citizen input,and evaluate your efforts. It presents a step-by-step model for developing a marketingplan, pulling the lessons of the entire booktogether into one, high-impact action plan.Simply put, this book empowers you tobuild the “high-tech, high-touch” agency ofthe future—and deliver more value for everypenny you spend.

Founded in 1881 as the nation’s first collegiate businessschool, Wharton is dedicated to creating the highest valueand impact on the theory and practice of business andmanagement worldwide.

$34.99 U.S./$43.99 Canada

MARKETING

“Professionally, as an academic turned politician, this book—if published a few years earlier—would have made my lifemuch simpler. This book lays out, in detail with concreteexamples, how to conduct a grand plan for change.Particularly impressive is the application of different marketingprinciples along each step of the transition process towardestablishing an efficient service-oriented governmentalagency.”

“This book is filled with insights for people who want to communicate effectively about government programs, but itshould also be on the bookshelf of any government managerwho needs to think creatively about how to improve customer service. Every page contains information and ideasthat public-sector leaders can, and should, put in their management tool kits.”

”Increasingly, public sector managers have been challenged to‘do more with less.’ Marketing in the Public Sector demonstratesthat marketing is not simply another line-item expense, butrather a set of tools that help public servants allocateresources more effectively and efficiently. The book is chock-full of real-world stories of creative marketers working withindiverse organizations, all of whom have come to understandthat marketing is not simply advertising or persuasion, butrather a mindset.”

“Kotler and Lee are teaching governments to motivate byinvitation rather than intimidation. Instead of complaintand reaction, they work to create a culture of contagiouscooperation that can replace rulemaking with social consensus.This is a practical manual for un-clogging hearing rooms,cooling tempers, and putting government back on the sideof the people who pay for it.”

“Marketing in the Public Sector provides an excellentplanning framework for public sector officers engaged in alllevels of marketing and communications. Showcasing real-world examples, it successfully demonstrates the marriage ofcommercial marketing concepts into public sector practice.”

www.whartonsp.comAn imprint of Pearson Education

Cover design: Alan Clements

About theAUTHORS

SOMKID JATUSRIPITAK, PH.D.

Deputy Prime Minister and Minister of Commerce,Royal Thai Government

CHRISTINE O. GREGOIRE,

Governor, Washington State

E. MARLA FELCHER, PH.D.

Adjunct Lecturer in Public Policy,John F. Kennedy School ofGovernment, Harvard University

DR. K VIJAYA

Director, Corporate Marketing& Communications, HealthPromotion Board, Singapore

DAVE ROSS

CBS News Commentator

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Praise for Marketing in the Public Sector

“Professionally, as an academic turned politician, this book—if published a few

years earlier—would have made my life much simpler. This book lays out, in

detail with concrete examples, how to conduct a grand plan for change. Particu-

larly impressive is the application of different marketing principles along each

step of the transition process toward establishing an efficient service-oriented

governmental agency.”

Somkid Jatusripitak, Ph.D., Deputy Prime Minister

and Minister of Commerce, Royal Thai Government

“This book is filled with insights for people who want to communicate effectively

about government programs, but it should also be on the bookshelf of any govern-

ment manager who needs to think creatively about how to improve customer

service. Every page contains information and ideas that public-sector leaders can,

and should, put in their management tool kits.”

Christine O. Gregoire, Governor, Washington State

“Increasingly, public sector managers have been challenged to ‘do more with

less.’ Marketing in the Public Sector demonstrates that marketing is not simply

another line-item expense, but rather a set of tools that help public servants allo-

cate resources more effectively and efficiently. The book is chock-full of real-

world stories of creative marketers working within diverse organizations, all of

whom have come to understand that marketing is not simply advertising or per-

suasion, but rather a mindset.”

E. Marla Felcher, Ph.D., Adjunct Lecturer in Public Policy,

John F. Kennedy School of Government, Harvard University

“Kotler and Lee are teaching governments to motivate by invitation rather than

intimidation. Instead of complaint and reaction, they work to create a culture of

contagious cooperation that can replace rulemaking with social consensus. This is

a practical manual for un-clogging hearing rooms, cooling tempers, and putting

government back on the side of the people who pay for it.”

Dave Ross, CBS News Commentator

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“Marketing in the Public Sector provides an excellent planning framework for

public sector officers engaged in all levels of marketing and communications.

Showcasing real-world examples, it successfully demonstrates the marriage of

commercial marketing concepts into public sector practice.”

Dr. K Vijaya, Director, Corporate Marketing & Communications,

Health Promotion Board, Singapore

“Public sector organizations are now faced with an urgent need to stand out from

the crowd in order to successfully compete for funding, talent, and influence.

Philip Kotler and Nancy Lee have written a unique, practical, and timely book

containing comprehensive guidelines and cases that those involved in the market-

ing of public sector organizations will find absorbing and most useful.”

Paul Temporal, Group Managing Director, Temporal Brand

Consulting, Author of Public Sector Branding in Asia

“Every day, professionals in the public sector deliver thousands of programs and

services in increasingly demanding environments. This book is a ‘must read’ and a

standard reference for every public servant engaged in public sector marketing

and communications. Congratulations to Kotler and Lee for creating a book that

is both educational and practical.”

Jim Mintz, Director, Centre of Excellence for Public Sector Marketing

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Marketing in thePublic Sector

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Marketing in thePublic Sector

A Roadmap for Improved Performance

Philip KotlerNancy Lee

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Vice President, Editor-in-Chief: Tim MooreWharton Editor: Yoram (Jerry) WindAcquisitions Editor: Paula Sinnott Editorial Assistant: Susie AbrahamDevelopment Editor: Russ HallAssociate Editor-in-Chief and Director of Marketing: Amy NeidlingerCover Designer: Alan ClementsManaging Editor: Gina KanouseSenior Project Editor: Lori LyonsCopy Editor: Ben LawsonIndexer: Erika MillenCompositor: codeMantraProofreader: Linda SeifertManufacturing Buyer: Dan Uhrig

© 2007 by Pearson Education, Inc.Publishing as Wharton School PublishingUpper Saddle River, New Jersey 07458

Wharton School Publishing offers excellent discounts on this book when ordered in quantityfor bulk purchases or special sales. For more information, please contact U.S. Corporate andGovernment Sales, 1-800-382-3419, corpsales@pearsontechgroup.com. For sales outside theU.S., please contact International Sales at international@pearsoned.com.

Company and product names mentioned herein are the trademarks or registered trademarksof their respective owners.

All rights reserved. No part of this book may be reproduced, in any form or by any means,without permission in writing from the publisher.

Printed in the United States of America

First Printing, October 2006

ISBN 0-13-187515-9

Pearson Education LTD.Pearson Education Australia PTY, Limited.Pearson Education Singapore, Pte. Ltd.Pearson Education North Asia, Ltd.Pearson Education Canada, Ltd.Pearson Educatión de Mexico, S.A. de C.V.Pearson Education—JapanPearson Education Malaysia, Pte. Ltd.

Library of Congress Cataloging-in-Publication DataKotler, Philip.Marketing in the public sector : a roadmap for improved performance / Philip Kotler, Nancy Lee.

p. cm.Includes bibliographical references and index.ISBN 0-13-187515-9 (hardback : alk. paper) 1. Government productivity.

2. Public administration—Citizen participation.3. Administrative agencies—Management. I. Lee, Nancy, 1945- II. Title. JF1525.P67K68 2006352.7'48—dc22 2006015053

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We dedicate this book to every current and futurepublic servant engaged in the pursuit of the commongood—good for government, good for citizens, and

good for the environment. Our intention is for you todiscover the contribution that traditional marketing

principles and techniques can make to improvingyour agency’s performance. Our hope is you

experience that the real magic of marketing is (simply) a citizen-oriented approach.

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CONTENTS

Acknowledgments xv

Part I Introduction 1

Chapter 1 Improving Public Sector Performance by Seizing Opportunities to Meet Citizen Needs 3

What Do Citizens Want and Get from PublicAgencies? 6What Tools Currently Used in the Private Sector Can Most Benefit the Public Sector? 7What Role Can Marketing Play in Improvingthe Performance of Public Agencies? 10Going Forward 11

Chapter 2 Understanding the Marketing Mindset 15

Opening Story: The United States Postal Service—A Work in Progress 17The Marketing Mindset 24Moving from Here 38

Part II Applying Marketing Tools to the Public Sector 39

Chapter 3 Developing and Enhancing PopularPrograms and Services 41

Opening Story: School Meal Revolution inthe United Kingdom 42Product: The First “P” 46Summary 63

ix

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Chapter 4 Setting Motivating Prices, Incentives, andDisincentives 65

Opening Story: Click It or Ticket 66Price: The Second “P” 69Summary 85

Chapter 5 Optimizing Distribution Channels 87Opening Story: HIV/AIDS in Nepal—Saritais Empowered to Buy Condoms When andWhere She Needs Them 88Place: The Third “P” 92Summary 105

Chapter 6 Creating and Maintaining a DesiredBrand Identity 107

Opening Story: ENERGY STAR®—A BrandPositioned to Help Protect the Planet 108Branding in the Public Sector 113Summary 131

Chapter 7 Communicating Effectively with KeyPublics 133

Opening Story: Increasing Organ Donation 134Promotion: The Fourth “P” 138Developing Messages 139Choosing Messengers 146Selecting Communication Channels 149Summary 161

Chapter 8 Improving Customer Service andSatisfaction 163

Opening Story: Phoenix Fire Department—“A Peace Corps with a Tank of Water” 165Customer Service in the Public Sector 169Benefits of Improved Customer Satisfaction 170

x CONTENTS

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MARKETING IN THE PUBLIC SECTOR xi

Practices to Support Customer Satisfaction 174Summary 183

Chapter 9 Influencing Positive Public Behaviors:Social Marketing 187

Opening Story: From “Fat to Fit” in Finland 188Social Marketing in the Public Sector 191Principle #1: Take Advantage of Prior andExisting Successful Campaigns 193Principle #2: Start with Target Markets MostReady for Action 195Principle #3: Promote Single, Simple, DoableBehaviors—One at a Time 196Principle #4: Identify and Remove Barriersto Behavior Change 197Principle #5: Bring Real Benefits into the Present 199Principle #6: Highlight Costs of CompetingBehaviors 201Principle #7: Promote a Tangible Object orService to Help Target Audiences Performthe Behavior 202Principle #8: Consider Nonmonetary Incentives in the Form of Recognition and Appreciation 203Principle #9: Have a Little Fun with Messages 205Principle #10: Use Media Channels at thePoint of Decision Making 206Principle #11: Get Commitments and Pledges 207Principle #12: Use Prompts for Sustainability 209Applications Upstream 211Summary 212

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Chapter 10 Forming Strategic Partnerships 215Opening Story: Improving Jordan’s WaterProblems—For the People, By the People,Through Partnerships 216Benefits of Strategic Partnerships 220Partnerships with the Private Sector 222Partnerships with the Nonprofit Sector 230Partnerships between Governmental Agencies 236Difficulties and Risks in Partnerships 237A Marketing Approach to Winning GreatPartners and Reducing Risks 238Summary 242

Part III Managing the Marketing Process 243

Chapter 11 Gathering Citizen Data, Input, andFeedback 245

Opening Story: Building a Healthy Nationthrough Research in South Africa 246Marketing Research in the Public Sector 249Research Defined by When It Is Conducted 250Research Defined by Source of Information 251Research Defined by Technique 253Steps in the Research Process 255A Word about Low-Cost Research 259Summary 260

Chapter 12 Monitoring and Evaluating Performance 261

Opening Story: An Environmental BehaviorIndex—Helping to Quantify What Happenedand Decide What to Do Next 262Measuring Marketing Performance 265Why Are You Conducting This Measurementand for Whom? 267

xii CONTENTS

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What Are You Measuring? 268How Will You Measure? 272When Will You Measure? 273How Much Will It Cost? 274Summary 274

Chapter 13 Developing a Compelling Marketing Plan 277

Opening Story: New York City MarketingStarts Spreading the News 278Marketing Planning in the Public Sector 281Marketing Objectives and Goals 284Target Audience 285Positioning 286Marketing Mix 286Evaluation Plan 288Budget 289Implementation Plan 289Summary 290

References 291

About the Authors 309

Index 311

MARKETING IN THE PUBLIC SECTOR xiii

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xv

ACKNOWLEDGMENTS

My thanks go to my wife Nancy for her unfailing support of my workand to the other members of my family; to my Kellogg School ofManagement colleagues who are always a source of inspiration; andto the city of Chicago, which has taught me much about the role ofgovernment in making a city work and prosper.

—Philip Kotler

Thank you to all the committed and competent public servants inWashington State who inspire me and others with what happenswhen we practice the marketing mindset. And a special thank you tomy dear husband Terry, who continues to carry my bags, put up thetent, chase off the wolves, put out the fire, and remind me to look atthe stars.

—Nancy Lee

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