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Health research organizations (HROs) perform a valuable service by conducting

research on the cause, diagnosis, treatment, prevention, and/or control of
disease, injury, and impairment. About 2,500 HROs operate in the United States
and are either affiliated with medical schools, research universities, private
foundations, or hospitals, or they're independently run. HROs' estimated healthrelated research spending in the United States was about $47 billion in 1997.
While government agencies and other public sources historically have been the
major providers of research funds, evidence suggests that HROs will need to rely
more heavily on private sources. This development calls for an examination of
HROs' current marketing and development or fund-raising methods.
STUDY DESIGN
To examine HROs' marketing and fund-raising methods, we randomly selected
50 CEOs and HRO directors then contacted them initially by telephone followed
by a mail survey in 1998. The organizations the respondents represented
showed considerable diversity in organizational structure and mission, size, and
the disease of interest. About 48% of the executives indicated that their HRO was
affiliated with a research university, and another 30% said their HRO was
affiliated with a medical college. In addition, 22% of the executives said their
organizations operated independently. Also, 38% of the executives identified
research as their primary mission, 18% identified research as a secondary
mission, and 44% said research was one of several missions. About 20% of the
50 sample executives said they have 10 or fewer full-time employees; 36%
reported having 11 to 25 full-time workers; 20% reported having 26 to 50 full-time
staff; 12% reported employing 51 to 100 fulltime people; and 12% said they have
more than 100 full-time people on their payrolls. When asked about total
revenues, 34% of the executives queried said their HRO generated $1 million or
less during the previous year; 44% generated between $1 million to $5 million;
14% from $5 million to $25 million; and 8% generated more than $25 million.
The sample HROs researched such diseases or injuries as: heart disease;
cancer; AIDS/HIV infections; mental health; drug abuse; birth defects; brain and
spinal cord injuries; Alzheimer's and genetic defects; diabetes; community health;
toxicology; immunology; dental, oral, and facial disorders; ophthalmic and
optometric diseases; scleroderma; pulmonary diseases; cystic fibrosis;
hypertension; vascular diseases; eye, ear, nose, and throat diseases; nervous
system or sensory disorders; and pediatric diseases.
Using data the top administrator of each HRO provided, these questions were
addressed:

* To what extent is each of a number of marketing/development strategies, which

were provided to them, emphasized, and what is their perceived effectiveness
related to various market targets and product/service offerings?
* To what extent are various marketing/development tactics, which were provided
to them, emphasized, and what is their perceived effectiveness of various media,
motives, and information management methods in this regard?
* What is the relationship between the definition of marketing, whether narrow or
broad, as espoused by the HRO and the availability of resources, to accomplish
its mission?
STUDY RESULTS
Strategic Issues
Exhibit 1 presents the executives' ratings (low, moderate, or high) on the
emphasis and effectiveness of marketing/development activities encompassing
five market targets and six offerings. We computed an index by dividing the
effectiveness rating by the emphasis rating. The executives indicated a high level
of emphasis on recruiting board members and making presentations to
foundations. This emphasis is justified by the executives' high-perceived
effectiveness ratings for each of these strategies. The respondents gave
alliances with other nonprofit organizations and the recruitment of volunteers
moderate emphasis and moderate effectiveness ratings. The executives gave the
lowest emphasis and lowest effectiveness rating to programs targeted to alumni
and patients.
Among the offerings, newsletters and public relations campaigns received high
ratings on both emphasis and effectiveness. The respondents gave special
events and appreciation dinners moderate emphasis and moderate effectiveness
ratings. The high emphasis placed on the development of annual reports was
accompanied by only moderate effectiveness ratings, while facility tours received
only moderate emphasis, but high effectiveness ratings.
In reviewing market targets and offerings together, the respondents indicated the
greatest apparent benefit was derived from recruiting board members, making
presentations to foundations, and developing newsletters. More emphasis on
facility tours was indicated, seeing as the tours were perceived as highly
effective. The moderate effectiveness the respondents gave to alliances with
other nonprofits, volunteer recruitment, special events, and appreciation dinners
justified continuing their emphasis. Unless extenuating circumstances exist, less
emphasis seems warranted for the development of annual reports. The low
effectiveness of programs aimed at alumni and patients might be the result of
their being given only a moderate emphasis. Because these two targets are likely

to have some familiarity with the economics and potential benefits related to
health care research, a high priority for both groups was indicated.
Interestingly, three of the strategic variables to which the executives gave the
highest effectiveness ratingsrecruiting board members, making presentations to
foundations, and facility tours-are primarily personal selling activities. Therefore,
HRO executives should take care to implement consumeroriented selling
strategies and tactics, including thorough prospecting of targets before
approaching them; well-designed presentations geared toward the targets'
unique characteristics; use of closing techniques to gain commitment for support
of the HRO; and follow-up after gaining initial commitment to build an enduring
relationship.
The other offering variable that the respondents rated highly effective is public
relations campaigns. Executives should consider either in-house training by a
public relations expert or hiring an external public relations consultant. Press
releases, news conferences, and radio or television interviews with HRO
personnel, as well as those who benefit from their research programs, all were
considered viable methods for making the general public more aware of the
existence and worth of a HRO's mission and its prior accomplishments.
Tactical Issues
Exhibit 2 presents the HRO executives' ratings of the emphasis and
effectiveness, as well as the performance-related index of
marketing/development tactics including five media alternatives, three
donorrelated motives, and three information management methods. Personal
appeals and information provided by Web sites were emphasized and
considered highly effective. Direct mail, although receiving moderate emphasis,
had a low level of perceived effectiveness. Telephone appeals and mass media
advertising, on the other hand, received little emphasis and had low perceived
effectiveness.

Respondents gave moderate emphasis and moderate effectiveness to other

tactics, such as profiling patients as research beneficiaries, appealing for naming
rights, or appealing to honor research personnel. When the performance index
was considered, however, appeals for naming rights fared the best. Appeals that
either profile patients as the beneficiaries of the research or honor research
personnel were next in effectiveness.
The respondents gave database development a high degree emphasis, but
considered it only moderately effective. However, relationship marketing, which
would seemingly rely on a database, received moderate emphasis and was
considered moderately effective. HRO executives gave marketing research a low
degree of emphasis, but rated it as moderately effective. It also has the highest
performance index of all the tactical variables.

Many of the tactics rated highly by the HRO executives are related, suggesting
they should be considered as complementary parts to their overall marketing
strategy. HRO executives also could benefit from integrating these tactics when
possible to improve their marketing efficiency and effectiveness. For example,
HRO Web sites should be interactive and engaging, rather than functioning
simply as electronic brochures. Having Web site visitors log into a "guest book" is
a good way to help build a database of potential donors and volunteers, enabling
the HRO to engage in database marketing and information dissemination
simultaneously. The Web site also might be a valuable marketing research
medium, as consumer surveys could be posted on the site and responses
automatically deposited into a data file for analysis.
MARKETING DEFINITION AND RESOURCES
As part of the survey, the HRO executives were asked to define "marketing" as
practiced in their organizations. As indicated in Exhibit 3, 54% of the 50
executives defined marketing narrowly, focusing on development or fundraising.
In contrast, 46% of the respondents defined marketing more broadly, expanding
beyond fundraising to include public education; patient recruiting; research
contracts with industry; and the development and marketing of related products
or services.
The majority of the respondents62%-indicated that their HRO had inadequate
resources with which to accomplish their missions in their most recent complete
fiscal year, while 38% indicated that their HRO's resources were adequate.
Among the 27 CEOs with a narrow definition of marketing, 26% reported their
HRO had adequate resources to accomplish their organizational missions.
Among the 23 respondents who defined marketing broadly, 12, or 52%, indicated
that their resources were adequate. The relationship between the operative
marketing definition used and the adequacy of mission-related resources is
statistically significant at a 94% level of confidence (p=.057), based on the results
of a chi-square test. This result is not surprising, because if HRO executives view
their resources as inadequate, their main opinion of marketing is likely to be
based on fund-raising and development activities that hopefully will relieve the
inadequacy. But a broadened view of marketing ultimately might increase
resource availability in the long run.
IMPLICATIONS
This study suggests that many HRO executives could benefit from additional
training in personal selling, given the importance of board member recruitment,
presentations to foundations, and facility tours. Tactically, targeted activities are
more effective than those that aren't targeted. Also, the study results documented
the importance of marketing research and having a good flow of marketing
information into the organization. Clearly, the World Wide Web is a very
promising medium for both disseminating information about the HRO and

gathering information from interested parties. At the same time, certain tactics,
such as telephone appeals and mass media advertising, are not particularly
effective.

The study also reveals a relationship between resource adequacy and HRO
executives' views of marketing. A narrow view of marketing was associated
statistically with inadequate marketing resources . HRO executives reporting
adequate resource availability were more likely to maintain a broadened view of
marketing. *