Contents A brief Introduction of the Organization & How it Works............................................... 2 Akhuwat & Process Perspective of Services Marketing: (People Processing, Possession Processing, Mental Stimulus Processing or Information Processing?):........................................3 7 P’s of Services & Akhuwat Foundation..............4 The Three Stage Model of Service Consumption........7 Pre-Purchase Stage:.............................................. 7 Service Encounter Stage:.........................................8 Post Encounter Stage:............................................ 9 The Flower of Service............................... 9 Facilitating Supplementary Services of AKHUWAT (Non Profitable Organization):................................................... 9 Enhancing Supplementary Services of AKHUWAT:....................11 Distribution of Services...........................13 What is Distributed? :..........................................14 How is it Distributed? :........................................15 The Marketing Communications Mix for Akhuwat foundation......................................... 16 Current Position:............................................... 17 Recommendations:................................................ 18 A Final Word on Akhuwat’s Marketing Communication Mix & How to Better Utilize it:.............................................. 22 The Process (Service Process)......................22 Final Word......................................... 26 1
Analysis of Akhuwat Foundation's Service Offerings
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ContentsA brief Introduction of the Organization & How it Works...................................2
Akhuwat & Process Perspective of Services Marketing: (People Processing, Possession Processing, Mental Stimulus Processing or Information Processing?):................................................................3
7 P’s of Services & Akhuwat Foundation.............................................................4
The Three Stage Model of Service Consumption................................................7Pre-Purchase Stage:...........................................................................................................................7
Service Encounter Stage:...................................................................................................................8
Post Encounter Stage:........................................................................................................................9
The Flower of Service..........................................................................................9Facilitating Supplementary Services of AKHUWAT (Non Profitable Organization):...........................9
Enhancing Supplementary Services of AKHUWAT:..........................................................................11
Distribution of Services.....................................................................................13What is Distributed? :......................................................................................................................14
How is it Distributed? :....................................................................................................................15
The Marketing Communications Mix for Akhuwat foundation.........................16Current Position:..............................................................................................................................17
A Final Word on Akhuwat’s Marketing Communication Mix & How to Better Utilize it:.................22
The Process (Service Process)............................................................................22
Final Word.........................................................................................................26
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A brief Introduction of the Organization & How it Works
The idea of Akhuwat Foundation was unearthed for the very first time during a dinner
time conversation between friends from civil services. Akhuwat started with group
lending and today it has progressed onto individual lending while the main customer
of this being the household units. Akhuwat is actually a unique microfinance system
that works on interest free basis and the funds received back are recycled. Loans
are provided to under-banked borrowers for a number of reasons including up
gradation of residential facilities, marriages, education and at times, to pay back
loan-sharks. However throughout this, Akhuwat's has always mainly emphasized on
enterprise or business loans. The reason for this emphasis is a belief that such loans
have a huge effect on the society's socioeconomic development; working as a tool
these loans empower poverty-ridden households to move up the socio-economic
ladder and to improve their living standards. These enterprise or business loans
currently cover more than 90 % of Akhuwat Foundation's current outstanding
portfolio.
While the organisation depends mainly on volunteers to run day to day activities, an
ideal social enterprise like Akhuwat employs a healthy and balanced mixture of both
volunteerism and reparation. The top and the middle management staff is more or
less entirely composed of volunteers whereas only the junior staff - who come from
the same communities as most of the borrowers - are paid market compensations.
Akhuwat differs from a classic MFI on nearly every account, but the biggest
difference is in its philosophies. While any other microfinance institute is built
principally as a 'business' that 'sells', Akhuwat’s philosophy hinges on answering the
obtrusive illogicality that exists within the microfinance framework, where the truly
marginalised in the society - and in effect those who actually deserve financial
access the most - are ostracised and restricted by the unbearably high interest rates
that accompanies these loans.
While a regular MFI encourages their clients to climb up the loan ladder to borrow in
turn larger sums, Akhuwat attempts to help its borrowers become better off so that
they could graduate on to regular banks as soon as they have outgrown Akhuwat's
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scale of lending, thus Akhuwat's job is to process clients and in due course pass
them on to conventional banking thus overlooking the benefit of holding them for
their own recurring profits.
In the last 10 years, Akhuwat Foundation has managed to open 169 branches in 116
cities and small towns (mainly low income localities), with ever increasing focus on
the smaller towns and cities of Punjab, Khyber Pakhtunkhuwa and Sindh. The total
amount of struggling households that have been helped back to their feet during this
time is more than 0.3 million, while the total amount of credit expenditure as of today
stands at around PKR 4.5 billion. The Akhuwat Foundation's outstanding loan
portfolio is approximately PKR 1.5 billion while the recovery rate is at an exceptional
99.8 percent.
The organisation's organic, 'back to the basics' approach towards management
allows it to have the lowest operational cost in the sector. Office furniture is kept to a
bare least and all top-management activities are carried out while seated on the
floor. Additionally the Akhuwat foundation's operations are increasingly becoming
self-sufficient, with the MDP (Member donor programme) currently financing more
than 60 percent of all operating costs.
Akhuwat Foundation’s mission is
“To alleviate poverty by empowering socially and economically marginalized families
through interest free microfinance and by harnessing entrepreneurial potential,
capacity building and social guidance.”
Akhuwat & Process Perspective of Services Marketing: (People Processing, Possession Processing, Mental Stimulus Processing or Information Processing?):
When we talk about services we often encounter situation where we are to define
and address the question that what is being processed in this whole scenario. In any
services offering people, physical objects, and data can be processed and the nature
of the processing can be tangible or intangible. In people processing oriented
services people often sought out services that are directed at themselves and thus
they are required to enter the service process themselves in order to receive the
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required services. In possession processing the customers are interested in
processing of their possessions and thus transformation of these possessions into
desired forms. In case of mental stimulus processing services are normally directed
at people’s minds thus enhancing their understanding and their knowledge. Finally
information processing just like mental stimulus processing enables a person to
make better decisions based on the information provided by the requested services.
It is due to this similarity between mental stimulus processing and information
processing that they are often combined and are termed as information based
processing.
When we consider Akhuwat Foundation and when we talk about the type of
processing that takes place in this situation we might face conflicting viewpoints as
some might term it as people processing while others might have totally a different
perspective in this regard. As per our understanding the microfinance and loan
services offered by Akhuwat Foundation are mainly people processing as they are
aimed at helping low income households and help these low income households in
transforming their lives and thus changing their economic position. However a thin
line cannot be drawn in case of the services offered by Akhuwat Foundation as at
some stages information based processing is usually also involved. Typically when
the loan process starts a people processing is initiated and subsequently other
processing also gets initiated with the continuation of the process. However as
mentioned earlier that the aim of Akhuwat’s services is to enhance the living
standards of low income generating members of the community and thus to
transform their lives so that they are better able to work independently and to
improve their earning. It is due to this mantra of Akhuwat Foundation that we are of
the view that the services offered by Akhuwat Foundation mainly cover the people
processing aspect as mentioned in the process perspective of services.
7 P’s of Services & Akhuwat Foundation
In case of services we extend our traditional 4P’s of marketing mix to add 3 more P’s
and thus we term it as 7P’s of services marketing. These are product, price, place,
promotion, process, physical environment and people. A brief introduction of the 7
P’s of services offered by Akhuwat Foundation is provided below:
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1. Product: Akhuwat provides loan services to households at zero percent
interest rate. It is evidently the only microfinance institute that is successfully
working as a non-profit organization. The microfinance products offered by
Akhuwat Foundation comprise of family enterprise loan, liberation loan,
education loan, health loan, emergency loan, housing loan and marriage loan.
In addition to these loan services Akhuwat also works in various other projects
but considering the main focus of Akhuwat on enterprise and business loans
we will focus our attention to this specific loan services throughout this project.
However it is appropriate to mention here that most of the loan services
provided by Akhuwat follow the same process and procedures with very few
adjustments. The family enterprise or business loans are sanctioned for
establishing or expanding a business that can help low income households in
ensuring and securing a sustainable livelihood. These loans normally range
from Rs. 10,000 to 30,000.
2. Place & Time: Akhuwat Foundation has presence in almost 207 cities and
towns of Pakistan with almost 302 branches. These setups are established in
localities with low income households that might be in need of loans offered
by Akhuwat Foundation. The organization mostly uses the mosques or
churches for carrying out its activities with the motive of using these religious
establishments for social improvement. Introductory sessions are organized to
create awareness about the services offered by Akhuwat Foundation and
once an individual shows interest in borrowing money from Akhuwat, it
normally takes 3 months before a decision is reached regarding sanctioning of
requested loans.
3. Price: The major attractiveness of the loan services offered by Akhuwat
Foundation is that it offers loans to low income households at zero percent
interest rate and that too without any requirement of collateral. The only
amount that is charged from an applicant is of Rs. 100 that is charged as the
application fee from the applicant. No other amount is to be paid by the
applicant against his loan or his application for loan.
4. Promotion: Akhuwat mainly relies on positive word of mouth promotion made
by its previous borrowers. It organizes various introductory sessions in
mosques or churches of different low income localities and creates awareness
regarding the loan services offered by the organization. In these sessions
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mainly previous borrowers are invited to share their experiences with the local
community. For donations Akhuwat relies mainly on its presence over the
internet and also organizes various events to stay connected with its regular
donors.
5. Process: The loan disbursement process is initiated with the submission of
an application by the prospective borrower. Once an application is received, it
is evaluated and a decision is reached with an approval or rejection of the
request. The details of the complete process have been presented in the last
part of the report. The whole process involves an active participation of the
applicant or the borrower and he is required to remain in continuous touch
with the organization.
6. Physical Environment: As also mentioned earlier that Akhuwat mainly uses
local area mosques or churches for carrying out its activities and this means
that the physical surrounding of the service area is kept simple. Even the
offices of Akhuwat are quite simple and those who visit Akhuwat Offices have
to sit on the floor along with the organization’s representatives. The purpose
of keeping the ambience simple is to keep any unnecessary costs at a
minimum level.
7. People: The staff that is mainly involved in directly dealing with the
prospective borrowers is mainly from the same locality. This is done to ensure
that the individual that visits Akhuwat’s office for loan purposes feels at ease
and is able to interact openly with the person in order to remove an doubts
that he might have regarding the loan services offered by Akhuwat. On the
other hand, the main office staff and the top management of Akhuwat is well
reputed and is respected by all and thus adds to the fairness of the whole
system.
Now we will cover various aspects of the loan services offered by Akhuwat
Foundation while focusing only on the major content that we have studied in
services marketing course and is applicable on the loan services offered by
Akhuwat Foundation.
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The Three Stage Model of Service Consumption
Pre-Purchase Stage:
Need Awareness: The need in people for getting micro loans from
organizations arises due to the suffering people face because of different
circumstances, such as poor living conditions, inability to fulfill basic
necessities and also due to non-availability of resources needed to run a
business even at smaller levels so they could keep their lives going. In this
case need for Akhuwat’s services arises due to financial constraints and
resource limitations faced by low income households. The provision of
Interest-Free loan and that too without any collateral required from Akhuwat is
the reason why low income households seem more interested in availing
Akhuwat’s services because people hesitate in taking loans from the
companies and banks who charge interests on their loans. This hesitation
also arises due to the non Shariah compliance of these loans because they
are based on interest which is prohibited in Islam as well as because of the
high interest rates and other hidden terms and conditions which people think
might create serious problems for them in future.
Information Search: After the arousal of this need in people, they look for the
solutions that can satisfy their need and then they search for the organizations
which provide loans (micro as well as macro loans). Other alternatives will
also come into loan seeker’s mind such as borrowing money from their friends
and family or from some person on some interest rate. These alternatives are
then evaluated before a final choice is made.
Evaluating Alternatives: This service covers experience attributes as it does
not have any tangible characteristics, so the attributes cannot be evaluated
before experiencing it such as the reliability of the service and ease of getting
the loan from the company.
When evaluating such loan service it often includes the perceived risk for the
borrower in case if he is taking the loan on some rate of interest from some
organization or from number of alternatives such as the over and above
amount (interest) on the principal amount and also the risk that the person
might face difficulty in returning the loan at the specified interest rate and
might have its collateral on stake. At this stage it is easy for the person to go
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out and select the organization which is giving loan without any interest and is
Shariah compliant and Akhuwat is the organization which fulfills these aspects
as it includes very minimal risk as there is as such no collateral on stake and
the lender demands zero interest on the loan so the person makes a
purchase decision of the service.
Service Encounter Stage:
Purchase Decision: Akhuwat generally fulfils all the aspects of person’s perceived
or desired service by providing interest free loans and that too on easy long term
instalments without the requirement of pledging any collateral from the person who is
willing to take loan from Akhuwat. So the person makes a final purchase decision of
getting a loan from Akhuwat as it is without any doubt the best solution to his
financial needs (especially for low-income households).
After the purchase decision or finalizing the alternative from which to get this service,
the person now gets in contact with the service provider and in this case the person
goes to its respective area branch of Akhuwat in order to apply for the loan (service).
The person gets in direct interaction with the employee of the service provider and
the person is required to fill the application form which is basically designed to gather
the important information. The application for loan is then further processed through
different channels such as background check of the applicant etc. in order to find out
whether the applicant is eligible to receive the loan or not. The whole process from
applying for the loan to the payment of loan to the eligible applicant involves many
steps by the company and involves a longer time frame.
High Contact Service: The service which Akhuwat is providing is a high contact
service because the customer exposure to the service provider involves a longer
time frame and steps and takes on a physical and tangible nature as the customer
visits the Akhuwat office in order to apply for the loan and gets in direct interaction
with the employee and tells the employee his/her reason of applying for loan and
when the Akhuwat gives the loan after going through a process they give that loan to
the borrower in a loan disbursement ceremony and when the borrower submits his
instalment of loan , he again has to visit the office in order to submit the instalment.
Further Akhuwat is thoroughly involved in ensuring due usage of the funds being
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disbursed as loan to the individual thus making this whole scenario a process where
the service provider and the service receiver are in close contact with each other.
Post Encounter Stage:
People after using the service or after encountering with the service make some sort
of judgment about the service based on their experiences with the service and these
experiences can be unsatisfactory or delightful. According to the above scenario this
whole process of people taking the loans from Akhuwat without any interest and
without putting anything on stake as a collateral and then repaying the loan on easy
monthly instalments brings satisfaction to many borrowers and is often considered to
be of more good than their expectations. Apart from the loan, the organization
(Akhuwat) makes a long lasting bond with their borrowers by giving them
consultation and inviting them to different community events. The high satisfaction
level of the borrower proves out to be a beneficial factor in the improvement of their
financial condition. The borrower by himself does the word of mouth marketing by
sharing with others about the positive experiences he had with the service which
ultimately brings more people to come forward and use the service.
The Flower of Service
Facilitating Supplementary Services of AKHUWAT (Non Profitable Organization):
Information:
Akhuwat basically provides interest-free micro loans which is their core service. If we
talk about information as a facilitating supplementary service it includes various
information that is provided by Akhuwat such as direction to its different locations,
area branches and the offices to which people can go and get the application forms
for micro loans and other important information needed to adopt for the process of
applying for loans or key lending methodologies such as:
Program Introduction: (brief introduction of what the program is all about
Individual’s Selection: (how one individual is selected , the eligibility or
selection criteria for the micro loan).
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Preparation of Business Plans.
Credit Appraisal: (how the credit check is done of the person who would apply
for the loan).
Guarantors of Loans.
Credit Disbursement/Capacity Building.
Recovery/Follow up: (and how to repay the loan in installments).
This information is provided on Akhuwat’s website as well as people can get this
information by meeting the employees working in the Akhuwat’s area branches.
The information or assistance on how to start a small business which the borrower
has planned to do is also given, which is counted as a facilitating supplementary
service of AKHUWAT in addition to its core service or product.
Order-taking:
Akhuwat has designed an application form which requires prospective applicants to
go through an application process designed to gather relevant information and to
screen out those who do not meet the criteria for receiving loans because of the bad
credit record etc. These forms are available in each of the area branches in different
locations of different cities for the purpose to take orders of people who are willing to
apply for the micro loans and those applications are then further processed through
different channels in order to finalize the applicant’s eligibility to receive the loans.
The filled applications with documents are recorded manually in the registers as well
as in the computers for the sake of company record.
Billing:
Akhuwat have no billing charges for their service because of its non-profit existence
and the intentions of working for the alleviation of poverty instead of earning profits.
Akhuwat only charges a minimal fee of Rs. 100 for its application form or to bear the
expenses of application process. They make a manual hand written receipt for this
application fee.
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Payment:
The payment process in terms of the application for services is very fast because the
fee Akhuwat charges for their application form is very minimal i.e. Rs100 and
applicants do not find any difficulty to pay this fee, so they pay the application fee on
the spot without any delay. On the other hand in terms of the organization the
payment procedure or the disbursement of loans is always done in sacred places
like Mosques and Churches which instils a sense of more liability on the borrower to
repay the loan. This is possibly one of the reasons that the company has 99.8%
recovery rate. The borrowers repay the loans in instalments like if the person has
taken loan of amount Rs10,000, his loan will be divided into 12 instalments (one
year) and he will then have to submit the monthly instalment accordingly to their
respective Akhuwat area branch or to the organization account in any Habib bank
limited branch.
Enhancing Supplementary Services of AKHUWAT:
Consultation:
It involves detailed comprehensive information to the applicant’s queries and the
people who are willing to apply for the loan rather than a brief short response or
printed information to the customer query that anticipates their needs. It usually
involves a two way communication between the Akhuwat representative (employee)
and the applicant and in Akhuwat this is widely done. A walk-in person who is
wishing to apply for a loan shares his business idea or plan with Akhuwat employee
and the employee then helps him to modify his idea or helps him in other possible
manner, gives him consultation regarding his business idea and how to implement
his idea effectively and make it more constructive. In this aspect even after the
borrowers of Akhuwat start their own businesses, the organization gives them
technical consulting in terms of vocational training sessions which helps the
borrowers in their skill development.
The organization adopts a principle which is based on not making the people
dependent, the organization wants the people who borrow from them to stand on
their own feet and one day become donors themselves for others in need. So for this
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they are guiding people and are supporting people and thus instil a value to help
others after their own needs are fulfilled.
Hospitality:
In Akhuwat hospitality is not considered to be as a great enhancing supplementary
service to its core service in routine because it is a non-profit organization and
mostly run on donations, so they hardly spend any thing on hospitality. The area
offices (branches) are very simple. Akhuwat has built their offices either inside the
mosques or just outside the mosques to maintain the simplicity and to save
themselves from the high operational costs, they do not have any chairs in the
offices, both the employees and the people (borrowers and applicants ) have to sit
on the floor and they do not offer any kind of beverages apart from water and try to
focus on their core service which is to provide interest free micro loans to the needy
and deserving people. Even the people are not bothered of the hospitality factor,
they are just concerned about getting a loan from the organizations which is the only
thing of great importance for them.
Apart from this, most of the times whenever AKHUWAT has its loan disbursement
ceremony, they treat their borrowers and their families and friends with great
hospitality as sometimes the loan disbursement ceremony is arranged with a big
carnival for the borrower’s children and also lunch boxes are distributed to the
borrowers after the loan disbursement ceremony to create a sense of brotherhood
and to let the borrowers know that the organization is not just focused to give loans
but also to share happiness and sense of affiliation among the community. The
organization also provides pick and drop service to the borrowers for the event.
Exceptions:
Akhuwat helps its eligible applicants to find other people who are also wishing to
apply for a loan because the organization gives loan to groups (forming of 4
applicants) instead to a single applicant because they then become guarantors of
each other so if an applicant finds it difficulty in finding more people to form a group,
the organization helps the individual in resolving this matter. Another exception to the
main service is that they also arrange vocational training sessions for the skill
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development of the borrowers and also help the borrowers in starting their business
by giving suggestions or telling them different ways through which they can do their
business effectively as the organization focuses on the alleviation of poverty by
empowering the people. Apart from this, most of the times whenever AKHUWAT has
its loan disbursement ceremony, they treat their borrowers and their families and
friends with great hospitality and give them a very warm welcome as sometimes the
loan disbursement ceremony is arranged with a big carnival for the borrower’s
children and also lunch boxes are distributed to the borrowers after the loan
disbursement ceremony to create a sense of brotherhood among the community and
to let the borrowers know that the organization is not just focused to give loans but
also to share happiness and sense of affiliation among the community. The
organization also provides pick and drop service to the borrowers for the event.
The organization takes the complaints of the borrowers seriously and works on
resolving the issues of the borrowers so that they do not have to face the problems
in future.
Distribution of Services
Distribution mechanism plays an important role in deciding the success or failure of
any market offering. When it comes to distribution of a service offering this becomes
even more crucial and the possibilities of failure increase if the distribution is not
maintained at an appropriate level. Akhuwat Foundation has a wide network of 302
branches in 207 cities and towns of Pakistan. It uses its local offices and mosques or
churches for introducing its offerings to the low income households. The whole
process is of high contact in nature where representative of Akhuwat Foundation and
the borrower remains in continuous contact with each other for ensuring the
successful achievement of the purpose for which the loan was sanctioned. The
simplicity of the system and the whole process makes it so easy to understand for
any layman but despite this the success of Akhuwat speaks for itself.
Though there is not much to share about the distribution system of the services
offered by Akhuwat due to it’s over simplicity however we will present an overview
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here. (Details overlap with the other information that has been provided in this report
therefore has not been mentioned to avoid repetition).
What is Distributed? :
1. Information and Promotion Flow: Akhuwat Foundation organizes various
introductory sessions in low income localities where the audience is
introduced with the services being offered by the organization. These
sessions normally take place in mosques or churches after prayers and
normally the previous borrowers of Akhuwat loans are invited to share their
experiences with the local community. Apart from this when an interested
borrower visits Akhuwat’s facility he is provided complete guidance about the
available loan and the application process. Also he is provided complete
assistance in preparing a viable plan and an effective application for the loan.
Similarly information flow also takes place once the loan has been disbursed
in order to ensure that the borrower is better able to reap maximum benefit
out of the loan that he has received. This information is either in the form of
skill enhancement training or in the form of personal counseling.
From donor’s perspective information flow takes place when the prospective
owners are provided audit and performance reports, borrower profiles and
details, activity reports etc. mostly through the organizations availability over
the internet or through the events exclusively organized for donors. This all
adds to the credibility of the organization and thus the success of Akhuwat
suggests that this also enables a continuous flow of donations from all over
the world.
2. Negotiation Flow: When it comes to negotiating the application, the
representatives from Akhuwat provide necessary advisory and counseling
services to the prospective borrower while preparing a viable business plan.
The sole purpose of negotiations in this case is not to get maximum benefit
from the provision of services but what Akhuwat attempts to achieve is the
maximum benefit for the prospective borrower so that he can utilize the
sanctioned funds in best possible manner.
3. Product Flow: The product i.e. the loan approved by Akhuwat Foundation
after necessary evaluation and assessment is disbursed in a special event
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where around 100-150 borrowers are given their requested loans. This
ceremony takes place in the presence of local community members and takes
place in Akhuwat’s Office or in a mosque or church. It is the point at which the
actual flow of the product takes place.
How is it Distributed? :
Akhuwat with its nationwide presence ensures the distribution of loans to those who
are in need of it. Throughout the process both the applicant and the representatives
from Akhuwat remain in close contact with each and interact on number of
occasions. The whole service offering takes place in such a way that at one moment
the organization (service provider) goes to the customer (borrower) and on the other
instance the customer goes to the organization for the needed assistance. The
process in terms of nature of interaction between the borrower and Akhuwat
Foundation can be seen below:
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The Marketing Communications Mix for Akhuwat foundation
The communication mix is a term used for the combination of promotion tools.
Marketers try to find the right balance between all the different ways of marketing
communication. The marketing budget has a huge impact on this marketing mix.
NGO’s without budget have a totally different mix than multinationals with millions to
spend on promotion. The right mix will also depend on the target and the strategy of
an organization.
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Step 1 Akhuwat goes to customer (prosepective) for awareness of the services provided by the organization.
Step 2 Customer goes to Akhuwat for more information and application submission.
Step 3 Customer goes to Akhuwat(though in actual both customer and organization go to a community gathering) for loan disbursement in a special event.
Step 4 Customer goes to Akhuwat for capacity and skills building training.
Step 5 Akhuwat representative visits the customer for monitoring the performance.
Step 6 Customer goes to Akhuwat's office (or interacts remotely through bank branch) for submission of monthly instalments.
Current Position:
Means of Advertisements for Akhuwat Foundation are the marketing strategies
focusing on sending message to reach out to the sponsors for their generous
donations and at the same time identifying and attracting potential beneficiaries
through media and public gatherings. Over all, Akhuwat Foundation has managed to
ensure its presence on every media occasionally but their activity level is pretty
much dull. There can be seen very less frequent talks about them in print and
electronic media. They have their account on social mediums like Facebook,
Instagram etc. but they are not actively managed which can be due to multiple
theoretical reasons like no specially dedicated teams to handle every media or
negating the importance of it in this time. Their corporate website seems like giving
every bit of information about them and their offerings as well as their activities in
public forums and annual gatherings but it is also not actively updated as even the
newsletters are shown to be published every month but were published till June on
their website for this year. They hold internal events including workshops, seminars,
conferences, Public/Donor Events and Beneficiaries training events to train them for
their future prospects in this field but none of them can be seen without accessing
their website thus clearly depicting lack of publicizing and advertising themselves.
The need is to focus on the areas where a greater concentration is required as being
involved in a business though non-profit, they need to market themselves.
The current tools of marketing being utilized by Akhuwat Foundation are:
Print & Electronic Media.
Business Magazines.
Newsletters.
Social Media.
Facebook.
Twitter.
LinkedIn.
Instagram.
Corporate Website.
akhuwat.org.pk.
Public Forums.
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Educational Institutions.
Workshops, seminars, conferences.
Public/Donor Events.
Beneficiaries training events.
Annual Gatherings.
Information sessions by CEO.
Occasional appearance of Public representatives.
Special Events (for Donors)
Word of Mouth.
Letters and memos of communication to donors and sponsors.
Recommendations:
Online and media strategies to market the programs, activities and campaigns.
Above the Line Advertising or Below the Line? : o There are a number of approaches to promotion that are open to
organizations. Above-the-line promotions use mass media methods.
This type of promotion focuses on advertising to a large audience. It
includes print, online media, television and cinema advertising. Making
a message memorable to a large audience is not always easy. It is
difficult to tailor a promotion to a specific group of consumers through
above-the-line promotions. This is because it is viewed by a mass
audience with different tastes and needs. Above-the-line promotion is
also very expensive but effective.
Below-the-line methods are very specific, memorable activities focused
on targeted groups of consumers. They are under the control of the
organisation. Akhuwat Foundation can use these techniques to target
clearly defined consumer groups rather than a mass audience like its
above-the-line activity. The purpose of these activities has been to
develop the brand by creating awareness and building a brand profile.
Below-the-line methods include:
Sponsorship
Sales promotions
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Public relations
Personal selling
Direct marketing.
Though Akhuwat Foundation is engaged in developing strong PR as its
main functions heavily rely on this source but again they have to keep
on improvising it by bringing in new people for this purpose who can
further engage in an indirect selling as a noble cause.
Sponsorship and Social Media:
Sponsorships have helped the organizations to raise their profile amongst key target
markets. Sponsorship involves positioning and matching brands together. It develops
a relationship that is both comfortable and positive for both businesses.
Traditional press releases work alongside newer forms of marketing. For example,
Akhuwat Foundation can use digital and social media as an integral part of its below-
the-line activity. This helps to create relationships with customers online. These
channels include blogs and social networking sites (such as Facebook) where they
are already present. Akhuwat Foundation also has its own YouTube channel along
with presence on Instagram and Twitter but their activity level is dull which needs to
be focused on to emphasize its brand presence amongst target consumers. This can
enable them to develop eCRM, allowing Akhuwat Foundation to collect data from
customers and use it in a variety of ways for interaction. It also helps to create the
basis for viral marketing. This is when messages are so widely received that they are
passed on either electronically or by word of mouth to other customers.
Akhuwat Foundation can also support a variety of environmental issues, shown
through below-the-line promotions. For example, Akhuwat can work in partnerships
with independent environmental charities that aim to create social cohesion by
inspiring people to plant and love trees. Environmental issues are high on public
agenda. Partnerships like these are an important way for Akhuwat Foundation to
demonstrate its commitment to supporting public concerns.
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P rint and Broadcast Media :
Utilizing this media effectively can bring in a good value for Akhuwat Foundation.
They are currently having their newsletters printed but they are not seen on this
media as frequent as they should be because of its reach, this media highly ensures
the foundation to make itself known, as still; after all these years, it is not having that
reach that it requires. Running ads on local and national news channels is an option
to be considered with keenness. Working together, Akhuwat Foundation and
journalists can create stronger international reporting. Mainstream media and NGOs
have long had a symbiotic relationship, with the media using NGO experts for news
tips, quotes, and access. Now, with many foreign bureaus of major news outlets
shuttered, and the simultaneous growth of more media savvy NGOs, the agencies
are doing even more: researching and pitching stories, sharing contacts, developing
content and providing logistics, guidance, analysis, opinion and, in some cases,
funding. Put simply, without the help of these groups, many foreign news stories
would not be told at all. It is a natural evolution of an already strong relationship.
However, a slight, but fundamental, shift is underway in which NGOs are taking on
more and more functions of news media in their capacity to gather and manage
foreign news. While they certainly don't have the mission or means to provide daily
news coverage or replace that function for the media, they can and are helping to
address the foreign news gap. This cross-pollination seems more logical in the field,
as the number of people bearing witness to foreign stories shrinks.
The Importance of the Media to the Work of NGOs:
Mass media are channels, such as newspapers, magazines, radio or television, used
to communicate information to large groups of people. By regularly conveying
information to important audiences, from the general public to government and
international decision makers, the media plays a large role in shaping public debate.
The media are among the most important allies to the NGO community. Establishing
good relationships with journalists is an integral part of any effective media outreach
campaign. Some ways in which the media can be of importance to Akhuwat
Convey general information, serving as a public education tool.
Counter popular misconceptions.
Comment on an issue, providing an alternative viewpoint.
Celebrity endorsement:
Not just for their name value, research the A and B lists, and find someone who is
passionate about Akhuwat’s cause, and use them to promote their work. Finding a
champion and use their talents to raise both Akhuwat Foundation’s profile and theirs.
As the ‘Celebrity Endorsement and support for charities’ survey shows it is not
enough to put a ‘face’ to a charity’s cause in order to get funds. A celebrity’s
popularity changes quickly and today’s ‘in’ celebrity might quickly become liability.
That is why when deciding to use a celebrity for a campaign it is essential to select
the person carefully. So a careful and a humble choice is necessary. NGO has
greater responsibility towards the society and purely relies on building a reputable
and credible image. They need to portray themselves as an organization with
substance. Their actions need to be communicated in a way that people do not fall
for the glitz but understand the true impact of their work and actions. Hence the PR
officers working for Akhuwat should be very careful in finding the right fit for their
brand image.
Events & Fairs:
Getting actively involved in national and international events is the need of the hour
to get more recognition. Fairs remain an effective offline advertising tool. Thousands
of different fairs exist, all with a different subject or cause. Fairs about cars, windsurf
equipment, food, marketing, etc. Even for NGO’s like Akhuwat Foundation, there are
special fairs. For NGO’s looking for volunteers in different countries and cities other
sorts of fairs exist. Even if no one is interested, these fairs are a good way to talk to
interesting people and maybe collaboration can arise. Educational institutes often
organize fairs for students too especially for future choices about studies or students’
careers. Akhuwat Foundation can try to get a spot on these kind of fairs thus
exploring possibilities of getting new donors, volunteers or borrowers. Also Akhuwat
must organize special donor events that can be used to ensure a continuous stream
of donations from the current and new donors.
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A Final Word on Akhuwat’s Marketing Communication Mix & How to Better Utilize it:
Non-profit organizations like Akhuwat Foundation need to focus on building their
brands in order to market their vision, credibility, value, and impact of their work. In
marketing their brand, they should also be accountable to their donors and other
relevant stakeholders. In addition, they should develop a culture of transforming,
monitoring and evaluating their data into case studies and other materials that could
be of interest to the donor market. These materials will also help them to build
credibility for their causes. Lastly, they should develop interactive websites to enable
their staff to interact with donors/potential donors, volunteers and other interested
stakeholders. Considering Akhuwat’s well known and widely admired success we
are of the view that the organization needs to pay more attention towards integrated
marketing communications and to come up with a right mix of marketing
opportunities. Though a non-profit organization like Akhuwat has very few options
left for marketing due to financial constraints but again the true art lies in getting
maximum reach with minimum investment. The purpose of sharing all the above
possible mediums was to explore the current approach adopted by the Akhuwat
Foundation and to present possibilities of exploring few other mediums as well. The
best way for Akhuwat is to become more vibrant in terms of marketing itself and its
programs by getting more involved with those who have the potential to give more
coverage to Akhuwat’s work. We are of the view that Akhuwat must try to attract
maximum public attention by collaborating with various organizations in such a way
that Akhuwat gets marketed without investing a lot in this regard. This is the best
approach through which Akhuwat can expand its operations and can grow its current
success.
The Process (Service Process)
Akhuwat Foundation adopts a simple and easy to understand process for allocation
and disbursement of loans. In fact the whole process is so easy that it has been
admired by leading economists for its ability to survive and prosper despite being a
simple business model. The process of loan sanction starts with the reliance on
previous borrowers for marketing of the services provided by Akhuwat Foundation.
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The individual loans process (focus of our project) is promoted through awareness
and promotional campaigns in low income localities and market places while relying
mainly on the previous borrowers of loans. During such marketing and introductory
sessions the program is introduced and the concept is shared in mosques or
churches benefitting from the gathering that originally gathered for prayers. This
adaptation not only reduces the operational costs for Akhuwat but also opens the
doors of places of religious significance but also attaches the mantra of faith and
worship with the socio-economic development of the community. The loan process in
real terms starts when the interested person visits the office of Akhuwat Foundation
with the purpose of acquiring further information. At this stage the Unit Manager or
the Loan Officer (representative of the service provider i.e. Akhuwat Foundation)
comes in direct contact with the prospective borrower and provides all necessary
information and guidance regarding the application process and the loan details.
After this, the phase of application submission comes where again the Loan Officer
provides assistance to the applicant in filling the details asked in the application form.
Once this process is complete the officer carries out the initial scrutiny of the
application to check whether the applicant is eligible for a loan or not based on
his/her income and social capital.
Once the application is submitted and initial scrutiny is performed, the next phase
covers the preparation of business plan. In this phase the business idea of the
applicant is assessed to see that whether it is a viable plan and whether it will be
able to generate enough income to make revenues in addition to the household
expenses of the individual. This is done to make sure that the individual is in a
position to repay the loan easily. An interview with the family is also a part of this
phase and in this interview the involvement of the family and their support for the
proposed business is assessed.
After this, comes the phase of final assessment and decision making against the
application that has been forwarded by the local loan officer. This phase starts with
the evaluation of the application by the Branch Manager who assesses the technical
aspect of the submitted application and then forwards it to the credit committee
(includes loan officer, branch manager and the area/regional manager). In case the
decision is made in favour of the applicant the process of loan disbursement is
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initiated. This whole process of application processing and decision making takes
almost 3 weeks before a final decision is made. Next, the borrower is asked to
provide two guarantors who verify the credentials of the applicant and also accept
the responsibility of looking after the borrower. These guarantors also give
assurance that they will ensure timely payment of the loan instalments.
After this a special event is arranged (usually at a branch office/mosque or church)
where the loan is disbursed in an official ceremony in the presence of guarantors
and local community members. After this Akhuwat remains in touch with the
borrower and arranges various sessions for capacity and skill building of the
borrowers so that they are better able to carry on their work more efficiently and
effectively.
Akhuwat Foundation also adopts a proper mechanism for ensuring due payment of
the instalments of the loan. In this regard, the loan officer or the unit manager visits
the borrower on regular basis to monitor his performance and to make sure that the
payments are made within the specified time. It is due to this very reason that the
recovery rate of Akhuwat is presently at 99.7%.
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Process Flow Diagram (Summarized Version)
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Program Introduction (Market through
Awareness Campaign)
Loans are marketed through the use of awareness campaigns mainly performed in poor localities and poor localities. This process is mainly done with the involvement of previous borrowers. Further local mosques and churches are also used to introduce the program.
Individual Selection & Submission of
Application
The loan process is initiated when an individual interested in availing loan visits the office for submission of application for financial assistance. The loan officer provides necessary guidance and also performs initial scrutiny of the applicant and checks his eligibility.
Preparation of Financial/Business Plan &
Evaluation of Applicant
The business plan of the applicant is reviewed and necessary assistance is also provided for preparation of a viable plan. The viability of the plan in terms of its ability to cover the expenses is checked. Also the applicant's family is interviewd at this stage.
Further Assessment by Credit Committee &
Decision Making
After initial assessment by the loan officer the application is forwarded for assessment by branch manager and credit committee. After careful assessment a decision regarding the application is made and the loan disbursement process starts (if approved).
Nomination of Guarantors
After approval the borrower is required to provide two guarantors on his behalf who vouch for the individual's credentials and accept responsibility of monitoring the borrower.
Funds Disbursement and Capacity Building
After the prorequisites are fulfilled, loan is disbursed to the applicant in an event. The organization also organizes capacity and skill building and social guidance activities/events for the borrowers with a motive of enabling them to carry on their work more effeciently and effectively.
Recovery & Follow Up
After disbursement the loan officer monitors the progress of the borrower and ensures timely payment of the instalments. Further necessary assistance is provided whenever requested.
Final Word
Akhuwat Foundation is possibly the best microfinance institute that operates in any
part of the world and that too as a non-profit organization. The success of Akhuwat
lies in its simple business model that has been designed keeping in view the needs
and requirements of the local community. Considering the services aspect of the
Akhuwat Foundation we can say that the organization has been able to maintain an
appropriate level of the ambience for its offerings while providing the loan services to
the prospective borrowers in easily acceptable terms. It is due this simplicity that the
organization has been able to keep its costs at a minimal level. However we are of
the view that by working on its marketing communication and integrating the
available marketing mediums in an appropriate manner will allow the organization to