Academic journal article Journal of Economics and Economic Education Research

Customer Insights for Community-Economic-Development Agencies (EDAS): The Time Series Behavior of Programs

Academic journal article Journal of Economics and Economic Education Research

Customer Insights for Community-Economic-Development Agencies (EDAS): The Time Series Behavior of Programs

Article excerpt

INTRODUCTION

This paper is built on the premise that government units should adopt marketing approaches to meet mandates and satisfy client needs in the present day, diminishing-resources environment. In line with (Varadarajan, 2009), we define marketing approaches as customer-satisfaction focused behavior of firms. Examples of market-focused behavior include target market choices, creating product(s) which offer value to customers in exchanges, etc. Note that the marketing approach aims to achieve optimum relationships between the organization and its environment (Litten, 1980; White & Hammermesh, 1981).

Critiques of the marketing approach tend to argue that it is inappropriate to run government like business (Litten, 1980). We believe that this competes with the view that government needs to be more responsive to the needs of the public and that marketing may help governments accomplish this goal (Wilkie & Moore, 2007). Indeed, Osborne and Gaebler (1993) observe that

      Democratic governments exist to serve their citizens. Businesses
   exist to make profits. And yet it is business that searches
   obsessively for new ways to please the people. Most governments are
   customer-blind, while McDonald's and Frito-Lay are customer-driven.
   This may be the ultimate indictment of bureaucratic government.

And for the argument that governments should not be in competition with the private sector (Copulos, 1977), it is essential to note that government is definitely not a business, but is an institution charged primarily with serving the public interest and that, in many cases, it can do this more effectively by employing a marketing approach (Kotler & Drucker, 1993),

To demonstrate the usefulness of marketing approaches to community development organizations, this paper utilizes a case study approach. Specifically, it highlights how a government-funded EDA, which is the outgrowth of a need for an agency to monitor conditions in rural Illinois, can benefit from analyzing its past behavior to gain insights into target-market selection.

LITERATURE REVIEW

Many EDAs offer products that can be directed at different end-use markets. For example, the EDA at the University of Illinois, University of Illinois Extension, offers educational services to small businesses, local governments, and residents (health education, for example). Since opportunities differ in different markets and the future of the EDA is tied to its markets, market selection is a crucial consideration in business planning (Rossiter & Percy, 1996).

In marketing, market selection is often based on classifying purchasers as heavy and light users. Since heavy users generate the most revenue for the business, marketing efforts such as advertising are focused on heavy users, the primary target audience (East, Malcolm & Vanhuele, 2008).

Statistical approaches that are employed to categorize users and profile them include group comparison procedures, and cluster analysis (Lilien & Rangaswamy, 2004). The group comparison procedure utilizes median split of product-usage statistics to gain insights into the attitudinal/psychographic differences between heavy and light users (see for example, Lantz, 1995). For cluster analysis, the focus is on exploration. Specifically, respondents' scores on a number of profile variables such as personality measures are subjected to (dis)similarity analysis and the resulting pattern examined to understand differences between heavy and light users (Dillon & Goldstein, 1984). Note the a priori assumption in cluster analysis that heavy and light users would differ on profile variables; a questionable assumption given conflicting findings in the extant literature (Hackleman & Duker, 1980; Morgan, 1979).

To understand the methods of market selection used in EDAs, a search for relevant academic and practitioners' publications was conducted. …

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