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The Study of IMC for Non-Profit Organization: An

Empirical Study of Corporate Foundations in Taiwan

WEN-HAI CHIH * LING-CHU HUANG **


Department of Business Administration Department of Business Administration
National Dong Hwa University National Dong Hwa University

TSUNG-JU YANG *** YUE-TING LUO ****


Institute of Service Industries and Management Legal Division
Minghsin University of Science and Technology Ben Q Corporation

Abstract
From the viewpoint of Non-Profit marketing, this research tried to figure out the model
of Integrated Marketing Communication (IMC) for Non-Profit Organization (NPO) and
the theoretical construct between external communication instrument, internal
processing performance and brand value. Top 300 corporate foundations in Taiwan are
chosen as the sample of the study. Three major findings are concluded from empirical
analysis. IMC’s technical level would influence NPO’s processing control performance
and brand equity. In addition, the internal processing control is the point mediation
variable in the model. For the long time to practice, NPO need to emphasis on internal
processing control except for external technical integration. Thus, the success of the
NPO brand equity is the IMC Outside-In integrated marketing. According to the results,
many related practice suggestions are also provided.

*
Professor
**
Ph.D. Student
***
Assistant Professor (Contact: morgan4117@must.edu.tw)
****
Company Staff
Introduction

Non-Profit Organizations (NPOs) play an important role in the 21st century. Peter
Drucker, a management guru, predicts that the cultural structure of the society will go
through massive changes and we should think how to turn around the contemporary
economic situations. NPOs have become a new power to drive the creation of the
society in the future with charities booming all over the world and gaining productivity.
As far as how NPOs operate, donators, receipts of assistance and volunteer
workers are consumers and clients. To meet the needs of consumers, NPOs need to
resort to business marketing models by being consumers-oriented. They should deliver
messages via communications instruments to stimulate purchase behaviours (e.g.,
Schultz, 1993; Shimp, 1997). In a similar vein, NPOs extend this marketing concept and
re-integrate the techniques to achieve the mission of their organizations by promoting
the contents of services to targeted customers. What is worth mentioning is that NPOs
are receiving resources from companies. Duncan and Moriarty (1997) suggested that by
participating in public activities, companies will not only establish a good image in
front of stakeholders and gain their support, but will also indirectly strengthen brand
equity with a certain degree of commercialization. It can be inferred that the operations
and development of NPOs dictate, in an invisible manner, the relationship between
brand equity and customers.
In the early days, scholars applied the concept of marketing to NPOs so as to
enable their organizations to achieve targets in a more efficient way (Kotler & Levy,
1969). However, the changes in cultural phenomena in the society have transformed the
marketing model from its traditional track. Schultz (1997b) suggested the concept of
Integrated Marketing Communication (IMC) to strategically integrate all the
communications vehicles by emphasizing the consistency of messages and the image of
consumers toward the organizations. Brand image is subjectively perceived by
consumers. Dobni and Zinkhan (1990) indicated that brand image enhances publicity
and customer loyalty. Therefore, IMC integrates marketing strategies and makes
communication vehicles professional so that once voice marketing. It assures the clear
delivery of messages outside-in and single positioning of themes, in order to create

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synergy (Naik & Raman, 2003). Therefore, IMC is beneficial to the long-term
development of NPOs.
NPOs are the charity organizations that serve public interests (Hansmann, 1980).
IMC is a concept in relation to marketing and communications (Burnett & Moriarty,
1998). The IMC strategic planning model for NPOs includes the external
communications mix as the strategic role (Kotler, 1997). Internal consensus is the
implementation key (Phelps, Harris, & Johnson, 1996). This is to be developed under
the missions and goals of the organization (Dees, Emerson, & Economy, 2001).
To sum up, the outside-in flow that starts with the client side is essential to the
complete and robust planning and evaluation of the IMC model for NPOs. Literature
has extension discussions on the IMC process, but not necessarily the discussions of the
IMC model. Obviously, past literature rarely explores in-depth the relevant issues from
this angle. Although a vast majority of the studies on IMC in Taiwan focus on
profit-making organizations. The studies on NPOs place their emphasis on the
perspectives of customers, and few of them perform empirical studies on the NPOs that
have based-marketing with organizations. With a view to this, this paper intends to
examine the current situations of IMC implementations in Taiwan by developing its
conceptual architecture in accordance with relevant literature.
Yarbrough (1996) indicated that large organizations tend to place particular
emphasis on IMC and they also tend to practice it. Therefore, this paper selects the top
300 NPOs in Taiwan to perform the empirical research, hoping that the research results
can serve as a reference to measure performances for the industry.

To sum up, the issues of this paper would like to explore are as follows:
(1)Whether the integration of external communications instrument by NPOs has
any influence on the effectively of IMC;
(2)Whether the technical level elements of IMC have influence on the brand equity
of NPOs;
(3)Whether the process control over IMC has influence on the brand equity of
NPOs.

In order to validate the relevant issues mentioned above, this paper sets out its
research purposes as follows:

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(1)To gain an understanding of the definitions and evaluations of IMC by NPOs;
(2)To construct performance indicators of IMC for NPOs;
(3)To examine the activities of IMC and their influence on brand equity of NPOs in
terms of technical level and process control performances management results.

Literature Review and Research Hypotheses

Non-Profit Organization (NPO)

According to Internal Revenue Code of the U.S., NPOs are defined as “a type of
organizations that serve public interests and enjoy tax-free incentives.” They include
organizations in education, religion, science and public safety. Non-profit organizations
should be defined as the organizations that do not aim to distribute earnings. Rather,
they spend their earnings on the missions of the organizations to drive public interests
(Hansmann, 1980). The classification of NPOs is a topic of many discussions.
Hansmann (1980) divides NPOs into four types in accordance with the financial sources
and control mechanisms of their organizations. Rados (1991) referred to the US laws
and divided NPOs in accordance with their functions and economic means. Salamon
and Anheier (1997) applied the international classification for the NPO classification.
As NPOs are involved with a variety of activities closely interwoven with the modern
society, the definitions and classifications of NPOs vary due to different focuses scholar
have in mind. To sum up, this paper defines NPOs as “organizations that do not aim to
make profits but to serve public interests as their mission. Their purpose is to pursue the
interest of target audience and the welfare of the society.”
Foundations are a type of NPOs whose purposes are to service the interest of the
public by acting as charities. Foundations rely on the interests of its funds and enjoy
tax-free incentives or taxation benefits. Salamon (1992) divided the foundations in the
U.S. into the following four kinds:
(1)Independent foundations established with funding from individuals, families or
a group of individuals;
(2)Corporate foundations established with donations from companies;
(3)Community foundations established with donations from communities;
(4)Operations that provide services by individuals.

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According to the survey in 2005 by Himalaya Foundation on the domestic NPOs,
approximately 70% of the top 300 foundations in Taiwan have established long-term
cooperation relationships with companies. The sources of funding are as follows:
donations from specific individuals (40.8%); donations from specific companies
(31.7%), donations from the general public (19.1%) and donations from the government
(8.4%). This indicates that independent foundations are the biggest group of NPOs in
Taiwan. Their sources of funding include donations from specific individuals and
donations from the general public. Corporate foundations rely on donations from
specific companies for their annual budgets completely. They also account for a high
percentage in Taiwan.
Corporate foundations rely on their parent companies for major resources.
Donations from companies remain the staple of a vast majority of NPOs. NPOs aim to
be customer-oriented by service donators, the recipients of assistance and volunteer
workers. They aim to fulfill their responsibilities to the society. Their mission marketing
is also more complex than their parent companies (Shapiro, 1973). As far as the
performance indicators are concerned, the profit-making organizations in terms of
performance evaluation of the organization, the evaluation indication of PO is mainly
based on quantity and profit, whilst NPO is more focused on non-quantitative or
subjective indication (Knoke and Prensky, 1984); in addition, Dees et al. (2001)
mentioned the reason of NPO’s crisis in “the spectrum of the social undertaking”:
against the backdrop of the lack of funds and intense competition, to obtain more stable
and diversified fund sources, switching to commercial development may encounter the
issues of operation and culture as well as oppose to the social mission of the
organization, which was also shared by Lovelock and Weinberg (1984) who argued that
NPO should carefully plan marketing strategies, distinguish target groups, meet their
needs in order to fulfill their missions. In retrospect of the earlier researches, Kotler and
Levy (1969) were the first authors to apply marketing ideas to NPO with a view to rise
up to the challenge brought about by the change of the environment. They suggested
that NPO adopt more advanced marketing approaches to cope with the complicated and
competitive social environment. Viewing from the perspective of social welfare, Segal
(1991) pointed out that social welfare organizations were often expected to provide
services ordinary enterprises cannot provide. For the huge influential power exerted by

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NPO brought about mostly social, mental or intangible benefits, Kotler and Andreasen
(1996) stated that such social marketing ideology can improve the demeanor and
altitude of consumers and establish unique and valuable status in customers’ minds.So
far, the extension of concept of marketing to NPOs has reached maturity (Kotler, 1997).
Therefore when NPO makes good use of marketing strategies and appropriately
integrates marketing activities of commercialization, the overall organizational
efficiency and activities’ results can be enhanced. Thus this study approached the IMC
development of NPO “Enterprise Foundation” based on non-profitable integrative
marketing point of view.

Integrated Marketing Communication (IMC)

IMC originated from the end of 1980s. Due to multiplex and homogenous nature of
the products, the influence of advertisement information waned; this fact along with
other factors such as the fast-changing market competition environment propelled IMC
concept’s development to pick up momentum in the industrial area (e.g., Dilenscheider,
1991; Nowak and Joseph, 1994; Schultz, 1997a), giving rise to the new management
trend (Schultz & Kitchen, 2000). In retrospect of the literature, complete marketing
communication plan is capable of evaluating different communication skills, providing
consumer clear and consistent information, and promoting the maximum
communication benefits. Therefore IMC has been the hot topic in the marketing
industry all along.

Emergence of IMC

With the big leap forward of the IT development and vigorous growth of the mass
media, information received by consumers increases at geometrical proportion with the
credibility of the information lowered relatively, which sent the overall marketing
operation, cognition and purchase behavior of consumers off the course of traditional
linear marketing mode (Schultz, 1996). How to convey information through marketing
instrument to gain the best results has become the matter modern marketing personnel
must bear in mind (Duncan & Everett, 1993); due to the change of marketing
environment, Rapp and Collins (1990) pointed out that with the new trend surfacing in
the market, including the changes of population structure and lifestyle, the redundant

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advertisement-caused lowering of customer loyalty etc., developing IMC can establish
positive view, altitude and conduct about enterprise brand among related parties, hence
the necessity of the integration of marketing communication (e.g., Duncan & Caywood,
1996; Duncan & Moriarty, 1997; Keller, 2001).

IMC concept and definition

IMC has been developed for many years; various scholars unanimously agree that
IMC is formed through the change of the trend of media, technology and consumers and
is a view of communicating marketing plan with the market (e.g., Burnett & Moriarty,
1998; Ewing, Bussy, & Caruana, 2000; Peltier, Schibrowsky, Schultz, & Davis, 2002).
IMC scope covers the marketing of single product or the whole brand, and extends to
the outward marketing communication of enterprise organization. Therefore IMC
features execution integration consistent with information, and plan integration in terms
of ideas (Petrison & Wang, 1996), strategic integrative planning marketing instrument
and channel, increasing the purchase rate of consumers, non-exclusive method of
conveying information (Burnett & Moriarty, 1998); this view shares similar features
with the opinion of Duncan and Caywood (1996) of using communication instrument to
develop the consistent marketing communication activities. Based on above views, in
this study IMC is defined as follows: “attempting to influence the subjective cognition
of consumers; through strategic management marketing communication, conveying
consistent information from the outside to the inside, enhancing brand imaging and
improving customer relations.”

IMC enterprise planning model

Complete marketing evaluation structure can assess the integration degree of


enterprise marketing, and provide feedback and improvement. Regarding the discussion
of IMC enterprise planning models, Schultz, Tannenbaum, and Lauterborn (1993),
Burnett and Moriarty (1998) respectively established different enterprise planning
model concepts; the former divided consumer database, emphasized on the Relationship
Marketing based on the interaction with consumers while the latter focused on the
product, price and channel of marketing combination, valued its marketing objective
and strategy. Both models shared the same nature of integrating communication

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instruments, conveying consistent information, interacting with consumers. In addition,
Duncan and Moriarty (1998) considered the interactive relationship between marketing
activities and related parties, and proposed to further derive brand value with
communication-based IMC model; however to plan the enterprise planning model of
NPO and IMC, the development must be based on the initial mission and objectives of
the organization, and evaluation and modification of model should be accepted. This
study selected the IMC enterprise planning model empirically developed by “Enterprise
Foundation” of NPO.

IMC evaluation instrument and performance evaluation

To learn about the gap between IMC objective and actual performance, how to
properly use communication instrument and establish effective evaluation method
becomes even more important. Duncan and Moriarty (1997) proposed two performance
evaluation approaches of “relationship matrix and integrated marketing inspection
approach” regarding IMC, one is “output control” that evaluates the outside results of
integrated marketing (for example: customers’ returns, times of purchases and
recommendation rates etc.), and is more marketing performance evaluation oriented;
another “process control” is then the evaluation of the IMC inside the organization (for
example: communication target, communication information and paying attention to
related parties etc.), showing that evaluation criteria are not consistent between the
outside and the inside and inspection approach still cannot offer complete interpretation
of the integration degree. Regarding the imperfect part, this study reviewed literature,
adopted the IMC model developed on the basis of communication proposed by Duncan
and Moriarty (1998), and made use of the five communication instruments of
advertisement, promotion, direct sale, public relations and promotion by salesperson at
the marketing communication level; these marketing communication combinations are
regarded as the important strategic roles (e.g., Caywood, Schultz, & Wang, 1991; Kotler,
1997; Shimp, 1997), thus suitable to serve as the main structure of outside “technical
level”, whilst internal “process control” emphasizes the performance of IMC conducted
by the organization, taking the inspection focuses of consistency, interaction, objective
and evaluations of foundation organization and enterprise planning as the structure.
Based on the above, to construct the consumer-oriented IMC performance from the

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outside to the inside, this study proposed hypothesis 1:
H1: IMC “technical level” has significant positive influence on the performance
of “process control”.

Brand Equity (BE)

Brand is the asset of the enterprise through which the enterprise can gain the upper
hand and obtain sustainable competitive edge and good performance (e.g., Day, 1994;
Aaker, 1996). NPO is lack of concrete product media and creating brand thus becomes
the largest asset. Cynthia Round, executive director of brand strategy and marketing of
“United Way”, held that NPO is more in need of understanding brand’s influence than
commercial companies because NPO’s major assets lie in the reputation. Regardless of
PO or NPO, brand benefit is currently still the focus of attention of research of
marketing activates and is also one of the most popular and potential marketing
concepts; it drastically enhances the importance of brand in marketing strategy.
Meanwhile Krishnan (1996) also pointed out the important indication of brand strength
that is coupled with brand association in consumers’ minds. Therefore enriching the
contents of brand knowledge is relatively important, including the concepts of brand
reputation, brand association and brand image etc. that are all important sources of
brand equity (e.g., Aaker, 1991; Berry, 2000). Based on the above definitions, different
scholars’ opinion about brand equity varies with no unanimous view formed so far
(Barwise, 1993).
NPO operation model is more customer service oriented. This study referred to the
IMC interactive relation management view proposed by Duncan and Moriarty (1998),
and evaluated brand value and assets valued by related parties. And based on customer
opinion of Aaker (1991), it defined brand as the organizational assets and debit
integration that can provide consumer and manufacturer value. This study proposed that
brand equity are composed of brand loyalty, cognitive quality, brand association and
other exclusive brand assets (e.g. patent, trademark, channel relations etc.). In addition
Aaker (1996) further developed a set of brand asset evaluation approaches to conduct
evaluation through product and market with ten evaluation indicators. Taking above
views of scholars into consideration, this study proposed four structures of brand loyalty,
brand reputation, cognitive quality and brand association etc. to establish the evaluation

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structure of IMC “brand equity”.

The relationship between Integrated Marketing Communication and Brand Equity

To NPO, brand is the biggest asset. Schultz (1998) pointed out that creating brand
value was not only an important contribution to the interest-related people, but also the
core element of planning IMC. And the main purpose of IMC is to enable the
consumers to learn more about the enterprise or product visibility so as to attract more
consumers.
Some studies in the US have confirmed initially that the establishment of the IMC
brand effectiveness (Low, 2000) was supported. The related literature proves that there
may be relativities between the process and customers of IMC, and between the brand
and performance (Duncan & Moriarty, 1998), the empirical study has also proven the
relationship (e.g., Cornelissen, Lock, & Gardner, 2001; Schultz, Bill, & Scott, 2004). In
addition, the IMC are target consumer oriented, helping the enterprise establish
successful brand and delivering more effective messages through strategic management
communication instruments and channel (Schultz, 1996), meanwhile, it can also lower
the marketing cost and promote the communication function to the biggest, therefore, it
is the best way to manage the brand asset (Ganesan, 1994).
According to the understanding above of the close relationship between IMC and
brand, the research studies the concept of “brand equity” based on "technical level" and
“process control” performance respectively in order to establish and measure the IMC
evaluation mode of NPO management effectiveness, and put forward Hypothesis 2 and
Hypothesis 3.
H2: IMC “technical level” has a significant positive impact on NPO “brand
equity”.
H3: IMC “process control” performance has a significant positive impact on
NPO “brand equity”.

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Research Method

Research framework

The paper studies the IMC evaluation mode in the Non-Profit view, and studies the
various established hypotheses through the literature. The relationship between the
concepts of IMC “technical level”, “process control” performance and “brand equity”
which are the concepts framework of the research are shown as Figure 1.

Technical level Process control Brand equity

Advertisement Consistency Brand loyalty


Sales promotion H1 Interaction H3 Brand popularity
Direct selling Mission Consciousness quality
Public relations Basic organization Brand association
Personnel selling Plan evaluation

H2

Figure 1 Research framework

Variables’ operational definition and questionnaire design

The variables’ operational definition and measure methods of the research are
explained as follows. Except the basic data of the responders, the Likert 7-point scale
was adopted in the research when measuring, in which 1 means great disagreement, and
7 means great agreement. The research subjects were the chief executives or top
executives of foundation, the related scale was be revised according to the NPO features
before application.

IMC technical level

The research treated the IMC “technical level” as an external variable, referring to
the five elements of Duncan and Moriarty (1998), including advertisement, sales
promotion, direct sale and public relations, each element has 3 questions and 15

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questions in total. The definition and measure of the IMC “technical level” are shown in
Table 1.

Table 1 IMC “technical level” definitions and measures


Concept definition Dimension Operational definition Questionnaire items
Evaluate the effects Advertise- Convey the concepts, 1. Deliver organization messages via the
of the external ment products or services to television advertisements.
communication customers via various 2. Deliver organization messages via the
instruments media. advertisements of papers and
integration. magazines..
3. Deliver organization messages via the
network advertisements.
Sales Stimulate the 4. Deliver organization messages via
promotion consumers to purchase sweepstakes.
or the retailers to 5. Deliver organization messages via
stock.. competitions and games.
6. Deliver messages via the logo gifts’
presenting.
Direct Establish the 7. Deliver messages via the network
selling individual advertisements or websites.
communication with 8. Deliver messages via mailing or
customers and faxing.
long-term relationship 9. Deliver messages via telephone
of mutual trust. selling.
Public Design a plan to 10. Deliver organization messages via
relations improve, maintain or papers and magazines.
protect the industry 11. Deliver messages by attending
and product image. Charity and public welfare activity.
12. Deliver organization messages via
Sponsorship.
Personnel Stimulate the purchase 13. Deliver organization messages via the
selling with the actual staff’s mouth spread.
interaction between 14. Deliver organization messages by
sales and consumers. holding exhibitions.
15. Deliver messages via the result
presentation.

IMC process control performance

The research treated the IMC “process control” performance as media variable,
referring to the five elements of Duncan and Moriarty (1997), including consistency,
interaction, mission, basic organization and plan evaluation, each element has 3
questions and 15 questions in total. The definition and measure of the IMC "process
control" performance are shown in Table 2.

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Table 2 IMC “process control” definitions and measures
Concept definition Dimension Operational definition Questionnaire items
Evaluate the effects Consistency Communication 1. Review the marketing plan
of carrying out IMC instruments and periodically to confirm the
in internal conveyed messages consistency.
organization. have reached the 2. Carry on an individual marketing
combined effect of activity to the different service
consistency. objects.
3. Emphasis on the quality of activities,
services cases.
Interaction Communicate with 4. There should be a set of specialized
customers and method to handling inquiries and
potential customers, complaints.
and establish 5. The database system is convenient
relationship. and easy to use.
6. Record all complains, praises, advices
and consumptions in details.
Mission Make cross-functional 7. All the other departments should
plan and establish understand the marketing goals that
partnerships with the organization emphasizes on.
external organizations. 8. The executants should know about the
advantages and disadvantages
marketing communications methods
clearly.
9. An inter-departmental cooperation
should be carried out to manage the
brand and build the organization
image.
Basic All the dissemination 10. The organization mission is essential
organization activities for in the dissemination programming.
management are the 11. There should be specified objects and
mission-based planning of engaging public welfare
development activities.
marketing. 12. The organization mission should gain
the trust and support from the service
objects.
Plan There should be 13. Promote the contact of service objects
evaluation independent marketing and organization brand.
communication plan 14. Fully exertive the advantage of each
which pays more kind marketing dissemination method.
attention to the 15. Track and investigate the service
relationship between objects to evaluate the interaction
people. relationship.

NPO Brand equity

In order to evaluate the brand value specifically, the research sets the brand equity as
result variable, referring to the four elements of Aaker (1996), including brand loyalty,
brand popularity, consciousness quality and brand association, each element has 3
questions and 12 questions in total. The definition and measure of the NPO “brand
equity” are shown in Table 3.

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Table 3 NPO “brand equity” definitions and measures
Concept definition Dimension Operational definition Questionnaire items
Evaluate the effects Brand The service object's 1. The service object will recommend it
of enterprise’s lasting loyalty brand-dependent to other person.
management of degree. 2. The service object would like to
brand. participate in an activity again.
3. The service object would like to
participate in an activity even if there
is no advertisement.
Brand The brand associated 4. The service object appreciates the
popularity things that remain in enterprise that the brand belongs to.
the memories of the 5. The type of service object is very
service object. clear.
6. The service object believes in the
things established by the enterprise.
Consciousn The ability that the 7. The brand is considered as the
ess quality dissemination object representative of the same kind of
recognizes or reminds organizations.
the brand and the 8. The brand represents a good value in
service. one's impression.
9. The brand can be recognized in a
number of non-profit organizations.
Brand The service object's 10. The organization's activities can
association overall quality provide high quality services.
consciousness of the 11. The organization's activities meet the
product or the service. demand of information.
12. The quality and brand image of the
organization's activities are consistent.

Basic data

Basic data included the establish time of foundation, foundation fund, staff number
and foundation type.

Research targets and scope

The investigating scopes of the research were all registered social welfare charity
foundations in Taiwan, the selection criteria’s matrix was that the fund scale should be
big, the foundation should have long-term cooperation with business enterprises, and in
accordance with the representative of the foundation. Taking the time and cost limitation
into consideration, the research mainly referred to the Foundation Directory published
by the local government operated “the Division of the Ministry of the Interior” and
“China Credit Bureau” which is run by private capital. After the comparison and
contrast, the Taiwan Foundation Directory published by the annual investigation of
“Himalayan Research Development Foundation” was selected, and the “The 300 main

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foundation directory in Taiwan- 2005 Edition” is focused and selected as the research
object.
The research adopted different investigating methods in two periods: personnel
interview and mailing. Before issuing, the law personnel, practice experts and an
academic expert of “Enterprise Foundation” should be consulted. The questionnaire was
released formally after language revision, and the return mail was the main form of
feedback in each investigation. The full cooperation and support of top executives are
needed to carry out IMC (Duncan & Caywood, 1996), and in order to make sure the
sample is typical, the chief executives or executives of foundation should be specified as
the responders. During the questionnaire investigation, the respondents units should be
notified via telephone or e-mail, including the notification in advance and confirmation
after release, and the questionnaire should be mailed again via e-mail or fax to the units
which have not received yet, in order to control the overall quality and effectiveness of
the released questionnaire. The research questionnaire survey was conducted from
November to the end of December in 2006, with a period of 60 days.
After selecting effective samples, the research will carry out every analysis,
including descriptive statistics, confirmatory factor analysis and other notes.

Data Analysis and Results

SPSS 14.0, AMOS 5.0 and other statistics software were used as the data analysis
instruments in the research. Questionnaire data were analyzed, and the relationship
between the variables was examined.

The basic data of samples

The 300 questionnaires in research were mainly released by mailing, and there were
185 feedbacks (165 return mails, 17 return faxes, and 3 emails). Excluding 23 invalid
questionnaires in which the data are not complete or all the checked answers are the
same, there are 162 valid questionnaires in total, that is to say, the valid return rate was
54%. Two possible reasons that the return rate can reach 50% are as follows: the
questionnaires are distributed by the people who are familiar with the foundation, and
here are phone calls reminding in advance.

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The follow-up basic data analyses of the respondent units in the research showed
that, most “establish time of foundation” are 6~10 years (54.3%), that with more than
15 years also occupies a quarter (25.3%), generally speaking, there is a direct proportion
trend between the time and the staff’s service length; most “foundation fund” are
NT$50-100 millions (56.2%), which means they are all large foundations; most “staff
number” are 5~10 (42.6%), and the next is less than 5 (35.8%), it means that the larger
the foundation, the more the staff; most “foundation type” are cultural and educational
(59.3%), and the next is social welfare and charity (20.4%), medical treatment and
hygiene (13.6%), while the least are environmental protection (5.6%) and others (1.1%).
The result is similar to the recent dynamic distribution of research results of “Himalayan
Research Development Foundation”. In addition, the average value and standard
deviation of the research are shown in Table 4.

Table 4 The reliability of the variables examined herein

Variables Items Avg. SD α CR AVE Reference


Technical Level (TL) 15 5.14 0.84 0.927 0.937 0.748
Advertisement (AD) 3 5.18 0.85 0.825 0.832 0.625
Sales promotion (AP) 3 5.13 0.81 0.876 0.867 0.686 Duncan and
Moriarty
Direct sales (DS) 3 5.08 0.83 0.878 0.865 0.682 (1998)
Public relations (PR) 3 5.22 0.89 0.871 0.861 0.673
Personnel expense (PE) 3 5.10 0.81 0.827 0.817 0.598
Process Control (PC) 15 4.93 0.85 0.882 0.934 0.739
Consistency (CO) 3 5.03 0.81 0.805 0.830 0.622
Interactivity(IN) 3 4.88 0.84 0.785 0.786 0.551 Duncan and
Moriarty
Objective(OB) 3 4.90 0.88 0.853 0.844 0.644 (1997)
Fundamental organization (FO) 3 5.00 0.90 0.869 0.859 0.672
Enterprise evaluation (EV) 3 4.84 0.82 0.846 0.863 0.678
Brand equity (BE) 12 5.04 0.90 0.933 0.873 0.634
Brand loyalty (BY) 3 5.00 0.87 0.899 0.895 0.739
Brand awareness (BA) 3 5.04 0.98 0.910 0.884 0.718 Aaker (1996)
Perceived Quality (BQ) 3 4.97 0.89 0.890 0.875 0.700
Brand association (BA) 3 5.16 0.86 0.855 0.864 0.680

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Reliability and validity analysis

In analyzing the reliability of the measurement instruments, this study applied the
Cronbach’s α coefficient to guide the measurement. The Cronbach’s α coefficient of
constructs “technical level”, performance of “process control” and “brand equity” are
respectively 0.927, 0.882 and 0.933 as Table 4 shows, all beyond 0.7 that Nunnally
(1978) suggested. All aspects fell into 3 items which indicate a good accordance
between the reliability of every constructed measurement instruments and theoretical
standards. In another word, a satisfactory consistency has been obtained (Cook,
Hepworth, Wall, & Warr, 1981).
In terms of reliability analysis of the measurement instruments, the questionnaire
taken in this study is theoretically grounded and is capable of development following
discussions of literatures. Meanwhile the content therein has acquired authentication of
NPO law, operation and marketing experts and has been revised by multiple times and
thus is expected to achieve good content validity.
In conducting the analysis, this study took the suggestions of Anderson and Gerbing
(1988) by proceeding in a way spanning two phases. At first, according to the
Certificated Factors Analysis (CFA) the congruence of the measurement model is
evaluated out to examine whether each variable conforms to convergent validity. Then
the analysis of cause-and-effect model follows. Some scholars suggested that many
indexes be considered in evaluating the congruence of the model (Qiu, 2003) whereas
Bagozzi and Yi (1988) proposed that the evaluation standard with GFI, NFI and CFI be
above 0.9 and RMSR below 0.05. As shown in the model’s congruence analysis result
of Table 5, all the variables herein conforms to the above standards, indicating
satisfactory convergent validity of all the constructs.

Table 5 Analysis of the model’s congruence


Indexes Standards TL PC BE Result
GFI >0.9 0.885 0.872 0.964 good
RMSR <0.05 0.060 0.069 0.030 good
NFI >0.9 0.889 0.874 0.973 good
CFI >0.9 0.936 0.926 0.995 good

16
Besides, this study examined the discriminating validity in the way suggested by
Gaski (1986). That any related coefficient in the matrix questionnaire geminates with
the Cronbach’s α coefficient and takes a value lower than it indicates a discriminating
validity between the two aspects. Table 6 shows the analysis result and indicates a good
discriminating validity among all the aspects herein. All the variables are positively
correlated and achieve a significance level (P<0.001).

Table 6 Matrix of the related coefficients of the aspects


Variables 1 2 3 4 5 6 7 8 9 10 11 12 13 14
1. AD (0.825)
2. AP 0.763* (0.876)

3. DS 0.722* 0.766* (0.878)

4. PR 0.703* 0.707* 0.741* (0.871)

5. PE 0.658* 0.722* 0.720* 0.684* (0.827)

6. CO 0.584* 0.568* 0.568* 0.506* 0.573* (0.805)

7. IN 0.582* 0.609* 0.563* 0.545* 0.487* 0.677* (0.785)

8. OB 0.596* 0.617* 0.617* 0.599* 0.617* 0.611* 0.603* (0.869)

9. FO 0.621* 0.650* 0.606* 0.589* 0.598* 0.546* 0.589* 0.757* (0.853)

10.EV 0.491* 0.467* 0.491* 0.451* 0.530* 0.572* 0.494* 0.541* 0.588* (0.846)

11.BY 0.473* 0.560* 0.592* 0.553* 0.657* 0.515* 0.467* 0.557* 0.612* 0.542* (0.899)

12.BA 0.527* 0.535* 0.587* 0.573* 0.639* 0.520* 0.425* 0.599* 0.613* 0.563* 0.787* (0.890)

13.BQ 0.555* 0.585* 0.610* 0.609* 0.664* 0.471* 0.457* 0.617* 0.644* 0.560* 0.758* 0.796* (0.855)

14.BA 0.494* 0.549* 0.574* 0.545* 0.668* 0.486* 0.384* 0.611* 0.581* 0.520* 0.777* 0.776* 0.792* (0.910)

* indicates P<0.001, and the value in the brackets is the reliability of the aspects.

Model Validation

Adequacy of the samples

Structural Equation Modeling analysis requires the sample number to be “above


50 after being deduced of the estimated parameter number in the model” (Bagozzi & Yi,
1988). The Maximum Likelihood Estimation (MLE) is employed in this study to help
analyze and the samples are expected to be above 100 and below 400 (Hair, Anderson,
Tatham, & Black, 1998). 162 Samples are involved in this study, meeting the
expectation and enabling the analysis of the structural equation.

Analysis of the structural model

The GFI, CFI, RMSR, RMSER, AGFI and NFI in the whole structural model

17
studied here were respectively 0.902, 0.975, 0.003, 0.062, 0.861 and 0.939. All except
AGFI indicated satisfactory congruence indexes which mean good congruence of the
model. This study aimed to examine the inter-construct relation in the study
construction. The empirical results are shown in Figure 2 and Table 7, and are to be
detailed in the following parts.
The empirical results in this study showed that IMC poses a significant positive
impact to both “technical level” and performance of “process control” and Hypothesis 1
is herewith supported. It is seen that in terms of IMC, better effects inside the NPO can
be obtained if the communication instruments of IMC are integrated more effectively.
This result was consistence with the argument of Shimp (1997) and Duncan and
Moriarty (1997). The significant positive impact of IMC “technical level” on the “brand
equity” in Hypothesis 2 thus receives support which attests to the help of integration of
IMC communication instruments in brand relation evaluation of NPO. Schultz (1998),
Duncan and Moriarty (1998) obtained similar results. Apart from those results, “process
control” has a significant impact on “brand equity”, supportive of Hypothesis 3 wherein
more effectively IMC proceeds, the higher the eternal values of brand relation, i.e., the
brand equity. Hypothesis 3 matches well with the study results as well (e.g., Percy, 1997;
Aaker, 1991).

PE PR DS AP AD

TL
0.327** BY

CO
0.861*** BA
BE
IN BQ

OB PC 0.510*** BA

FO

EV χ2=119.99, d.f.=74, GFI=0.902, RMSR=0.030, NFI=0.939,


CFI=0.975, RMSEA=0.062, AGFA=0.861. The factor loadings
are standardized. * Indicates p<0.05, ** p<0.01, and *** p<0.001

Figure 2 The structural model of technical factors, process


control performance and brand equity

18
Table 7 Results of Hypothesis Testing
Hypotheses Variable Relation Path-coefficient Testing Result
H1 TL → PC 0.861*** supported
H2 TL → BE 0.327** supported
H3 PC → BE 0.510*** supported
*indicates p<0.05, ** p<0.01 and *** p<0.001

This study focused on further analysis of the impacts of each variable on brand
equity and the impacts fall into direct and indirect categories which add up to the total
effects. As shown in Table 8, the direct impact of IMC “technical level” on “process
control” is 0.861, indicating that execution of IMC activities holds much importance for
NPO’s management for “Enterprise Foundation” attaches much importance to the
effects of integration of communication instruments on internal operation. Besides, this
study conducted related discussion on the impacts of “brand equity”. The total impacts
of the IMC “technical level” on “brand equity” amount to 0.766 (wherein the direct
impact is 0.327, the indirect impact 0.439), indicating the agreement of “Enterprise
Foundation” with the fact that communication instruments create brand values for NPO
only via internal integration of the organization. However, the direct impact of “process
control” performance upon “brand equity” is 0.510, indicating that the internal IMC
integration conduces to the brand construction but only bears a lower impact compared
with the former one. One thing worth mentioning is that the performance of “process
control” holds considerable impacts.

Table 8 Impacts of Variables


Independent Dependent Direct Indirect Total
variable variable impact impact impact
Performance of
Technical level 0.861 - 0.861
process control
Technical level 0.327 0.439 0.766
Brand equity
Process control 0.510 - 0.510

19
Conclusions and Suggestions

With the change of the cultural phenomena in the modern society, the global
market competition turning fiercer, and traditional marketing model crippling more and
more, companies frequent themselves in charity activities and those who have done this
enjoy steadily growing enterprise fame. Engaging enterprise investment, NPOs certainly
become the spokesperson when enterprises participate in social activities. The important
resource of “enterprise found” is provided by parent enterprise. Nevertheless, NPOs
regard contributors, volunteers and beneficiaries as clients, and take the perfection of
social ethics and responsibility as their missions and in which way distinguish
themselves much from their parent enterprise. Therefore, how to develop organization
beliefs to achieve the integrated effects in operation challenges the executives at present.
The researcher evaluates operation performance of NPOs through IMC model,
investigates the domestic NPOs to familiarize with the impacts of IMC activities and
thus provides the following pragmatic advice based upon study results.

Discussion and Management Implication

To integrate the impacts of marketing and communication

The empirical results of the study proves that NPOs with long cooperation with
enterprises “technique factors” and “process control” performance respectively have
positive impacts on “brand equity” in their IMC activities. The evaluation procedures
fall into two parts, external and internal. One is the integrated technical effect of
external communication instruments including advertisement, sales promotion, direct
marketing, public relations, personnel sales and so on. The other is IMC process control
performance operated within the organization, including consistency, interactivity,
objective, fundamental organization, and enterprise planning evaluation and so on. The
final purpose is to create concrete brand equity which includes brand loyalty, brand
fame, perceived quality and brand association et cetera. The result shows that the IMC
model constructed by this study could evaluate the impacts of NPOs’ brand operation.
Early scholars emphasized NPOs’ competency in improving performance through
enlarging marketing and promoting organization efficiency to achieve aims and thus to
correspond with market management in existing circumstances (Kotler & Levy, 1969).

20
The chief executives of NPOs should think about how to promote brand value of the
organization by drawing on the internationally known enterprises who all attach much
importance to engagement in commonweal activities. Apart from global credits gained,
this engagement also helps to bring about an international fashion. In recent years the
domestic NPOs develop rapidly and Corporate Citizens are highly exclaimed.
“Enterprise Foundation” takes part in commonweal activities aggressively, cooperates
with media’s frequent exposure, and thus creates positive effects for the construction of
enterprise image and brand value. IMC seems to be definitely the best means for
controlling brand relation. Therefore, in accordance with the set missions, the chief
executives of NPOs could use this strategy, starting from social charity, cultural
education, environment protection or health and medical care while integrating multiple
communication channels, to enhance the brand fame. All these could construct
subjective perception of commonweal image, and make the related interest holders
tinged with a touch of Corporate Citizen and thus distinguish itself from its competitors.
The operation of NPOs in the future will be differentiated. In the case of social
resource limitation, the chief executives of NPOs can interact with other foundations
and create the alliance opportunities (McCort, 1994). Either sharing or integrating
resources or taking alliance will contribute to promoting its own competitive strength.
On the other hand, for the NPOs which have long-term cooperation with enterprises,
their involvement in commonweal activities requires more exposure, multiple media,
low cost, and high return. Hence they can enhance the integrated marketing competence
of external communication instruments by participating activities targeted at special
objects, which might include alliance with international charity or foundations. And this
will conduce to achieving the special objectives designated by the organization (e.g.,
Duncan, 1993; Duncan & Moriarty, 1997).

To integrate the Relation between Marketing Dissemination and Brand equity

Examined as a whole, this study proves that IMC “technique factors” and
performance of “process control” pose much importance on “brand equity”. And further
discussion finds out that the “technical level” carry higher impact on “brand equity” via
the channel of “process control” performance than “process control” does, which
evidences indirectly the “process control” performance as an important media variable

21
effecting the variables ahead and behind it. This means that the IMC technical level do
pose impacts on NPO’s process control and brand equity. Though the integration of
communication instruments is highly valued, the internal process control of the
organization is still required. The outside-in integration of IMC serves as one key in
creating brand equity (Shimp, 1997) as well as one important base to run a NPO.
Besides, taking into consideration the changes of the social conditions of domestic
NPOs, special efforts should be made inside the organization in implementing IMC.

Research limitations and suggestions

The limitations of this study cover the following factors mainly: 1) samples
surveyed within this study mainly consist of the “Enterprise Foundation” of domestic
NPOs and thus the study result might be not able to represent the NPOs in other areas.
In another words, external validity is limited; 2) the cross-section approach taken within
the study, the fact that long-term watch of the following operation and development of
the NPOs and the error in sampling, such as low and high season, up and downs of
parent company, and occurrence of commonweal activities as well as immaturity in
operation, may add up to data insufficiency in a cross-section survey; 3) the testing
analysis of the model will become more credible if the future samples can be increased
above 200.
The following are proposed by the author for the future researchers: 1) survey of
NPOs in different areas can be an option and cross-cultural analysis can be doable
(Schaffer & Riordan, 2003); 2) the study of the IMC activities aims to provide
incentives for modern entrepreneurs to run NPOs and evaluate the brand equity
generated by a model medley of external technical level and internal process control
performance. Relationship marketing engaging commonweal elements (Verhoef, 2003)
is advised in future studies, for example, to take alliance with world-famous NPOs or
co-hold charity activities or commonweal spokesperson design; 3) the effects of IMC
activities is to be amplified via long-term observations; 4) the operational status and
characteristics of NPOs might be incorporated into future studies and the initiatives and
aims of NPOs of different characteristics can be discussed (Salamon, 1994); 5), the IMC
degree applied within the study may not include the complicated factors posing impact
on NPO’s brand. Those not included are service quality and relationship marketing etc.,

22
or the “related interest holder” to which NPO pays more attention (Pickton & Hartley,
1998). Future studies may focus their efforts in studying the client factors affecting
NPO, which include attitudes of the donator, beneficiary and volunteer.

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