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Research Article

Marketing Competition Analysis of Non-Profit Organizations

Kim, Yongjun

Published: January 1993 · Vol. 22, No. 2 · pp. 363-392
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Abstract

This study investigates the effects of competition on the marketing mix decisions of nonprofit organizations. In the case of for-profit firms, it is well known that a duopoly market structure is more desirable for consumer welfare than a monopoly—that is, competition lowers prices and increases total output. When competition is introduced to nonprofit organizations, does the same logic apply? Comparing with for-profit firms, this study obtained the following two results. First, nonprofit organizations produce more output and advertising than for-profit firms while setting lower prices. Second, in the case of nonprofit organizations under duopoly compared to monopoly, while prices decrease and advertising volume decreases, total output also decreases. This demonstrates that when competition is introduced into nonprofit organization markets, unlike the case of for-profit firms, consumer welfare may not always be improved.