Chapter 6 - Entrepreneurial marketing. Even if you are launching a small business, you’ll quickly find that your potential to grow beyond a self-employment business requires a team, whether it’s your spouse for moral support or a trusted advisor who mentors you through the growing pains you’ll inevitably encounter. This chapter will look at the issues entrepreneurs face as they build their initial team and lead this group through the challenging launch process.
ENTREPRENEURI AL MARKETI NG Chapt e r Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 © Marketing Defined… An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationship s in ways that benefit the organization and its stakehold Marketing practices vary depending on the type of company and ers the products and services it sells - American Marketing Association Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Marketing is Critical Establishes a customer market q Differentiates product or service to customers q Gains customer acceptance q Cultivates loyalty q Incites trial and usage q Entrepreneurial companies must be able to switch marketing gears quickly to attract new customer segments Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Entrepreneurs Face Unique Marketing Challenges q Limited by: q Financial and managerial resources q Time q Market information Muddling decision-making with personal biases q Marketing at an early stage, to multiple audiences q Marketing allows entrepreneurs to leverage scarce resources through innovative business approaches Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Improve Decision Making through Marketing Research q Four key questions: Which product attributes are important to customers? q How product design, pricing and communication influence customer willingness to buy? q Where customers buy this kind of product? q Which market trends are likely to prevail in the future? q q Two main types: Secondary – from already published sources q More economical in terms of time & money q Primary – collected directly for specific purposes q Focus groups, surveys, & experiments Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, q © 2017© Understand the Customer Choice Process Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Marketing Strategy: Aligning Ends, Ways & Means MEANS ENDS Strategic Variables Marketing Strategy Gap or Risk WAYS q An entrepreneur’s resources & capabilities (means), and objectives (ends) differ from those of established companies, therefore they must employ different strategies (ways) Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Be Attentive to Consumer Adoption Behavior Product Diffusion Curve q q Particularly applies to innovative products Adoption rate can vary (i.e slower for complex products) Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Segmentation, Targeting, and Positioning Frame Strategic ‘Ends’ q q q Detect customer segments in your market Select profitable segments to target Position your offering in the minds of your target segments Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Segmentation, Targeting, and Positioning Frame Strategic ‘Ends’ q q q Detect customer segments in your market Select profitable segments to target Position your offering in the minds of your target segments Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 10 Segmentation, Targeting, and Positioning Frame Strategic ‘Ends’ q q q Detect customer segments in your market Select profitable segments to target Position your offering in the minds of your target segments Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 11 Marketing Mix (The 4 P’s) Ways you employ Means to achieve Ends q q Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© Each is derived from your choice of target segment & positioning All variables are interdependent…a change to one, may require a change to the others 12 Marketing Mix (The 4 P’s) Product Promotion Price Place Product Strategy • Core Product – The essential good or service • Augmented Product – Attributes associated w/ Core Product Marketing Communications Strategy • Communications mix – advertising, sales promotion, public relations, personal selling, direct marketing • “Push” Marketing – Promotions, trade shows, personal selling • “Pull” Marketing – Generate end-user demand Pricing Strategy • Consider financials, such as costs, competitors pricing, perceived value • Price skimming – higher margins, limited marketshare • Penetration pricing – lower margins, higher marketDistribution Strategy share • Channels are difficult to set up initially • Channel Coverage (Intensive, Selective, Exclusive) Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 13 Entrepreneurs & Guerilla Marketing q Techniques are Non-traditional, Grassroots, Captivating q “Word-of-mouth”, by giving people a reason to promote q “Buzz”, with high-profile personalities & media q “Viral”, via shared – often entertaining – content Fewer resources required means your efforts yield out-sized impact Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 14 Skills for Managing Growth q Understanding and listening to the customer • Obtain information to understand customer behavior and expectations related to the 4P’s q Building the brand • Awareness – ability to recall brand • Equity – effect of brand awareness on customer Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 15 Recap q Have a solid, consistent strategy q q Marketing is a delicate balance of art and science Adapt your tactics as conditions change (scale) Focus on the fundamentals Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© SCIENCE ART 16 ... ers the products and services it sells - American Marketing Association Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York:... Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, q © 2017© Understand the Customer Choice Process Bygrave & Zacharakis,. .. Bygrave & Zacharakis, Entrepreneurship, New York: Wiley, 2014 Zacharakis, Bygrave & Corbett, Entrepreneurship, New York: Wiley, © 2017© 13 Entrepreneurs & Guerilla Marketing q Techniques are Non-traditional,