Marketing for New Ventures

Definition of marketing by the American Marketing Association:

an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders.

Marketing practices vary depending on the type of company and the products and services it sells.

Entrepreneurial Marketing

Why Marketing is Critical for Entrepreneurs

Because no venture can become established and grow without a customer market;

Because it is difficult and expensive to bring new products and services to market;

To differentiate product or service to customers makes the company distinctive and valuable;

Companies must be able to switch marketing gears quickly to attract new customer segments.

Entrepreneurial Marketing

Entrepreneurs Face Unique Marketing Challenges

limited resources in financial, managerial, and time;

limited market information;

decision-making inclined to be muddled by personal biases and beliefs;

poorly established relations with multiple audiences.

Entrepreneurial Marketing

Acquiring Market InformationMarketing research could cover information such as:

-Product attributes important to customers;-Possibility of customers’ buying willingness by marketing behaviors;-Market trend;-The location of the customers’ preference.

Entrepreneurial Marketing

Acquiring Market InformationTwo basic types of market data

•Primary data•Data you collect yourself•Limitations of primary data

•Secondary data•Economical and usually used to collect baseline information

Entrepreneurial Marketing

Marketing Strategy for Entrepreneurs

A company’s marketing strategy must closely align with its resources and capabilities;

Segmentation, targeting, and positioning are key marketing dimensions that set the strategic framework.

Entrepreneurial Marketing

Entrepreneurial MarketingMarketing Strategy for Entrepreneurs/the Marketing Mix

Product Product StrategyStrategy

placeplace

promotiopromotionn

Pricing StrategyPricing Strategy

Entrepreneurial MarketingMarketing Skills for Managing Growth

Understanding and Listening to the Customer

Building brand awareness and building brand equity

Entrepreneurial Marketing

Disadvantages to existing companies entering new markets• Core rigidities: companies are only good at

things they are used to doing• Tyranny of the current market: companies

listen to their customers, who are not a source of ideas for new products in new markets

• Use myopia: customers of existing firms see needs or solutions very narrowly (i.e., not the needs of others)

Disadvantages to existing companies entering new markets• Because large companies have these

disadvantages with new markets, new ventures should focus on new markets instead of established ones

Market dynamics

• Entrepreneurs are more successful in large and growing markets– Large markets amortize the fixed costs of

getting started over a larger number of units– It’s easier to sell into rapidly growing markets

Market dynamics

• The performance of product adoption follows an S shape– Initially, need a large amount of effort to

achieve small improvements in product performance

– Then performance improvements accelerate and small efforts can lead to large improvements

– Later, must make large efforts to achieve small improvements

5 stages of technological adoption

Source: http://www.icsb.org/wiki/index.php?title=S_curve

5 stages of technological maturity1. Bleeding edge - shows high potential but hasn't

demonstrated its value or generated consensus.2. Leading edge - proven in marketplace but still new

enough that it may be difficult to find knowledgeable personnel to implement or support it.

3. State of the art - when everyone agrees that a particular technology is the right solution.

4. Dated - still useful, sometimes implemented; replacement leading edge is readily available.

5. Obsolete - superseded by state-of-the-art technology, maintained but no longer implemented by the specific firm.

Market dynamics

• Established firms rarely compete with entrepreneurs to develop new products on the early part of the S curve– The new product usually begins with inferior

performance that hurts the company’s overall performance

– Managers of established companies believe they can always improve the performance of their existing products to compete with new products

Entrepreneurial MarketingGuerilla Marketing

Guerilla marketing acts as non-traditional, grassroots, and captivating – that gain consumers’ attention and build awareness of the company.

Word-of-Mouth marketing, Buzz marketing, and Viral Marketing.

Other issues in Guerrilla Marketing.

Entrepreneurial Marketing

Guerrilla marketing

Selections from Francesco Mugnai’s “

Best Guerilla Marketing Ideas”

Use a different perspective

Useful plant life

Fitness

Good use of a parking garage

New type of golf bag

Improving men’s aim

Nikon thinks you rock

Shopping cart with

a message

Trueblood advertisin

g

Barbeque breakdown

Kit Kat

Guerrilla marketing from an unexpected source

http://www.youtube.com/watch?v=qMOuF8oskRU