Chapter 10

2. Chapter 10 Marketing for entrepreneurial ventures

3. Objectives • To appreciate the context of entrepreneurial marketing as distinct to traditional marketing • To examine the entrepreneurial marketing concept – philosophy and consumer orientation • To establish the areas vital to a marketing plan • To establish the concept and need for customer segmentation • To identify the key elements of an effective market survey • To outline the processes and entrepreneurial tactics in marketing research • To examine marketing on the Internet and the emerging use of social media and mobile marketing for entrepreneurial firms • To differentiate green marketing from traditional marketing practice • To discuss the key features of a pricing strategy and how customisation influences the perception of price by the customer

4. But first ? • Are there any companies that DON’T market their products or services? • Are there companies that use only the Yellow Pages? • Any companies that have turned off their websites? • Is there any reason to market your venture when business is already good?

5. Marketing is essential for entrepreneurs • Marketing is as critical to new businesses as it is for established ones. • Start-ups must be intimately in touch with their customers and with their needs.

6. What is a ‘market’ to an entrepreneur? • A market is a group of potential customers who have purchasing power and unsatisfied needs. • A new venture will survive only if a market exists for its product or service. • (And if it can meet the market’s need at a profit.) Poster from US Works Progress Administration, circa 1937.

7. What is entrepreneurial marketing? • Innovative, risk-oriented and proactive. • Achieve durable competitive advantage • Traditional marketing is ‘cost driven’; entrepreneurial marketing is ‘revenue driven’. • Many new strategies, like co-creating a product with the customer

8. What is the difference between traditional and entrepreneurial marketing? Traditional marketing Entrepreneurial marketing Concentrating on leveraging deep customer knowledge into sales ‘Revenue driven’ Marketing passion, zeal, persistence and creativity Creative use of the resources of others Four C’s: Co-creation, Communities, Customisation and Choice • Concentrating on brand recognition or market share • ‘Cost driven’ • Marketing as objective, dispassionate science • Efficient use of existing resources • Four P’s: Product, Price, Promotion, Place

10. Components of effective marketing

11. Component: Marketing philosophy • Which of the three marketing philosophies should you choose? • Any one can be successful; consumer-driven philosophy is the most successful. • Factors that influence your choice: • Competitive pressure • Entrepreneur’s background • Short-term focus

12. Component: Marketing plan • Your marketing philosophy is reflected in your marketing plan. • Elements of your marketing plan: • current marketing research: who the customers are, what they want, how they buy • sales research:promoting and distributing products according to marketing research findings • you need a marketing information system for collecting, screening, analysing, information on which to base plans, decisions and actions • sales forecasting:coordinating personal judgement with reliable market information • evaluation: identifying and assessing deviations from marketing plans.

13. Component: Guerrilla marketing • In seven sentences! • Purpose of your marketing. Make it quantifiable. • What are the characteristics of the business that make it uniquely positioned to offer value to the public? For complete details, see Entrepreneurship in Practice, p. 337 • Specifying exactly who will be exposed to the marketing campaign. • What marketing weapons will you use? • What is the company’s market niche? • Establish the identity of your company. • What percentage of projected gross sales are you willing to earmark as your marketing budget? Michael Dolan, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/, cropped from original

14. Component: Market segmentation • ‘The process of identifying a specific set of characteristics that differentiate one group of consumers from the rest’ • A total market is often made up of sub-markets (called segments) • Example: wine-related lifestyle • ritual-oriented conspicuous wine enthusiasts • purposeful inconspicuous premium wine drinkers • fashion/image-oriented wine drinkers • basic wine drinkers • enjoyment-oriented social wine drinkers.

15. Component: Marketing segmentation ? • Example: What segment of social media behavior do you personally fit in? • Are you a commenter or a climber? • Can you give other examples of market segmentation? • What do you suppose this artist at theconversationprismsells? theconversationprism Brian Solis, licensed under CC Attribution 2.0 creativecommons.org/licenses/by/2.0/, cropped from original

16. Component: Segmentation variables • Demographics • age group, gender, education level, ethnicity, income, occupation, social class, marital status • Geographics • location (e.g. national, regional, urban/suburban/rural, international), climate • Current purchasing situation • brands used, purchase frequency, current suppliers • Purchase ready • possess necessary equipment, property, knowledge and skill sets • Local environment • cultural, political, legal • Benefits sought • price, overall value, specific feature, ease-of-use • Product usage • how used, situation when used • Purchase conditions • time of day/month/year when purchased, credit terms, trade-in option • Characteristics of individual buyer • purchase experience, how purchase made, influencers on purchase decision • Psychographics • personality, attitudes and lifestyle combined with demographics

17. Component: Consumer behaviour • Defined by the types and patterns of consumer characteristics • Especially personal and psychological characteristics • Characteristics are linked to buying trends

18. Where were you in the adoption lifecycle? ? Craig Chelius, licensed under CC Attribution 3.0 Unported, creativecommons.org/licenses/by/3.0/deed.en

20. Component: Marketing research

21. Component: Purpose of research • Research purpose and objectives • Where do potential customers go to purchase your good/service? • Why do they choose to go there? • What is the size of the market? How much of it can you capture? • How does the business compare with competitors? • What impact does the business’ promotion have on customers? • What types of products or services are desired by potential customers?

22. Component: Secondary research • Information that has been compiled by others. • The entrepreneur should exhaust all the available sources of secondary data. • Several problems with using secondary data: • Data may be outdated and, therefore, less useful. • Units of measure may not fit the current problem. • Some sources of secondary data are less valid than others.

23. Component: Primary research • Observational methods avoid contact with respondents. • Survey methods contact respondents in varying degrees: • Develop an information-gathering instrument (questionnaire) See Table 10.5: Comparison of major survey research techniques. PSSP, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/

24. Comparison of major survey techniques

25. Component: Primary research • Experimentation – model your marketing messages and try them out. • Consumer ‘research panels’ manipulate one variable –for example, taste –and attempt to hold other variables constant and observe changes in preference. • Marketers can model marketing messages accurately and efficiently – and they can adjust their messages accordingly. Allagash Brewing, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/ cropped from original

26. Component: Interpretation • A lot of data has no meaning until it has been examined, and possibly depicted graphically. • Tables, charts and other graphic methods are useful. • Descriptive statistics – mean, mode and median – are useful too.

27. Typical marketing research questions – sales • Sales • Do you know all you need to know about your competitors’ sales performance by type of product and territory? • Do you know which accounts are profitable and how to recognise a potentially profitable one? • Is your sales power deployed where it can do the most good, maximising your investment in selling costs? • Distribution • If you are considering introducing a new product or line of products, do you know all you should about distributors’ and dealers’ attitudes towards it? • Are your distributors’ and dealers’ salespeople saying the right things about your products or services? • Has your distribution pattern changed along with the geographic shifts of your markets?

28. Typical marketing research questions – sales • Markets • Do you know about the differences in buying habits and tastes by territory and kind of product? • Do you have as much information as you need on brand or manufacturer loyalty and repeat purchasing? • Can you now plot, from period to period, your market share of sales by products? • Advertising • Is your advertising reaching the right people? • Do you know how effective your advertising is in comparison to that of your competitors? • Is your budget allocated appropriately for greater profit? • Products • Do you have a reliable quantitative method for testing market acceptability? • Do you have a reliable method for testing the effect on sales of new or changed packaging? • Do you know whether adding higher or lower quality levels would make new profitable markets for your products?

29. ? Internet marketing • How do you get ‘marketed to’ on the Internet? • What methods do you prefer? • What do you hate? Jason Howie, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/ cropped from original

30. Internet marketing • Increase presence and brand equity in the marketplace • Cultivate new customers around the world (be prepared for global customers) • Improve customer service by allowing customers to serve themselves • Gather information about customers Marketing mix: actions a marketer can take to promote brand or product. Usually referred as the 4Ps, or Price, Product, Promotion and Place, they could today be replaced with the 4Cs: co-creation, communities, customisation and choice. See Slide 8.

31. Internet segmentation and customer behaviour • Customers have different experiences at different times. • On the Internet, people can construct their own occasions and return to a given website repeatedly, constructing different interactions each time. • This allows the clever Internet-based entrepreneur to customise visitor experiences by performing usage-based market segmentation.

32. ? What kind of smartphoneuser are you? • Talkers: Use their phone mainly for verbal conversations. Not much social media use. • Occasional: Make calls, play games and check the weather. Most features go unused. Reachable through their PCs and through print ads. • Browsers: The largest group of smartphone owners are still learning about all the things they can do with their phone. Rarely use phone to purchase. 世書 名付, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/ cropped from original • Pragmatist: Mobile professionals use their phone to balance their work and personal lives. • Tribal:Hyperconnected. Into Pinterest, Instagram and Flickr. Mobile-savvy, love their phone. Prefer direct messaging. • Prodigy: Constantly connected, mobile-centric, tech trendsetters. True social media influencers. Group of customers united by behavior patterns, goals, skills, attitudes, and a few fictional details the make the persona a realistic character.

33. Relationship marketing

34. Creates something of value that attracts attention and becomes viral in nature. • Enables customers to promote a message themselves. • Encourages user participation and dialogue. • a mkhmarketing mkhmarketing.wordpress.com, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/

35. Traditional marketing Social media marketing Emphasises audience contribution and relinquishes control over large parts of the content. Important to be completely honest. ‘Two-way communication’ to an audience that is interested in responding. • Seeks to control the content seen by the audience and attempts to dominate the territory by excluding their competitors’ messages. • Consumers expect some exaggeration • ‘One-way’ from the firm to the customers. Key distinctions of social media marketing

36. How to build asocial media marketing plan • a • Listen • Identify • Appraise • Implement • Collaborate • Contribute • Convert • Monitor SEOPlanter, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/ Bill Rice, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/ cropped from original

37. Mobile social media marketing SocialMediaVIDEOmarketing, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/ cropped from original

38. Green entrepreneurial marketing • Consumers – particularly the youngest ones – pay attention not only to price and quality but also to social and environmental values, as witnessed in the remarkable growth of the global market for organic and environmentally friendly products. • Recyclability, reusability, biodegradableness and positive health effects are definitely in.

39. What is greenwashing? • Many green consumers are increasingly savvy about greenwashing. • Consumers prefer to choose a green product all other things being equal. • But those ‘other things’ just don’t add up. Mike Mozart, licensed under CC Attribution 2.0, creativecommons.org/licenses/by/2.0/ cropped from original Twelve ounces of phosphate-tinged, caffeine-impregnated, caramel-flavoured sugar water. See ‘Natural Capital in a can of cola’, Chapter 14, p. 527.

40. Consumers not yet reached the tipping point? • Consumers have not reached the ‘tipping point’. • Not willing to compromise on convenience, price and performance. • Two market segments: Ecological fatalism & Ecological concern.

41. Key concepts ? (Close your books.) • What are the main learnings from this chapter?