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Kathleen R. Allen LAUNCHING NEW VENTURES – AN ENTREPRENEURIAL APPROACH, 7E –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Developing a Startup Marketing Plan Chapter 14 –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter Objectives Discuss the role of the product adoption/diffusion curve for marketing strategy Explain how to create an effective marketing plan Discuss the forms of advertising and promotion that entrepreneurs can tap Describe the role of publicity in a marketing strategy –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Chapter Objectives Explain how entrepreneurs can employ social media to their advantage Discuss the role of personal selling in a marketing strategy –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Developing a Startup Marketing Plan Marketing includes all the strategies, tactics, and techniques used to raise customer awareness; to promote a brand, product, service of business; and to build and manage long-term customer relationships Traditionally, marketing has been described in terms of the “5 Ps” – people, product, price, place and promotion –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Developing a Startup Marketing Plan Given developing technology, consumer’s expectations will rise in 4 ways: ◦ Consumers will want to interact with anyone, anytime, and anywhere ◦ They will want to be able to do new things with new information in new ways ◦ They will expect everything to be targeted to their precise needs ◦ They want this all to happen easily with no learning curve –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Product Adoption and the Customer Journey 14.1 Understanding the product life cycle and how customers adopt new products is critical to any marketing strategy To the extent that you can predict the points of takeoff (optimism) and slowdown (pessimism) n the cycle, you can better manage demand The adoption/diffusion curve describes how customers adopt new products –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Figure 14.1- New Product Adoption/Diffusion Curve –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Product Adoption and the Customer Journey 14.1 For technology products, the “chasm” appears (Figure 14.2) –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Product Adoption and the Customer Journey 14.1 Also, you must identify the points at which you interact with your customers from the moment you create awareness for your product or service to the end of the life cycle for that product or service Table 14.1 shows those steps, some of which are essential, while others are optional –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Table 14.1- Components of a Customer Journey Map –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.2 The Marketing Plan The marketing plan for a startup is a living guide to how the company plans to build customer relations over its life in order to fulfill the company’s mission statement ◦ The original plan will contain a strategy for introducing the company and its products ◦ A later plan may be used to launch new products or to grow the business One problem is that marketing plans are not followed long enough to earn results –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.2a Creating Customer Value First, define the bridge between strategy and execution ◦ Message, differentiation tactics, channel strategies, performance goals ◦ Do not choose the same approach for all customers Identify a niche you can dominate ◦ Usually a segment of the market not being served ◦ Create value by achieving the customer’s goals and purposes in use situations –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.2b Setting Market Goals Consider the marketing options; talk to other business owners, customers, suppliers ◦ Think like the customer; why would a customer enter the store? Buy? ◦ Rank the top 10 options, then set sales and marketing goals that meet the SMART rule: Sensible Measurable Achievable Realistic Time specific –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.2b Setting Market Goals Many experienced marketers suggest condensing all the ideas about marketing strategy into a single paragraph which includes ◦ ◦ ◦ ◦ ◦ ◦ The purpose of the marketing plan The benefits of the product/service The target market and the market niche The marketing tactics to be used The company’s convictions and identity The percentage of sales that the marketing budget will represent –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.2c Brand Strategy A brand is a “name, term, design, symbol, or other feature that identifies one seller’s good or service as distinct” from other sellers ◦ Distinguished from a brand image, which is how the customer perceives the brand Brand strategy is a set of decisions about the brand’s positioning in the marketplace Building brand equity requires that customers form an emotional attachment to the brand –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.2d Assessing Effectiveness Measuring the effectiveness of marketing efforts is critical to avoid wasting resources: ◦ Matching sales forecasts to specific marketing tactics and assigning a person to measure the outcome ◦ Ask customers how they heard about your company or product/service Figure 14.3 provides some key performance indicators –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Figure 14.3- Some Marketing Metrics for Entrepreneurs –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.2e Advertising and Promotion These are used to create awareness for a company’s products and services, and to influence customers to buy ◦ Not interchangeable terms, as they have different objectives ◦ Advertising focuses on non-price benefits, and targets end-users; a pull strategy ◦ Promotion tends to be more price- or incentivefocused, and is considered a push strategy –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Table 14.2Push or Pull Strategy? –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.3 Entrepreneurial Market Strategies Entrepreneurs approach marketing differently from a traditional marketer Entrepreneurs often mimic what big firms do, but do it for less money in more creative ways and for a shorter period of time There are many ways to promote a company and its products and services effectively –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.3a Traditional Advertising This is a pull strategy consisting of print and broadcast media Table 14.3 presents some traditional print and broadcast media options available to entrepreneurs with hints for how to use them most effectively Entrepreneurs tend to shy away from traditional media because its expensive and may not reached their target audience –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Table 14.3- Traditional Media Comparison Chart –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Table 14.3- Traditional Media Comparison Chart –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.3b Publicity and Referrals Publicity and world-of-mouth referrals are two of the most effective marketing tools because they don’t cost the company money What they require is a compelling story that will attract attention If your product is newsworthy, contact newspapers, magazines or online reporters, editors and bloggers Always good to get to know people in the media on a first name basis –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.3b Publicity and Referrals Constructing an Effective Press Release ◦ An effective news release should contain the date, the name of the person to contact for more information, and a phone number; the release date, an appropriate, descriptive headline…the who, what, where, when and why at the very beginning, a photo, if appropriate, and note explaining briefly why the release was sent Getting Customer Referrals ◦ Referred customers generate higher profit margins, and are more likely to stay –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. When It Makes Sense to Give It Away 14.3c Giving something for nothing makes sense in an environment where its hard to get the customer’s attention; consider giving: ◦ Information, consulting or samples ◦ When the cost of each additional item is low and margins are high ◦ When customers need to try the product ◦ Or when samples can be offered at a large event –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Internet Marketing and Social Media 14.3d As of 2013, online ad revenues exceeded broadcast television ◦ Traditional media boundaries are disappearing ◦ Information erupting from a multitude of sources ◦ The competitive advantage of Internet marketing disappears; anyone can produce quality ads ◦ Any marketing strategy should be anticipated, personal and relevant Potential customers don’t want to be surprised by marketing tactics –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Internet Marketing and Social Media 14.3d Social Media ◦ Firms that will most benefit from social media: Knowledge workers comprise most of the company’s employees The company relies on its brand and how customers view the company The company’s primary goal is a great reputation and consumer trust The company distributes digital products or services The company provides experiential or inspirational products and services –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Figure 14.4- Benefits of Social Technologies for Business –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Table 14.4- Major Types of Social Media Applications –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Internet Marketing and Social Media 14.3d Social media tools have taken viral marketing to a new level; each has a specific purpose: ◦ ◦ ◦ ◦ ◦ Blogs, Twitter, email & e-newsletters Podcasts and vodcasts RSS Readers (Really Simple Syndication) Wikis Facebook, Pinterest, and YouTube –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Internet Marketing and Social Media 14.3d To create a viral strategy, consider: ◦ Provide free products and services ◦ Make it easy to pass on the message ◦ Make sure that your mail server can handle the traffic ◦ Take advantage of existing social networks ◦ Use other people’s websites –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Internet Marketing and Social Media 14.3d Social Media Metrics ◦ ◦ ◦ ◦ 1. Conversation rate 2. Amplification rate 3. Applause rate 4. Economic value Search engine marketing ◦ ◦ ◦ ◦ Conversion rate Cost-per-action or Cost-per-click Cost-per impression Pay per lead –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.4 Personal Selling Traditional selling techniques don’t always meet the needs of today’s customers A business distinguishes itself in the marketplace by identifying and meeting specific customer needs Requires that everyone in the company become service-oriented –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.4a Improving Personal Selling Skills Learn what customers want from the sale and give that to them: ◦ At the first meeting with the customer, gather as much information as possible about the customer’s needs ◦ Position your firm as a solution provider ◦ If the customer declines, stay composed, and ask why ◦ As a final touch, invite the prospect to contact two existing customers and ask them about their experience working with you –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Selling at Trade Shows and Exhibits 14.4b For many industries, trade shows, fairs and exhibits are a primary way to expose their products and do some personal selling Attending trade shows is an effective way to find out who your competitors are and what marketing techniques they are using ◦ Visit several trade shows before doing one ◦ Find out what works and what doesn’t ◦ Have knowledgeable, personable people in the booth –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.5 Managing Customer Relations Customer Relationship management (CRM) is a combination of technology, training and business strategy that results in a system for gathering and using information on current and prospective customers, to increase sales ◦ Helps you build a relationship with customers ◦ If there’s a problem a customer with a relationship won’t automatically seek out a competitor –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Identifying and Rewarding Lifetime Customer Value 14.5a Not uncommon for a firm to learn that 24% of its customers account for 95% of its revenues ◦ Must keep these customers happy ◦ To grow, a firm needs these customers to talk about their experience with others, who might then become new customers ◦ Although the intention to refer the firm to others may be high, it is not the same as those who actually refer –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14.6a Complaint Marketing A dissatisfied customer will probably tell at least 9 other people about the problem he or she had with your company ◦ And those 9 will tell others Complaints should be viewed as opportunities for continual improvement ◦ Make it easy for a customer to register a complaint and carry on a dialogue with a human who listens and attempts to understand ◦ Voice-mail and online systems make it worse –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. New Venture Action Plan Determine your business’s compelling story Analyze your marketing options and rank them Write a clear, concise, one-paragraph statement of the marketing plan Develop an advertising, publicity, and promotion strategy incorporating social media –© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.