Download AN ENTREPRENEURIAL APPROACH, 7e

Kathleen R. Allen
LAUNCHING NEW
VENTURES – AN
ENTREPRENEURIAL
APPROACH, 7E
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distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Developing a
Startup Marketing Plan
Chapter 14
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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

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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
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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

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service or otherwise on a password-protected website for classroom use.
Figure 14.1- New Product
Adoption/Diffusion Curve
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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)
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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

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service or otherwise on a password-protected website for classroom use.
Table 14.1- Components of a
Customer Journey Map
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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
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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
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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
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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
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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

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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
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service or otherwise on a password-protected website for classroom use.
Figure 14.3- Some Marketing
Metrics for Entrepreneurs
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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
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service or otherwise on a password-protected website for classroom use.
Table 14.2Push or Pull Strategy?
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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

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service or otherwise on a password-protected website for classroom use.
Table 14.3- Traditional Media
Comparison Chart
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service or otherwise on a password-protected website for classroom use.
Table 14.3- Traditional Media
Comparison Chart
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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

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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
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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
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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
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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
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service or otherwise on a password-protected website for classroom use.
Figure 14.4- Benefits of Social
Technologies for Business
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service or otherwise on a password-protected website for classroom use.
Table 14.4- Major Types of Social
Media Applications
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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
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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
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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
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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

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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
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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
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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
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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
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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
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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.