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Entrepreneurial Marketing
Course Introduction
College of Engineering
University of California, Berkeley
Scope of Marketing Course
Marketing Modules
Module 1
Market Definition, Customer Segmentation & Competition
(5C’s)
Module 2
Product Development, Positioning & Pricing
(PRODUCT)
(PRICE)
Module 3
Marketing Communications
(PROMOTION)
Module 4
Distribution & Sales Channel Development
(PLACE)
Conclusion
Putting it All Together
Module 1: Market Selection,
Customer Segmentation &
Competition
Entrepreneurial Marketing
Marketing is an Exchange Process
Company
Customer
Understanding the Customer

Who are They?

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Personal characteristics
Product usage patterns


Why do They Buy?

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Needs
Purchase Motivations


What do They Buy?
How do They Buy?


Decision-making unit
(DMU)
Decision-making process
“Whole” Product or Service
Set of product and nonproduct capabilities that meet
buying objective
Set apart from competition
Where do They Buy?

Appropriate channel design
Model for Marketing Decision-Making:
5 C’s & 4 P’s
Context
Competition
Collaborators
Competitive Advantage
Shared Interests
Company
Customer
Core Competencies
Unmet Needs
Target Market
Assess the Situation
Segmentation

Concept
 Customers differ in the benefit they expect to receive from a
product/service
 While not all customers are heterogeneous, there are often
CLUSTERS of customers that are
 Segmentation = cluster of (nearly) similar customers

Goal: Identify factors that separate CLUSTERS
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Geographic – country, urban/rural, region, etc.
Demographic – age, sex, income, education, industry, size of
organization
Psychographic – personality traits, perceptual style, attitudes,
reference group, social role
Product Benefits/Usage – needs, frequency of use, loyalty,
performance requirements
Decision Process – shopping patterns, info search, media habits,
price sensitivity
Positioning

Positioning = Managing the product and its
presentation to fit a predetermined place in
the mind of the customer

Positioning = Market
+ Competitive
Segmentation Differentiation
Positioning Statement
For target market , COMPANY/PRODUCT is,
among
competitive set
,
single most important claim ,
because
single most important support.
Elements of a “Great” Positioning

Company






Fit with company
strategy
Fit with company
capabilities
Fit with corporate culture
Fit with product strategy
Fit with physical product
Fit with brand
personality / brand
essence

Customer






Credible
Relevant
Unique
Durable
Emotionally appealing
Context


Fit with trends
Unique vs. Competition
Customer Decision-Making


Multiple players & roles (DMU)
Motivations, power, perceptions of each?
Initiator
Influencer
Decider
Purchaser
Gatekeeper
User
Customer Decision-Making Process
Decision-making Process
DMU
Identify Need
Create Biz Case
Case Approval
RFI
Vendor Review
Initiator
Gatekeeper
Influencer
Decider
Purchaser
Users
Time
….
Key Themes:


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
The 5 C’s & 4 P’s of marketing -- All
Customer behavior -- All
Customer segmentation – Wildfire, Sealed Air
Positioning – Wildfire, Sealed Air
Decision making unit (DMU) and decision
making process (DMP) – MyTeam, Wildfire
Competitive landscape – Sealed Air
Module 2: Product Policy,
Positioning & Pricing
Entrepreneurial Marketing
Model for Marketing Decision-Making:
5 C’s & 4 P’s
Assess the Situation (5 C’s)
Select
Target
Market
Define
Marketing
Mix (4P’s)
Target Market
Product
Price
Place
Promotion
Product Adoption Lifecycle
Pragmatists
Stick with the herd
Visionaries
Move ahead of the herd
Techies
“Try it”
The Chasm
Conservatives
Move only when necessary
Skeptics
No way
Lifecycle Stages
Early Adopters
Early Majority
 Product
 Product proliferation
innovation
 Stake out dominant
 Build primary
market share
demand
 Channel
 Market
development
education
 Product line
 Price skimming
extensions
to fund growth  Achieve economic
scale
Late Majority
 Market Maturity
 Survive industry
shakeout
 Superior distribution
/ availability
 Strong trade
promotions
 Penetration pricing
 Low-cost producer
Horizontal vs. Vertical Strategies
Horizontal
 Platform or toolkit for wide
range of business
problems
 Pursue full array of market
opportunities
 Need technology partners
to fill product gaps
 Sell to IT
 Sell to visionaries
 Each sale is starting from
scratch (until cross the
chasm)
Vertical
 Solutions to specific
business problems
 Decline deals outside of
vertical
 Need system integrators to
customize & integrate
 Sell to business person
directly affected
 Sell to pragmatists
 Easier follow-on sales in
vertical due to references
Whole Product
Augmented Product
=
Physical Product
+
All Associated Factors (services, partners,
warranties, guarantees, image, training, etc.)
=
“The Whole Product”
Pricing Concepts
Our
Product / Service
Capabilities
Value of
“Perfect Substitute”
Gap
Gap
Marketing &
Sales Efforts
Customer
Perceived Value
Input into
Pricing Strategy
Competitor
Product / Service
Capabilities
Pricing: Internal & External Factors
Internal Factors
 Objectives of the Firm
 Marketing Mix strategy
 Costs
External Factors
 Nature of the market
 Demand
 Competition
 Channel pressures
Pricing Decisions
Pricing Strategies
Market Skimming
 High-quality
 Image should support high
price
 Enough buyers want to buy
 Variable cost is low at low
volumes
 Competition cannot get in
and undercut
Market Penetration
 Costs go down with volume
(economies of scale)
 Market is price sensitive
 High chance of competition
entering quickly
 Have sufficient
manufacturing capabilities
 Large immediate demand
Bonoma’s Vegematic Pricing Model
Competitors Prices
Customer’s
Perceived
Value
Skim Pricing
Feasible
Price Range
Penetration Pricing
Company’s
Variable
Costs
Key Themes:
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Product adoption lifecycle -- All
Multi-product line management – Sealed Air,
Biopure
Pricing economics & math -- Biopure
Whole Product – MarketSoft, Documentum
Product innovation & development process –
MarketSoft
Horizontal vs. Vertical markets – Documentum
Product Development & Launch – guest speaker
Gorman
Modules 3 & 4: Promotion & Place
Assess the Situation (5 C’s)
Select
Target
Market
Define
Marketing
Mix (4P’s)
Target Market
Product
Price
Place
Promotion