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Marketing challenges for

entrepreneurial ventures

Objectives
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To review the importance of entrepreneurial marketing and associated research for


new ventures
To identify the key elements of an effective market survey
To distinguish entrepreneurial marketing and guerrilla marketing from ordinary
marketing
To outline the processes of undertaking marketing research
To present factors that inhibit the use of marketing
To examine the entrepreneurial marketing concept philosophy, segmentation and
consumer orientation
7. To establish the areas vital to a marketing plan
8. To characterise the marketing stages of growing ventures
9. To examine entrepreneurial marketing on the Internet
10. To differentiate green marketing from traditional marketing
practice
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11. To discuss the key features of a pricing strategy.

But first

Q. What is the point of


marketing a new product or
service?

Marketing is civilised warfare


Marketing is as critical to new businesses as it is for
established ones
Start-ups must be intimately in touch with their
customers
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
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Entrepreneurial marketing
Proactive identification and exploitation of
opportunities for acquiring and retaining profitable
customers through innovative approaches to risk
management, resource leveraging and value creation.

A small business is not a little big business


Entrepreneurs are not corporations
They are selfmaximising, profitseeking
autonomous individuals leading small teams
They suffer from resource poverty
They need zero-budget marketing or guerrilla
marketing

Principles of guerrilla marketing

Based on human psychology


Primary investments are time, energy and imagination money
The primary statistic is profit
Concentrate on new relationships
Aim for more referrals, more transactions with existing
customers and larger transactions
Forget the competition and concentrate on cooperating
Use current technology as a tool to empower your
marketing
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Guerrilla marketing

Q. What could you do to market


a new MP3 watch using
guerrilla marketing?

Guerrilla marketing tactics


Webzine
Email newsletters
Send ecards to clients on
special dates
Participate in online
newsgroups and forums
Speeches to companies,
schools or organisations
Trade sets of business
cards with other
businesses

Make yourself newsworthy


Do something
environmentally conscious
Work with local media
Give free samples, trials,
consultations, etc.
Do whatever your competition
isn't doing

Relationship marketing
Build longer term relationships with customers
Understand their life cycle needs
Provide a range of products/services to existing customers as
they need them
Use it when:
You offer relatively high-value consumer products
The costs of switching are high
Customer involvement is high
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Marketing research
Gather information about your market
Then analyse the information (make it meaningful)
Plan a comprehensive approach to research

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Marketing research procedures


A. Define the 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 do you compare with competitors?
What impact does your promotion have on customers?
What types of products/services do potential customers desire?

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Marketing research procedures


B. Gather secondary data

Exhaust all the available sources of secondary data


Internal data exists in the business
External data includes the Internet, trade journals, other
entrepreneurs, etc.
Problems with secondary data:
Outdated
May not fit the current problem
Validity
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Marketing research procedures


C. Gather primary data

Observational methods avoid contact with respondents


Survey methods contact respondents in varying degrees
Experimentation model your marketing messages and try them out
Develop an information-gathering instrument (questionnaire)

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Marketing research procedures


D. Interpret and report information

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

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Marketing research questions


(Sales)
Do you know 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?
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Marketing research questions


(Distribution)
Do you know all you should about distributors and
dealers attitudes towards your product/service?
Are distributors/dealers salespeople saying the right
things about your products/services?
Has your distribution pattern changed along with
the geographical shifts of your markets?
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Marketing research questions


(Markets)
Do you know about differences in buying habits and
tastes by territory and kind of product?
Do you have as much information as you need on
brand/manufacturer loyalty and repeat purchasing?
Can you plot, from period to period, your market
share of sales by products?
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Marketing research questions


(Advertising)
Is your advertising reaching the right people?
Do you know how effective your advertising is
(in comparison with your competitors)?
Is your budget allocated appropriately for greater
profit?

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Marketing research questions


(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?
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The marketing concept


Integrate your approach to:

Marketing philosophy
Market segmentation
Consumer behaviour

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Marketing philosophy
1. Production-driven philosophy

Produce efficiently and worry about sales later

2. Sales-driven philosophy

Personal selling to persuade customers to buy the companys


output

3. Consumer-driven philosophy

Research to discover consumer preferences

Of the three philosophies, a consumerdriven orientation


is often most effective for the entrepreneur
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Marketing philosophy
The philosophy is influenced by:
Competitive pressure
Entrepreneurs background
Short-term focus (a risky aspect)

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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)

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Market segmentation

Q. What market segments do


you belong to?

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Market segmentation examples


People living in poverty

Single-serve packs of shampoo, detergents and other consumer


items sell well to people who cannot afford to stockpile products
Nokia have been successful in selling low-end mobile phones to
people living on a few dollars a day

Ecotourists in outback Australia have been segmented into:

Hard
Soft
Structured

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Various variables
Demographic variables include age, marital status,
sex, occupation, income and location
Benefit variables identify unsatisfied needs within a
market
Psychographics statistical analysis of psychological
characteristics

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

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Market segmentation

Q. If you were to write a


marketing plan, what would
it need to tell people?

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Marketing plan
A marketing plan is the process of determining a clear,
comprehensive approach to the creation of customers
It typically includes:
Current marketing research
Sales research and analysis
Marketing information system
Sales forecasting
Evaluation
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Current marketing research


Identify customers (target markets) and fulfil their desires,
by examining:
The companys major strengths and weaknesses
Market profile
Current and best customers
Potential customers
Competition
Outside factors
Legal changes
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Low-cost marketing research

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Current sales analysis


Match customer profiles with sales priority
Answer questions, such as:

Do salespeople call on their most qualified prospects on a


proper priority and time-allocation basis?
Does the sales force contact decision makers?
Are territories aligned according to sales potential and
salespeoples abilities?
Are sales calls coordinated with other selling efforts?
Do salespeople ask the right questions on sales calls?
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Marketing information systems


A computerised system to compile and organise
data, including cost, revenue and profit
Key factors are:

Data reliability
Data usefulness or intelligibility
Reporting timeliness
Data relevance
System cost
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Sales forecasting
Projecting future sales through historical sales
figures and statistical techniques
Important, but potentially flawed due to the use of
historical data

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Product research
Focus on competitors:

What products do competitors currently offer?


What is the extent of their product range?
Do they provide the consumer with a good range of
choices?
Do they have a product range that provides different
levels of pricing and quality?
Are fad items a feature of this industry?
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Evaluation
The final critical factor
Performance of the plan must be evaluated
Factors include:
Customer retention
Customer preferences and reactions
Sales volume , gross sales and market share
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Example five-step program


1. Appraise strengths and weaknesses, emphasising
competitive edge
2. Develop marketing objectives and specific sales
plans
3. Develop product/service strategies
4. Develop marketing strategies
5. Determine a pricing structure
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Marketing stages
There are distinct stages of maturation
Marketing strategy and marketing goals are
closely aligned at each stage
Each stage requires a distinct marketing
organisation

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Marketing stages

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Internet marketing

Q. What are the various


methods used to market
products using the Internet?

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Marketing on the Internet


Can assist the overall marketing strategy
Communicate:

Company/brand
Marketing mix

Cultivate new customers (globally)


Allows customers to serve themselves (not limited by
opening hours and location)
A mechanism for low-cost information gathering
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Internet segmentation
Customers have different experiences at different
times
Customised experiences through usage-based
segmentation
A simple set of segments:

Browsers draw them into the site


Buyers ease of access to the purchase
Shoppers combination of browser and buyer
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McKinsey Internet segmentation

Simplifiers like convenience


Surfers spend time browsing
Connectors are socialising
Bargainers are devoted to low-cost deals
Routiners return to the same sites
Sportsters are looking for information, and
focus on sports and entertainment
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Acquisition, conversion and retention

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Green marketing
A movement and a controversy
Green objectives, not just green theming (or
green washing)
Take a position!
But note: consumers prefer green product all
other things being equal
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Pricing strategies
Factors affecting the pricing decision

Competitive pressure
Availability of sufficient supply
Seasonal or cyclical changes in demand
Distribution costs
Products life cycle stage
Changes in production costs
Prevailing economic conditions
Customer services provided by the seller
Amount of promotion
The markets buying power
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Pricing strategies

Price your products to maximise profit


Creating buzz is key
Distribution (bundling) is a perceived plus
Choose your reference accounts wisely
Unique promotional campaigns
Advertising experiments
Marketing may affect capital raising more than sales
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Summary

(close your books)


Q. What are the main sections
in a marketing plan?
Q. How would you market a
rake that is also a miniwheelbarrow?
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Marketing research procedures:

Define the research purpose and objectives


Gather secondary data
Gather primary data
Interpret and report information

Marketing plan:

Current marketing research


Sales research and analysis
Marketing information system
Sales forecasting
Evaluation
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