Creating a New Business

Launching of a Business

University of the Central Punjab

Gujranwala Campus
Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns
 Marketing

Customers buy BENEFITS...not features

Standard Benefits
Our shop accepts all leading credit cards...which
means you can budget for your purchases to suit
your pocket
Company Benefits
Our shop is a family business...which means that
you get individual, personal attention from
somebody who cares
Differential Benefits (USP / USB)
We are sole agents for that product...which
means you can’t get it anywhere else

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Marketing Mix
Product
Design, sizes, colours
Materials, quality
Specification
After-sales service

Price Promotion
People
List price Advertising
Service
Discounts, special Point-of-sale displays
Advice
offers Leaflets, brochures etc.
Support
Payment terms Personal selling
Relationships
Service & spares prices Telephone, internet, post

Place
Location
Layout, design
Channels of distribution
Routes to market:
telephone, internet, post

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 The Pricing Range

Variable Average
cost per cost per Value to the
unit unit customer

‘Too-low’ ‘Going-rate’ ‘Too-high’

price price price

Pricing Range

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Launch Pricing Options

Going rate pricing - matching prices

in market place
Skimming - charging higher price
because of inelasticity of demand
Penetration - charging lower than
going-rate because of elasticity of
demand to gain market share
quickly

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Generic Marketing Strategies
Broad market

COMMODITY OUTSTANDING
SUPPLIER SUCCESS
Low price High price

Low differentiation High differentiation

MARKET NICHE
TRADER PLAYER
Focused market

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Customer Loyalty Ladder

Advocate

Increasing Loyalty
Supporter

Regular
Customer

Customer

Prospect

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Segmentation

Industrial Consumer
Type of business Socio-economic group
Size of business Age
Quantity of Sex
purchase Home location
Credit worthiness Occupation
After-sales service Stage in family life-
Usage rate cycle
Benefit required

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Segmentation

• Segment must be distinctive and

significantly different from any other –

• Segment must be of sufficient size to make

it commercially attractive.

• Segment must be accessible.

• Segment must be defendable from

competitors

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Relationship v Transactional
Marketing
Relationship Transactional
Marketing Marketing
Encourages close, Limited contact
frequent contact
Encourages repeat Orientated toward
sales single sale
Focus on service Limited service
Focus on value Focus on benefits
Focus on quality of Focus on quality of
total offering product
Focus on long-term Focus on short-term

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

Entrepreneurial Marketing Planning
Determine future organisational performance
objectives

Review conventional influences on

performance

Can marketing conventions deliver

performance goals?

Yes No
ENTREPRENEURIAL
CONVENTIONAL PLAN
PLAN

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Market Research
Field research Desk research
• Reflects your needs • Cheap
Advantages

• You control quality • Quick

• Up to date • Good for background

• Expensive • Not specific

Disadvantages

• Takes time • Can be out of date

• Can tell • Can be incomplete or
competitors what inaccurate
you are up to

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Market Research
Personal Telephone Postal
interview interview questionnaire
Quality of data

Quantity of data

Speed

Response rate

Cost
high reasonable reasonable

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Selling Skills

• Know what customers want

• Know how to match this to the
product/service you have to sell
• Know how to build up argument
that it does indeed meet their
requirements
• Know how to close the sale

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Sales Objections

• Feature objection
• Information-seeking objection
• Price objection
• Delay objection
• Loyalty objection
• Hidden objection

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Internet Retailing
• Providing something different
• Business must be clearly focused but be
sufficiently flexible to change quickly to
sustain growth
• Management must be good with a good plan, a
grasp of critical issues and credibility with
financiers
• Business must develop a strong brand and, on
the back of this, create and maintain very high
levels of service
• Delivery must be on time
• Site must be accessible, orders must be simple
to place and easily tracked whilst in the system

Brady

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns

 Group Activity

You want to launch a new business.

How will you develop and justify your
marketing mix in order to explore your
market.

Chapter 7 Entrepreneurship & Small Business (3rd edition), Paul Burns