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Marketing for New Ventures. Entrepreneurial Marketing. Definition of marketing by the American Marketing Association :
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Entrepreneurial Marketing • Definition of marketing by the American Marketing Association: • an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. • Marketing practices vary depending on the type of company and the products and services it sells.
Entrepreneurial Marketing Why Marketing is Critical for Entrepreneurs • Because no venture can become established and grow without a customer market; • Because it is difficult and expensive to bring new products and services to market; • To differentiate product or service to customers makes the company distinctive and valuable; • Companies must be able to switch marketing gears quickly to attract new customer segments.
Entrepreneurial Marketing Entrepreneurs Face Unique Marketing Challenges • limited resources in financial, managerial, and time; • limited market information; • decision-making inclined to be muddled by personal biases and beliefs; • poorly established relations with multiple audiences.
Entrepreneurial Marketing Acquiring Market Information • Marketing research could cover information such as: • -Product attributes important to customers; • -Possibility of customers’ buying willingness by marketing behaviors; • -Market trend; • -The location of the customers’ preference.
Entrepreneurial Marketing Acquiring Market Information • Two basic types of market data • Primary data • Data you collect yourself • Limitations of primary data • Secondary data • Economical and usually used to collect baseline information
Entrepreneurial Marketing Marketing Strategy for Entrepreneurs • A company’s marketing strategy must closely align with its resources and capabilities; • Segmentation, targeting, and positioning are key marketing dimensions that set the strategic framework.
Entrepreneurial Marketing Marketing Strategy for Entrepreneurs/the Marketing Mix promotion Product Strategy place Pricing Strategy
Entrepreneurial Marketing Entrepreneurial Marketing Marketing Skills for Managing Growth • Understanding and Listening to the Customer • Building brand awareness and building brand equity
Disadvantages to existing companies entering new markets • Core rigidities: companies are only good at things they are used to doing • Tyranny of the current market: companies listen to their customers, who are not a source of ideas for new products in new markets • Use myopia: customers of existing firms see needs or solutions very narrowly (i.e., not the needs of others)
Disadvantages to existing companies entering new markets • Because large companies have these disadvantages with new markets, new ventures should focus on new markets instead of established ones
Market dynamics • Entrepreneurs are more successful in large and growing markets • Large markets amortize the fixed costs of getting started over a larger number of units • It’s easier to sell into rapidly growing markets
Market dynamics • The performance of product adoption follows an S shape • Initially, need a large amount of effort to achieve small improvements in product performance • Then performance improvements accelerate and small efforts can lead to large improvements • Later, must make large efforts to achieve small improvements
5 stages of technological adoption Source: http://www.icsb.org/wiki/index.php?title=S_curve
5 stages of technological maturity • Bleeding edge - shows high potential but hasn't demonstrated its value or generated consensus. • Leading edge - proven in marketplace but still new enough that it may be difficult to find knowledgeable personnel to implement or support it. • State of the art - when everyone agrees that a particular technology is the right solution. • Dated - still useful, sometimes implemented; replacement leading edge is readily available. • Obsolete - superseded by state-of-the-art technology, maintained but no longer implemented by the specific firm.
Market dynamics • Established firms rarely compete with entrepreneurs to develop new products on the early part of the S curve • The new product usually begins with inferior performance that hurts the company’s overall performance • Managers of established companies believe they can always improve the performance of their existing products to compete with new products
Entrepreneurial Marketing Entrepreneurial Marketing Guerilla Marketing • Guerilla marketing acts as non-traditional, grassroots, and captivating – that gain consumers’ attention and build awareness of the company. • Word-of-Mouth marketing, Buzz marketing, and Viral Marketing. • Other issues in Guerrilla Marketing.
Guerrilla marketing Selections from Francesco Mugnai’s “Best Guerilla Marketing Ideas”
Guerrilla marketing from an unexpected source http://www.youtube.com/watch?v=qMOuF8oskRU
