Internet marketing• How do you get

‘marketed to’ on the Internet?

• What methods do you prefer?

• What do you hate?

?

Chapter 10

Marketing for entrepreneurial ventures

Objectives1. To appreciate the context of entrepreneurial marketing as distinct to

traditional marketing2. To examine the entrepreneurial marketing concept – philosophy and

consumer orientation3. To establish the areas vital to a marketing plan4. To establish the concept and need for customer segmentation5. To identify the key elements of an effective market survey6. To outline the processes and entrepreneurial tactics in marketing research7. To examine marketing on the internet and the emerging use of social media

and mobile marketing for entrepreneurial firms8. To differentiate green marketing from traditional marketing practice9. To discuss the key features of a pricing strategy and how customisation

influences the perception of price by the customer

But first• Are there any companies that DON’T

market their products or services?• Are there companies that use only the

Yellow Pages?• Any companies that have turned off their

websites?• Is there any reason to market your venture

when business is already good?

?

Marketing is essential for entrepreneurs

• Marketing is as critical to new businesses as it is for established ones.

• Start-ups must be intimately in touch with their customers and with their needs.

What is a ‘market’ to an entrepreneur?

• 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.

• (And if it can meet the market’s need at a profit)

Poster from US Works Progress Administration, circa 1937

What is entrepreneurial marketing?• Innovative, risk-oriented and

proactive. • Achieve durable competitive

advantage• Traditional marketing is ‘cost driven’;

entrepreneurial marketing is ‘revenue driven’.

• Many new strategies, like co-creating a product with the customer.

What is the difference between traditional

and entrepreneurial marketing?Traditional marketing

• Concentrating on brand recognition or market share

• ‘Cost driven’• Marketing as objective,

dispassionate science• Efficient use of existing

resources• Four P’s: Product, Price,

Promotion, Place

Entrepreneurial marketing

• Concentrating on leveraging deep customer knowledge into sales

• ‘Revenue driven’• Marketing passion, zeal,

persistence and creativity• Creative use of the

resources of others• Four C’s: co-creation,

communities, customisation and choice.

  Traditional marketing Entrepreneurial marketing

Basic premise Facilitation of transactions and market control

Sustainable competitive advantage through value-creating innovation

Orientation Marketing as objective, dispassionate science

Central role of passion, zeal, persistence and creativity in marketing

Context Establishes relatively stable markets Envisioned, emerging and fragmented markets with high levels of turbulence

Marketer’s role

Coordinator of marketing mix; builder of the brand

Entrepreneur is responsible for marketing. Everyone in the firm is a marketer

Market approach

Reactive and adaptive approach with incremental innovation

Proactive approach, leading the customer with dynamic innovation.

Customer needs

Articulated, assured, expressed by customers through survey research Unarticulated, discovered, identified through lead users

Risk perspective Minimise risk Marketing as a vehicle for calculated risk takingValue perspective

Drive down costs and reduce the price to the customer

Uses innovation, product, process and strategy to create new value propositions for customers

Resource mgmt

Efficient use of existing resources, scarcity mentality.

Social networking and relationships with customers. Doing more with less.

NPD Marketing supports R&D Marketing is the home of innovation; customer is co-active producer

Customer’s role

External source of intelligence and feedback

Entrepreneur actively defines product, price, distribution and communication approaches

Components of effective marketing1 Marketing philosophy

2 Market segmentation

3 Consumer behavior

4 Marketing concept

Component: Marketing philosophy• Which of the three marketing

philosophies should you choose? – Any one can be successful, consumer-driven

philosophy is the most successful.

• Factors that influence your choice:– Competitive pressure– Entrepreneur’s background– Short-term focus

Component: Marketing plan• Your marketing philosophy is

reflected in your marketing plan.• Elements of your marketing plan:

– current marketing research – who the customers are, what they want, how they buy

– sales research – promoting and distributing products according to marketing research findings

– You need a marketing information system for collecting, screening, analysing, information on which to base plans, decisions and actions

– sales forecasting – coordinating personal judgement with reliable market information

– evaluation – identifying and assessing deviations from marketing plans.19

• In seven sentences!1. Purpose of your marketing.

Make it quantifiable.2. What are the characteristics

of the business that make it uniquely positioned to offer value to the public?

Component: Guerrilla marketing

3. Specifying exactly who will be exposed to the marketing campaign.

4. What marketing weapons will you use? 5. What is the company’s market niche? 6. Establish the identity of your company. 7. What percentage of projected gross sales are you willing to

earmark as your marketing budget?

For complete details, see Entrepreneurship in Practice, p. 335

• ‘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)

Component: Market segmentation

• A total market is often made up of sub-markets (called segments)

• Example: Wine-related lifestyle – ritual-oriented conspicuous wine enthusiasts– purposeful inconspicuous premium wine drinkers– fashion/image-oriented wine drinkers– basic wine drinkers – enjoyment-oriented social wine drinkers.

Component: Market segmentation

• Example: What segment of Social Media Behavior do you personally fit in?– Are you a commenter or a climber?

• Can you give other examples of market segmentation?

• What do you suppose this artist at theconversationprism sells?

?Component: Marketing segmentation

theconversationprism

Component: Segmentation variables• Demographics

– age group, gender, education level, ethnicity, income, occupation, social class, marital status

• Geographics– location (e.g. national, regional, urban/suburban/rural,

international), climate

• Current purchasing situation– brands used, purchase frequency, current suppliers

• Purchase ready– possess necessary equipment, property, knowledge and

skill sets

• Local environment– cultural, political, legal

• Benefits sought– price, overall value, specific feature, ease-of-use

• Product usage– how used, situation when used

• Purchase conditions– time of day/month/year when purchased, credit terms,

trade-in option

• Characteristics of individual buyer– purchase experience, how purchase imade, influencers

on purchase decision

• Psychographics– personality,

attitudes and lifestyle combined with demographics

Component: Consumer behaviour

• Defined by the types and patterns of consumer characteristics

• Especially personal and psychological characteristics

• Characteristics are linked to buying trends

Where were you in the adoption lifecycle?

?

Consumer behavior in the family life cycleStage Priorities Major purchases

Fledgling – teens and early 20s

Self, socialising, education

Appearance products, clothing, cars, recreation, hobbies, travel

Courting – 20s Self and other, pair bonding, career

Furniture and furnishings, entertainment and entertaining, savings

Nest building – 20s-early 30s Babies and career Home, garden, do-it-yourself items, baby-care

products, insurance

Full nest – 30 to 50 Children and others, career, mid-life crisis

Children’s food, clothing, education, transportation, orthodontics, career and life counselling

Empty nest – 50 to 75

Self and others, relaxation

Furniture and furnishings, entertainment, travel, hobbies, luxury cars, boats, investments

Sole survivor – 70 to 90

Self, health, loneliness

Healthcare services, diet, security and comfort products, TV and books, long-distance telephone services

Purpose & objectives

Secondary research

Primary research

Component: Marketing research

Component: Purpose of research• 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 does the business compare with competitors?– What impact does the business’s promotion have on

customers?– What types of products or services are desired by

potential customers?

• Information that has been compiled by others.

• The entrepreneur should exhaust all the available sources of secondary data.

• Several problems with using secondary data. – Data may be outdated and, therefore, less

useful. – Units of measure may not fit the current

problem. – Some sources of secondary data are less valid

than others.

Component: Secondary research

• Observational methods avoid contact with respondents

• Survey methods contact respondents in varying degrees– Develop an information-gathering instrument

(questionnaire)

Component: Primary research

See TABLE 10.5 COMPARISON OF MAJOR SURVEY RESEARCH TECHNIQUES

• These are the actual GEM questions used in eighty countries that determine if you are an entrepreneur?

Component: Primary research

Com

paris

on o

f m

ajor

sur

vey

tech

niqu

es

• Experimentation – model your marketing messages and try them out

• Consumer “research panels” manipulate one variable, for example taste, and attempt to hold other variables constant and observe changes in preference.

• Marketers can model marketing messages accurately and efficiently – and they can adjust their messages accordingly.

Component: Primary research

29

Component: Interpretation

• 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

Typical marketing research questions – sales• Sales• 1 Do you know all you need to know about your competitors’ sales performance by type of

product and territory?• 2 Do you know which accounts are profitable and how to recognise a potentially profitable

one?• 3 Is your sales power deployed where it can do the most good, maximising your investment in

selling costs?• Distribution• 1 If you are considering introducing a new product or line of products, do you know all you

should about distributors’ and dealers’ attitudes towards it?• 2 Are your distributors’ and dealers’ salespeople saying the right things about your products or

services?• 3 Has your distribution pattern changed along with the geographic shifts of your markets?

Typical marketing research questions – sales• Markets• Do you know about the differences in buying habits and tastes by territory and kind of product?• Do you have as much information as you need on brand or manufacturer loyalty and repeat purchasing?• Can you now plot, from period to period, your market share of sales by products?• Advertising• Is your advertising reaching the right people?• Do you know how effective your advertising is in comparison to that of your competitors?• Is your budget allocated appropriately for greater profit?• 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 for your

products?

Internet marketing• How do you get

‘marketed to’ on the Internet?

• What methods do you prefer?

• What do you hate?

?

Internet marketing• Increase presence and brand equity in

the marketplace• Cultivate new customers around the

world(be prepared for global customers)

• Improve customer service by allowing customers to serve themselves

• Gather information about customers

Marketing mix: Actions a marketer can take to promote brand or product. Usually referred as The 4Ps - Price, Product, Promotion and Place, they could today be replaced with Four C’s: co-creation, communities, customisation and choice. See Slide 8.

Replace at

3rd pages

Internet segmentation and customer behaviour

• Customers have different experiences at different times.

• On the Internet, people can construct their own occasions and return to a given website repeatedly, constructing different interactions each time.

• This allows the clever Internet-based entrepreneur to customise visitor experiences by performing usage-based market segmentation.

What kind of smart-phone user are you?

• Talkers: Use their phone mainly for verbal conversations. Not much social media use.

• Occasional: Make calls, play games and check the weather. Most features go unused. Reachable through their PCs and through print ads.

• Browsers: The largest group of smartphone owners are still learning about all the things they can do with their phone. Rarely use phone to purchase.

• Pragmatist: Mobile professionals use their phone to balance their work and personal lives.

• Tribal: Hyperconnected. Into Pinterest, Instagram and Flickr. Mobile-savvy, love their phone. Prefer direct messaging.

• Prodigy: Constantly connected, mobile-centric, tech trendsetters. True social media influencers.

?Group of customers united by behavior patterns, goals, skills, attitudes, and a few fictional details the make the persona a realistic character.

Replace at

3rd pages

Relationship marketing

• a

• Creates something of value that attracts attention and becomes viral in nature.

• Enables customers to promote a message themselves

• Encourages user participation and dialogue.

Traditional marketing Social media marketing• Emphasises audience

contribution and relinquishes control over large parts of the content.

• Important to be completely honest.

• ‘Two-way communication’ to an audience that is interested in responding.

• Seeks to control the content seen by the audience and attempts to dominate the territory by excluding their competitors’ message.

• Consumers expect some exaggeration

• ‘One-way’ from the firm to the customers.

Key distinctions of social media marketing

How to build asocial media marketing plan?

• a• Listen• Identify• Appraise• Implement

• Collaborate • Contribute • Convert • Monitor

Mobile social media marketing

Green entrepreneurial marketing

• Consumers – particularly the youngest ones – pay attention not only to price and quality but also to social and environmental values, as witnessed in the remarkable growth of the global market for organic and environmentally friendly products.

• Recyclability, reusability, biodegradableness and positive health effects are definitely in.

What is greenwashing?

• Many green consumers are increasingly savvy about greenwashing.

• Consumers prefer to choose a green product all other things being equal.

• But those ‘other things’ just don’t add up.

Twelve ounces of phosphate-tinged, caffeine-impregnated, caramel-flavoured sugar water. See ‘Natural Capital in a can

of cola’ Chapter 14, p. 523.

Consumers not yet reached the tipping point?• Consumers have not reached the ‘tipping point’• Not willing to compromise on convenience, price

and performance• Two market segments: Ecological fatalism &

Ecological concern

Key concepts

(close your books)1. What are the main

learnings from this chapter?

?