Entrepreneurial Marketing

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Entrepreneurial Marketing

• Course Introduction
• College of Engineering
• University of California, Berkeley

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Scope of Marketing Course
Marketing Modules
Module 1 Market Definition, Customer Segmentation Competition (5Cs)
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
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Module 1 Market Selection, Customer
Segmentation Competition

• Entrepreneurial Marketing

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Marketing is an Exchange Process
Company
Customer
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Understanding the Customer

• Who are They?
• Personal characteristics
• Product usage patterns
• Why do They Buy?
• Needs
• Purchase Motivations
• How do They Buy?
• Decision-making unit (DMU)
• Decision-making process

• What do They Buy?
• Whole Product or Service
• Set of product and non-product capabilities that
  meet buying objective
• Set apart from competition
• Where do They Buy?
• Appropriate channel design

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Model for Marketing Decision-Making5 Cs 4 Ps
Context
Competition Competitive Advantage
Collaborators Shared Interests
Company Core Competencies
Customer Unmet Needs
Target Market
Assess the Situation
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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
• 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

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Positioning

• Positioning Managing the product and its
  presentation to fit a predetermined place in the
  mind of the customer
• Positioning Market Competitive
  Segmentation Differentiation

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Positioning Statement

• For target market , COMPANY/PRODUCT is,
• among competitive set ,
• single most important claim ,
• because single most important support.

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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

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Customer Decision-Making

• Multiple players roles (DMU)
• Motivations, power, perceptions of each?

Initiator
Influencer
Decider
User
Gatekeeper
Purchaser
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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
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Key Themes

• The 5 Cs 4 Ps of marketing -- All
• Customer behavior Microfridge, Wildfire,
  CardioThoracic
• Customer segmentation Wildfire, Sealed Air,
  Documentum, Biopure
• Positioning Wildfire, Sealed Air
• Decision making unit (DMU) and decision making
  process (DMP) Microfridge, Wildfire,
  CardioThoracic
• Competitive landscape All

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Module 2 Product Policy, Positioning Pricing

• Entrepreneurial Marketing

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Model for Marketing Decision-Making5 Cs 4 Ps
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
DefineMarketingMix (4Ps)
Product
Place
Price
Promotion
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Product Adoption Lifecycle
Conservatives
Pragmatists Stick with the herd
Move only when necessary
Visionaries
Move ahead of the herd
Skeptics
No way
Techies Try it
The Chasm
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Lifecycle Stages

• Early Adopters
• Product innovation
• Build primary demand
• Market education
• Price skimming to fund growth

• Early Majority
• Product proliferation
• Stake out dominant market share
• Channel development
• Product line extensions
• Achieve economic scale

• Late Majority
• Market Maturity
• Survive industry shakeout
• Superior distribution / availability
• Strong trade promotions
• Penetration pricing
• Low-cost producer

The Chasm
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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

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Whole Product

• The Whole Product
• Physical Product
• All Associated Factors (services,
  partners,warranties, guarantees, image,
  training, etc.) required to fulfill customer
  buying criteria

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Pricing Concepts
OurProduct / Service Capabilities
Value of Perfect Substitute
CompetitorProduct / ServiceCapabilities
Gap
Gap
Marketing Sales Efforts
CustomerPerceived Value
Input intoPricing Strategy
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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
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Pricing Strategies

• Market Skimming
• Image/brand supports high price
• Solving high-value need with limited substitutes
• Small/limited initial buyer set
• Competition cannot get in and undercut
• Limited manufacturing capacity
• High fixed cost at low volumes

• Market Penetration
• Costs go down with volume (economies of scale)
• Market is price sensitive
• High chance of competition entering quickly
• Have sufficient manufacturing capacity
• Large immediate demand

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Bonomas Vegematic Pricing Model
Competitors Prices
CustomersPerceivedValue
Skim Pricing
FeasiblePrice Range
Penetration Pricing
Companys Variable Costs
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Key Themes

• Product innovation development process
  CardioThoracic
• Whole Product Microfrige, Documentum,
  CardioThoracic
• Horizontal vs. Vertical markets Documentum
• Multi-product line management Wildfire, Sealed
  Air, Biopure
• Pricing economics math Sealed Air, Biopure
• Go-to-Market considerations All
• Technology adoption lifecycle -- All

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Modules 3 4 Promotion Place
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
DefineMarketingMix (4Ps)
Product
Place
Price
Promotion
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Assignment 3 Product, Positioning Pricing
Plans

• Company
• Why are you in business and how do you make
  money?
• Core competencies (people, know-how, etc.)
• Customer
• Customer problem / pain points
• Value proposition to solve pain points
• Target market segment(s)
• Positioning statement(s) for those segments
• Competition
• Direct competitors
• Alternates / Substitutes
• Product
• Features/Advantages/Benefits
• Pricing
• Pricing approach skim, penetration, other
• Pricing stucture/level