Chapter 8

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Chapter 8

  1. 1. Part III – Developing the Entrepreneurial Plan Chapter 7 – Environmental Assessment: Preparation for a New Venture Chapter 8 – Marketing Research for New Ventures Chapter 9 – Financial Preparation for Entrepreneurial Ventures Chapter 10 – Developing an Effective Business Plan Copyright (c) 2004 by South-Western, a division of Thomson Learning. All rights reserved.
  2. 2. Chapter 8 – Marketing Research For New Ventures
  3. 3. Definition of a Market <ul><li>A market is a group of consumers (potential customers) who have purchasing power and unsatisfied needs. A new venture will survive only if a market exists for its product or service. </li></ul>
  4. 4. Marketing Research <ul><li>Marketing Research involves the gathering of information about a particular market, followed by analysis of that information. </li></ul>
  5. 5. Defining the Research Purpose and Objectives
  6. 6. <ul><li>Gathering Secondary Data </li></ul><ul><li>Gathering Primary Data </li></ul>
  7. 7. Developing an Information-Gathering Instrument <ul><li>Make sure each question pertains to a specific objective in line with the purpose of the study. </li></ul><ul><li>Place simple questions first and difficult-to-answer questions later in the questionnaire. </li></ul><ul><li>Avoid leading and biased questions. </li></ul><ul><li>Give concise but not complete directions in the questionnaire. </li></ul><ul><li>When possible, use scaled questions rather than simple yes/no questions to measure intensity of an attitude or frequency of the experience. </li></ul>
  8. 8. Interpreting and Reporting the Information
  9. 9. Inhibitors to Market Research <ul><li>Cost </li></ul><ul><li>Complexity </li></ul><ul><li>Strategic Decisions </li></ul><ul><li>Irrelevancy </li></ul>
  10. 10. Developing the Marketing Concept
  11. 11. Marketing Philosophy <ul><li>Production-driven philosophy </li></ul><ul><li>Sales-driven philosophy </li></ul><ul><li>Consumer-driven philosophy </li></ul>
  12. 12. Market Segmentation <ul><li>Market segmentation is the process of identifying a specific set of characteristics that differentiate one group of consumers from the rest. </li></ul>
  13. 13. Consumer Behavior <ul><li>Five Major Classifications: </li></ul><ul><li>Convenience goods </li></ul><ul><li>Shopping goods </li></ul><ul><li>Specialty goods </li></ul><ul><li>Unsought goods </li></ul><ul><li>New products </li></ul>
  14. 14. Marketing Stages for Growing Ventures Stage 1: Entrepreneurial Marketing Stage 2: Opportunistic Marketing Stage 3: Responsive Marketing Stage 4: Diversified Marketing Marketing Strategy Market Niche Market Penetration Product- Market Develop- ment New- Business Develop- ment
  15. 15. Marketing Planning <ul><li>Marketing research </li></ul><ul><li>Sales research </li></ul><ul><li>Marketing information system </li></ul><ul><li>Sales forecasting </li></ul><ul><li>Marketing plans </li></ul><ul><li>Evaluation </li></ul>
  16. 16. Telemarketing <ul><li>Advantages: </li></ul><ul><li>Receptiveness </li></ul><ul><li>Impressions </li></ul><ul><li>More presentations </li></ul><ul><li>Unlimited geographic coverage </li></ul><ul><li>Better time management </li></ul><ul><li>Immediate feedback </li></ul><ul><li>Better control </li></ul><ul><li>Less “piracy” </li></ul><ul><li>Lower salary and commissions </li></ul>
  17. 17. Telemarketing <ul><li>Pitfalls: </li></ul><ul><li>Poor telephone techniques can defeat the telemarketing strategy. </li></ul><ul><li>Dissension between the field sales staff and the telephone sales personnel can arise. </li></ul><ul><li>Entrepreneurs must be aware of the ever-present problem of rapid turnover of telephone staff. </li></ul>
  18. 18. Marketing on the Internet <ul><li>The Internet allows the firm to increase its presence and brand equity in the marketplace. </li></ul><ul><li>The Internet allows the company to cultivate new customers. </li></ul><ul><li>The Internet allows Web site visitors to match their needs with the offerings of the company. </li></ul><ul><li>The Internet can improve customer service by allowing customers to serve themselves. </li></ul><ul><li>The greatest potential for the future is probably in direct marketing, where catalogs can be offered online. </li></ul>
  19. 19. Pricing Strategies
  20. 20. Pricing for the Product Life Cycle Product Life-Cycle Stage Pricing Strategy <ul><li>Introductory Stage </li></ul><ul><li>Unique product </li></ul>Skimming – deliberately setting a high price to maximize short-term profits <ul><li>Nonunique product </li></ul>Penetration – setting prices at such a low level that products are sold at a loss Growth Stage Consumer Pricing – combining penetration and competitive pricing to gain market share; depends on consumer’s perceived value of product Maturity Stage Demand-Oriented Pricing – a flexible strategy that bases pricing decisions on the demand level for the product Decline Stage Loss Leader Pricing – pricing the product below cost in an attempt to attract customers to other products

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