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Workshop 5 slides

  1. 1. Commercial Development Programme Commercial Essentials Workshop 5 – Understanding, Finding and Developing Markets
  2. 2. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Ross Golightly
  3. 3. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Agenda </li></ul><ul><li>Recap on Commercialisation Project Management Cycle </li></ul><ul><li>Introduction to Marketing </li></ul><ul><li>Defining Your Market </li></ul><ul><li>Identifying Application Markets </li></ul><ul><li>Characteristics of Different Markets </li></ul><ul><li>Market Research: Sources of Information for Desk Research </li></ul><ul><li>Basic Searching Strategies for Market Research </li></ul><ul><li>Market Research Resources and Links </li></ul><ul><li>Pro’s and Con’s of Different Exploitation Strategies </li></ul><ul><li>Process for Licensing IP / Technology </li></ul><ul><li>Licensing Agreements </li></ul><ul><li>Valuing IP </li></ul><ul><li>Negotiating Tactics </li></ul><ul><li>Royalties </li></ul><ul><li>Value Proposition Development </li></ul><ul><li>Marketing Strategies </li></ul><ul><li>Segmentation </li></ul><ul><li>Generic Strategies </li></ul><ul><li>Pricing Strategies </li></ul>
  4. 4. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Commercialisation Project Management Cycle Risk Management Strategy IP Exploitation Concept Research Business Plan IP Protection Funding Package Product Dvpt Commercial- isation Working Capital Strategy Dvpt Market Research Company Set Up Idea Dvpt Revenue Generation
  5. 5. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Our Basic Function is to Create a Customer, profitably. </li></ul><ul><li>This we do by focussing on Marketing and Innovation </li></ul><ul><li>The rest are merely support functions where cost must be contained, reduced and waste eliminated </li></ul><ul><li>Marketing and Innovation generate </li></ul><ul><li>Margins! </li></ul><ul><li>Margins generate profits! </li></ul>
  6. 6. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Define Your Research from the Perspective of Needs: A Market … £100m Value? (That’s Financial) … France and Germany? (That’s Geography) … High Street / On-Line? (That’s a Channel) A Market People with a Common Need or Want If You Start with a Definition of a Technology or Research Piece, You will never Define a Need!
  7. 7. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Developing Markets and Identifying Application Markets Your application markets will depend on your intended business model. Consider in what contexts your IP / Technology / Services can be used?
  8. 8. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Characteristics of Different Markets: Consumer Markets </li></ul><ul><li>Simple supply chain with high visibility but difficult to enter as a start-up </li></ul><ul><li>Usually manufacturer to retailer (and sometimes via distributor/wholesaler) </li></ul><ul><li>More easy to map out the potential market through desk research </li></ul><ul><li>Generally highly price driven and very product driven </li></ul><ul><li>Aggressive marketing based on emotional pull of the product </li></ul><ul><li>Multiple margin tiers: trade price to retailer, end-user price plus VAT uplift </li></ul><ul><li>Generally two revenue stream options: 1) direct, 2) indirect (retail distribution) </li></ul><ul><li>Twin marketing requirements: 1) Trade marketing and 2) Consumer marketing </li></ul>
  9. 9. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Characteristics of Different Markets: Industrial / B2B Markets </li></ul><ul><li>More complex market structures with inter-dependent supply chains </li></ul><ul><li>Think: application markets (especially for technology) </li></ul><ul><li>Often difficult to quantify market size and characteristics (lots of data is “invisible” </li></ul><ul><li>or unavailable) </li></ul><ul><li>Performance-driven relationships (i.e. supply chain KPI’s, rate of defects etc.) </li></ul><ul><li>Several stages in supply chains – e.g. Automotive and Aerospace tier 1 and 2 </li></ul><ul><li>Distinction between OEM and Aftermarkets (two different product offers) </li></ul><ul><li>Relationships and selling are often contractual or tender led (customer-supplier </li></ul><ul><li>integration) </li></ul><ul><li>High importance placed on quality </li></ul>
  10. 10. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Characteristics of Different Markets: Services Markets </li></ul><ul><li>Lowest barriers to entry (easy to establish and less overheads) </li></ul><ul><li>Relationship driven and less price sensitive </li></ul><ul><li>Very little “consumer-type” marketing, such as advertising </li></ul><ul><li>People to people marketing (i.e. networking, referrals, personal introductions) </li></ul><ul><li>More smaller, focussed markets </li></ul><ul><li>Proposition often based on exploitation of some level of intellectual capital </li></ul><ul><li>Selling based on business value to the third party </li></ul>
  11. 11. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Market Research: Sources of Information for Desk Research </li></ul><ul><li>Online information alone is doubling every 6 months </li></ul><ul><li>Information is available: </li></ul><ul><ul><li>- On the web (free) </li></ul></ul><ul><ul><li>- In the web (invisible) </li></ul></ul><ul><ul><li>- Via the web (fee based) </li></ul></ul><ul><li>Knowing where to start looking for information is the key to success </li></ul><ul><li>Search Strategies: </li></ul><ul><ul><li>- Know what you are looking for before you begin </li></ul></ul><ul><ul><li>- Refine results </li></ul></ul><ul><ul><li>- Use more than one search tool </li></ul></ul>
  12. 12. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Basic Searching Strategies for Market Research </li></ul><ul><li>Basic search strategies can greatly increase your recall of relevant information: </li></ul><ul><li>Keywords – specific, unique and descriptive as possible </li></ul><ul><li>Use parentheses to keep words and phrases together </li></ul><ul><li>Use +/- to add or delete words from your search </li></ul><ul><li>Think of word order – it does matter </li></ul><ul><li>Define by further specificity: +statistics /+ map/+ database </li></ul><ul><li>Limit search to title only: intitle: </li></ul><ul><li>Limit search to text only: intext: </li></ul><ul><li>Limit search to links only: inlink: </li></ul><ul><li>Limit search to site type: site:edu </li></ul><ul><li>Limit search by date: daterange: (start date-end date) </li></ul>
  13. 13. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Market Research: Intellectual Property Searching </li></ul><ul><li>Sources of information to search for competitor IP and for own ideas / IP: </li></ul><ul><li>Intellectual Property Office (IPO) for Patents, Trademarks and Design </li></ul><ul><li>Registrations: http://www.ipo.gov.uk </li></ul><ul><li>Espace – for patents granted: http://gb.espacenet.com </li></ul>
  14. 14. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Market Research: Financial and Competitor Data </li></ul><ul><li>Sources of information to search for competitor information or data on potential licensees, distributors or market partners: </li></ul><ul><li>Companies House - free basic data and can order company reports for £1/report: </li></ul><ul><li>www.companieshouse.gov.uk </li></ul><ul><li>Free information from financial pages of listed companies in Europe and the USA: </li></ul><ul><li>www.carol.co.uk </li></ul><ul><li>Free annual reports of NYSE/NASDAQ listed companies: www.annualreports.com </li></ul><ul><li>Bureau Van Dijk – one free company profile - http://www.bvdinfo.com/Home.aspx </li></ul><ul><li>Otherwise, BVD’s Mint and Fame services (paid for) are excellent for full company </li></ul><ul><li>accounts, abbreviated accounts and Director contacts </li></ul>
  15. 15. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Market Research: Financial and Competitor Data </li></ul><ul><li>Trade directories for company information and business listings: </li></ul><ul><li>Yahoo Company and Trade Directories: </li></ul><ul><li>http://uk.dir.yahoo.com/business_and_economy/directories/ </li></ul><ul><li>Worldwide directory of free access directories and databases: </li></ul><ul><li>www.freedirectories.com/ </li></ul><ul><li>Kompass free of charge trade directory searching: http://gb.kompass.com/ </li></ul><ul><li>Search 700,000 manufacturers by product/service: http://www.solusource.com </li></ul><ul><li>Applegate free trade directory search: http://www.applegate.co.uk/ </li></ul>
  16. 16. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Market Research: Free Market and Industry Data </li></ul><ul><li>Office of National Statistics (ONS): http://www.statistics.gov.uk/hub/index.html </li></ul><ul><li>Government Departments (e.g. NHS, department of culture, media and sport etc) </li></ul><ul><li>Blogs: use Google Blog search: http://blogsearch.google.co.uk/ </li></ul><ul><li>Key Note (if not subscribed to, use the free executive summaries for top-line </li></ul><ul><li>information): www.keynote.co.uk </li></ul><ul><li>Report Linker searches all free resources for reports: http://www.reportlinker.com/ </li></ul><ul><li>Mori free reports, including highlights and summaries from paid-for reports: </li></ul><ul><li>http://www.ipsos-mori.com/ </li></ul><ul><li>Market and sector reports at UK Trade & Investment (requires registration): </li></ul><ul><li>https://www.uktradeinvest.gov.uk/ </li></ul>
  17. 17. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Market Research: Business Opportunities </li></ul><ul><li>Set up tender monitoring for business opportunities via free sites: </li></ul><ul><li>Free public sector Tender monitoring service: http://www.supply2.gov.uk/ </li></ul><ul><li>Tenders Electronic Daily (TED): http://www.tenders.com/ </li></ul><ul><li>Websites of key organisations seeking to appoint service providers where tenders </li></ul><ul><li>may be published </li></ul>
  18. 18. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Paid-For Resources (A Small Selection of the Useful Ones) </li></ul><ul><li>The University may be able to provide or access these at no cost to you: </li></ul><ul><li>Mintel: http://reports.mintel.com </li></ul><ul><li>MarketResearch.com (120,000 market research reports): ww.marketresearch.com/ </li></ul><ul><li>Research and Markets: http://www.researchandmarkets.com/ </li></ul><ul><li>Datamonitor: http://www.datamonitor.com/ </li></ul><ul><li>Euromonitor: http://www.euromonitor.com/ </li></ul><ul><li>Technology Markets: Frost & Sullivan: www.frost.com/prod/servlet/frost-home.pag </li></ul><ul><li>IT Industry: Gartner: http://www.gartner.com/technology/home.jsp </li></ul>
  19. 19. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Licensing Based Exploitation Strategy: Pro’s </li></ul><ul><li>Requires substantially less cost to commercialise your IP: costs are largely front- </li></ul><ul><li>ended (R&D, IP Protection, Commercialisation, Licensing Agreement) </li></ul><ul><li>Requires substantially less management time and resources and has little/no </li></ul><ul><li>ongoing costs, other than patent renewals, accounting fees and incidental costs </li></ul><ul><li>A third party assumes the risk of commercialising your IP </li></ul><ul><li>An established player will be able to get your product to market quicker than you </li></ul><ul><li>can and possibly generate higher sales volumes than a start-up would </li></ul><ul><li>Although you are giving away a larger share of the profitability, the likelihood is the </li></ul><ul><li>licensee is capturing a share of a larger opportunity </li></ul><ul><li>Licensing provides passive and secondary income streams for the inventor who </li></ul><ul><li>can be working on other ideas </li></ul>
  20. 20. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Licensing Based Exploitation Strategy: Con’s </li></ul><ul><li>A less equitable business model for the entrepreneur or inventor </li></ul><ul><li>Entirely reliant on a third party to commercialise your IP </li></ul><ul><li>Less relevant for service-based businesses </li></ul><ul><li>Less likely to attract funding from investors or VC’s because its deemed less of a </li></ul><ul><li>scalable business model </li></ul><ul><li>You are an invisible entity to the end-user – the licensee is associated with the IP </li></ul><ul><li>Doesn't lend itself as well to service businesses </li></ul>
  21. 21. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Manufacturing / Scalable Trading Business: Pro’s </li></ul><ul><li>Building a scalable business is more equitable and financially rewarding (in the </li></ul><ul><li>longer-term) </li></ul><ul><li>More personally rewarding / fulfilling </li></ul><ul><li>The inventor / entrepreneur retains control </li></ul><ul><li>A manufacturing business is more attractive to an investor or VC </li></ul><ul><li>Will attract higher grant funding </li></ul>
  22. 22. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Manufacturing / Scalable Trading Business: Con’s </li></ul><ul><li>Requires higher financing and has high cash demands during the early trading </li></ul><ul><li>stages </li></ul><ul><li>Some markets (e.g. consumer products) have higher barriers for entry for start- </li></ul><ul><li>up’s </li></ul><ul><li>Requires significant investment of time and resources </li></ul><ul><li>Unlikely to return high profits in the short-term unless robust and clear routes to </li></ul><ul><li>market are established </li></ul>
  23. 23. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Go to Market Strategy: Licensing </li></ul><ul><li>There is a basic process to follow for licensing IP / Technology: </li></ul><ul><li>Map out the potential application markets for your product, service or technology </li></ul><ul><li>Undertake due diligence on each of those application markets: </li></ul><ul><ul><li>- Market size </li></ul></ul><ul><ul><li>- Historical performance (growth, decline, stagnation) </li></ul></ul><ul><ul><li>- Market trends and key issues </li></ul></ul><ul><ul><li>- Sales channels and routes into the sector (distributors, intermediaries, agents) </li></ul></ul><ul><ul><li>- Barriers to entry (technological / legislative etc.) </li></ul></ul><ul><li>Identify the potential end-users of your product, service or technology within those application markets </li></ul><ul><li>Go back up the supply chain by one immediate step to the organisations supplying those end users </li></ul>
  24. 24. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Go to Market Strategy: Licensing </li></ul><ul><li>Look at strategic fit of each major player to your IP: </li></ul><ul><ul><li>Is your product, service or technology complimentary as an add on to the </li></ul></ul><ul><ul><li>company’s existing core range? </li></ul></ul><ul><ul><li>Are they manufacturing similar products/services/technologies where your IP </li></ul></ul><ul><ul><li>would be a logical add-on? </li></ul></ul><ul><ul><li>- Do you have visibility on their major customers and key markets? </li></ul></ul><ul><ul><li>Do they have manufacturing capability or are they merely a sales </li></ul></ul><ul><ul><li>organisation? </li></ul></ul>
  25. 25. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Go to Market Strategy: Licensing </li></ul><ul><li>Gather data and intelligence on each of those organisations to draw up your potential licensing short-list: </li></ul><ul><li>  </li></ul><ul><ul><li>- Full company address and contact details / base of operations </li></ul></ul><ul><ul><li>- Financial due diligence (turnover, credit rating, strength of Balance Sheet etc.) </li></ul></ul><ul><ul><li>- Number of employees </li></ul></ul><ul><ul><li>- Companies House data </li></ul></ul><ul><ul><li>- Trade Directories </li></ul></ul><ul><ul><li>- Websites </li></ul></ul><ul><li>Approach each organisation and identify the relevant decision maker for evaluating external IP / licensing offers: </li></ul><ul><ul><li>- Head of R&D </li></ul></ul><ul><ul><li>- Head of Sales and Marketing </li></ul></ul><ul><ul><li>- Product Development Function </li></ul></ul><ul><ul><li>- Likely to be Managing Director in owner-managed or small businesses </li></ul></ul>
  26. 26. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Go to Market Strategy: Licensing </li></ul><ul><li>Approach that decision maker and request an NDA is signed before sending information </li></ul><ul><li>Prepare a licensing offer document that communicates the IP: </li></ul><ul><li>  </li></ul><ul><ul><li>- Basis of product/service/technology </li></ul></ul><ul><ul><li>- CAD drawings, technical data (dimensions, materials etc.) </li></ul></ul><ul><ul><li>Details of any patents, design registrations or trademarks (including filings and </li></ul></ul><ul><ul><li>coverage) </li></ul></ul><ul><ul><li>- Images / photography of any prototypes </li></ul></ul><ul><ul><li>- Investment into technology and R&D programme to date </li></ul></ul><ul><ul><li>Top-line data on level of market opportunity and potential revenue stream for </li></ul></ul><ul><ul><li>the licensee </li></ul></ul><ul><ul><li>- Set out how you expect to transact (level of exclusivity, territorial coverage) </li></ul></ul><ul><ul><li>- Invite further discussions </li></ul></ul>
  27. 27. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Go to Market Strategy: Licensing </li></ul><ul><li>Negotiate with your interested short-list and undertake due diligence: </li></ul><ul><ul><li>- How would they commercialise your IP? </li></ul></ul><ul><ul><li>- What price would they sell your IP at? </li></ul></ul><ul><ul><li>- What would the margins be within this out of which your royalty could be paid? </li></ul></ul><ul><ul><li>- What marketing effort would they invest in the IP? </li></ul></ul><ul><ul><li>- How and where would they sell and distribute your IP? </li></ul></ul><ul><ul><li>- What do they see as the potential application markets? </li></ul></ul><ul><ul><li>- What resource would they commit to this? (Sales force, personnel etc.) </li></ul></ul><ul><ul><li>- What aspects of the prototype would be altered for production? </li></ul></ul><ul><ul><li>- How quickly can the IP be commercialised and get to market? </li></ul></ul><ul><li>  </li></ul><ul><li>Expect considerable due diligence on you from them: </li></ul><ul><li>  </li></ul><ul><ul><li>- Demands for exclusivity </li></ul></ul><ul><ul><li>- Domain name registration </li></ul></ul><ul><ul><li>- Negotiations over royalties </li></ul></ul>
  28. 28. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Nature of Licensing Agreement </li></ul><ul><li>Exclusive or non-exclusive </li></ul><ul><li>Geographical license by territory </li></ul><ul><li>Sector or application market license </li></ul><ul><li>Term </li></ul>
  29. 29. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Negotiating Royalties for Licensing: Valuing IP </li></ul><ul><li>There are no hard and fast rules. Key considerations include: </li></ul><ul><li>Anticipated volume levels </li></ul><ul><li>Value of product and end user price (including margins) </li></ul><ul><li>Level of further investment licensee may need to make in R&D and </li></ul><ul><li>commercialisation (amortised over manufacturing) – i.e. how quickly can they </li></ul><ul><li>recover initial investment? </li></ul><ul><li>Ease of product imitation and strength of security on the IP (are competitors locked </li></ul><ul><li>out?) </li></ul><ul><li>Competitor products – is anyone else manufacturing or offering similar </li></ul><ul><li>products/services? </li></ul>
  30. 30. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Negotiating Royalties for Licensing: Valuing IP </li></ul><ul><li>Further considerations include: </li></ul><ul><li>Bear in mind a patent can be on a novel feature/component within a product so </li></ul><ul><li>there could still be similar products/services competing within a marketplace </li></ul><ul><li>Market conditions (price driven or value driven) </li></ul><ul><li>Royalties can range from 3% to 20% (rarely higher) </li></ul><ul><li>Higher end royalties tend to be associated with lower volume, high value products / </li></ul><ul><li>services or a major disruptive technological innovation </li></ul><ul><li>Lower end royalties tend to be associated with higher volume, lower value </li></ul><ul><li>products/services </li></ul><ul><li>The overall commercial transaction you negotiate also influences royalties (more </li></ul><ul><li>later) </li></ul>
  31. 31. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Tactics to Strengthen Your Negotiating Position to Increase Royalties </li></ul><ul><li>Value your IP strongly on the potential revenue opportunity for the licensee </li></ul><ul><li>(“business case selling”) </li></ul><ul><li>If the IP is a major innovation and no prior market exists, value strongly on other </li></ul><ul><li>trends, such as market and technological drivers (build your case positively) </li></ul><ul><li>Have your prototype as well developed as possible – (reduce the level of </li></ul><ul><li>expenditure likely to be incurred by the licensee and subsequently risk) </li></ul><ul><li>Ensure you are well prepared and knowledgeable on the technology and market </li></ul><ul><li>opportunity (this makes you more investible) </li></ul><ul><li>Know what concessions you’re prepared to grant (e.g. exclusivity / geographical </li></ul><ul><li>territories etc.) </li></ul><ul><li>Use an advisor – this is an investment, not a cost. Negotiating is a skill in its own </li></ul><ul><li>right. </li></ul>
  32. 32. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Considerations for Structuring Your Royalty Remuneration </li></ul><ul><li>Consider the following when structuring your deal: </li></ul><ul><li>Frequency of payments (quarterly, twice yearly, annually) </li></ul><ul><li>Seek minimum payments (irrespective of product sales) in addition to direct </li></ul><ul><li>royalties </li></ul><ul><li>Some licensors successfully negotiate an upfront license fee </li></ul>
  33. 33. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Protecting Your Position: Further Considerations </li></ul><ul><li>Document all negotiations and finalise an outline agreement into a Heads of Terms </li></ul><ul><li>document </li></ul><ul><li>Engage a specialist IP lawyer for the drafting of a Licensing Agreement </li></ul><ul><li>Grant initial trial period of 12 months – to be extended on review of sales levels </li></ul><ul><li>achieved by licensee. </li></ul><ul><li>This gives you an exit option in the event of poor performance. </li></ul><ul><li>Consider writing performance targets into the licensing agreement which the </li></ul><ul><li>extension of the relationship is dependent on. </li></ul><ul><li>Don’t expect returns immediately – the licensor is bringing a completely new </li></ul><ul><li>product, service or technology to market which takes time </li></ul>
  34. 34. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Building Your Value Proposition for a Scalable Business: Some Key Questions </li></ul><ul><li>Why should people buy from you if: </li></ul><ul><li>You aren't able to give them what they want? </li></ul><ul><li>You don’t understand their needs and wants? </li></ul><ul><li>You aren’t talking their language? </li></ul><ul><li>You competition is faster / smarter / cheaper? </li></ul>
  35. 35. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Manufacturing Mindset “ Sell What We Make” “ Make What Will Sell” How We Often Function How We Should Function Marketing Mindset
  36. 36. “ MORE OF THE SAME” Don’t be a “Karaoke Product”
  37. 37. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Development “ Blue Ocean Strategy”: DON’T COMPETE! Create Uncontested Market Space Creating Temporary Monopolies is Exactly What Businesses Aspire to do!
  38. 38. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS From Trademark to Trustmark What is your relevant and differentiated offer to your marketplace? BRAND VALUE Trademark Familiar Distinctive Identity Familiar Distinctive Identity Special Promise Brand Familiar Distinctive Identity Special Promise Authority Trustmark
  39. 39. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Developing Markets and Identifying Application Markets Your application markets will depend on your intended business model. Consider in what contexts your IP / Technology / Services can be used?
  40. 40. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Product Life Cycle This is the traditional view of the life cycle of a product from launch to decline:
  41. 41. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Product Life Cycle: The Reality This is how the 4 marketing strategies in the Ansoff Matrix are applied: £ TIME Market Penetration Product Life Extension New Product Development Market Development Diversification
  42. 42. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS <ul><li>Segmentation </li></ul><ul><li>Segmentation is about dividing a market into distinct groups that might warrant distinct products / services or marketing mixes. </li></ul><ul><li>Segmenting gives you: </li></ul><ul><li>The basis to choose where you will compete </li></ul><ul><li>The basis for identifying opportunities </li></ul><ul><li>The basis for developing competitive advantage </li></ul><ul><li>The basis for creating a superior value offering </li></ul><ul><li>The ability to anticipate unmet, unidentified or future needs of customers </li></ul>
  43. 43. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Market Segments and Strategic Options The Market Segments Strategy 1 Undifferentiated Strategy 2 Differentiated Strategy 3 Concentrated
  44. 44. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Generic Strategies
  45. 45. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Generic Strategies
  46. 46. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Pricing Strategies: The Danger of Price-Based Marketing <ul><li>Your frequency of “Deals” changes the customers reference point </li></ul><ul><li>How often you are on “Deal” damages your Reference Point </li></ul>Frequency of Price-Cutting or Price-Based Promotions Perceived Value / Reference Price
  47. 47. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Pricing Strategies: The Danger of Price-Based Marketing Frequency of Price-Cutting or Price-Based Promotions Sales Volume Increase <ul><li>The Greater the Frequency of “Deals”, the Lower the Height of the Deal Spike </li></ul>Average Sales Level “ The Cocaine Effect!”
  48. 48. NORTHUMBRIA COMMERCIAL ENTERPRISES INNOVATION CAMPUS Thanks for Listening ... Q&A Ross Golightly [email_address] Tel: 07984 379 558 / 0191 4604126 www.twitter.com/RossGolightly www.spheraconsulting.co.uk

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