2. Lecture Objectives
Definition of Entrepreneurship Marketing
Developing a Marketing Concept
Developing a Marketing Strategy – 4 ‘P’s
Entrepreneurial Marketing Plans
Entrepreneurs & the Internet
Globalisation
Strategic Alliance
ECD Oct 14/Lecture 8/ttl 2
3. Recommended Reading
• Donald F. Kuratko ENTREPRENEURSHIP –
THEORY, PROCESS AND PRACTICE, 9th Edition,
CENGAGE, Chp 4 & 10
ECD Oct 14/Lecture 8/ttl 3
4. Marketing is Civilised Warfare
• Marketing is as critical to new businesses as it
is for established ones.
• For the 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.
ECD Oct 14/Lecture 8/ttl 4
5. Two Definitions of
Entrepreneurial Marketing
O Proactive identification and exploitation of
opportunities to acquire and retain profitable
customers through innovative approaches to risk
management, resource leveraging and value
creation.
Restless pursuit of opportunity,
the obsession with the customer,
a focus on sales above all else.
ECD Oct 14/Lecture 8/ttl 5
7. Developing the Marketing Concept
O3 key elements:
O marketing philosophy,
O market segmentation and
O consumer behaviour
O A new venture should integrate all 3
elements when developing its marketing
concept & its approach to the market.
ECD Oct 14/Lecture 8/ttl 7
8. Developing the Marketing Concept –
Marketing Philosophy
O 3 distinct types of marketing philosophies exist among
new ventures:
O Production-driven philosophy: production is main
emphasis, sales follow after that.
O Sales-driven philosophy: focuses on personal selling
& advertising to persuade customers to buy
O Consumer-driven philosophy: discover consumer
preferences, desires and needs before production
actually begins
ECD Oct 14/Lecture 8/ttl 8
9. Developing the Marketing Concept –
Marketing Philosophy
O 3 major factors influence the choice of a marketing philosophy:
O Competitive pressure – intensity of competition will dictate
a new venture’s philosophy
O Entrepreneur’s background – range of skills and abilities
entrepreneurs possess varies greatly
O Short-term focus – a sales-driven philosophy may be
preferred due to short-term focus on clearing stocks and
generating sales.
O Consumer – driven philosophy most successful in the long run.
ECD Oct 14/Lecture 8/ttl 9
10. Developing the Marketing Concept
- Market Segmentation
O Market segmentation is the process of identifying a
specific set of characteristics that differentiate one group
of consumers from the rest (eg. wine lifestyle, eco-
tourists)
O Variables to analyse:
ODemographic variables include age group, marital
status, gender, occupation, income, location,
education level
OBenefit variables help to identify unsatisfied needs
that exist within this market. Eg price, overall value,
specific feature, ease-of-use
ECD Oct 14/Lecture 8/ttl 10
11. Developing the Marketing Concept
- Market Segmentation
ECD Oct 14/Lecture 8/ttl 11
MARKET
SEGMENT
CHARACTERISTICS of
each segment Eg
-Ritual-
oriented
conspicuous
wine
enthusiasts
-Purposeful
inconspicuous
premium wine
drinkers
- Image
oriented
wine
drinkers
-Basic
wine
drinkers
-Enjoyment-
oriented
social wine
drinkers
To identify specific
market segments,
entrepreneurs
need to analyse
several variables,
namely
DEMOGRAPHIC &
BENEFIT VARIABLES.
Demographic
variables include
Age, marital status,
gender, income,
occupation.
Benefit variables
include
Convenience, cost,
style
trends.
13. Developing the Marketing Concept
- Define a Target Market
O Target market
O is the part of the total market toward which
promotional efforts are concentrated.
O Determine whether any of those market segments
are large enough to generate profit.
O Align your marketing efforts to reach that segment of
the market profitably.
ECD Oct 14/Lecture 8/ttl 13
14. Developing the Marketing Concept
- Choosing Target Markets
O Identify the characteristics of 2 or more segments
of the total market.
Eg Ecotourists in Australia have been segmented
into:
- ‘harder’ ecotourists, who reflect a high level of
environmental commitment.
- ‘softer’ ecotourists, who are much less
committed .
- ‘structured’ ecotourists, who reveal a strong
pattern of commitment but a level of desire for
interpretation, escorted tours & services usually more
associated with mass tourism.
ECD Oct 14/Lecture 8/ttl 14
15. Developing the Marketing Concept
- Seeking a Competitive Edge
Competitive Edge (Advantage):
A particular characteristic that makes one firm more
attractive than another.
This includes quality, reliability, integrity, and service, as
well as lower prices.
For small firms - must find one area in which to compete
Eg. more personal service/ customised services.
ECD Oct 14/Lecture 8/ttl 15
16. Developing the Marketing Concept
– Consumer Behaviour
O Defined by many types & patterns of consumer
characteristics. Focus on:
O Personal characteristics Eg income, occupation,
education, housing
O Psychological characteristics Eg nature of needs,
perceptions, self –concept
5 main types of consumers: innovators, early adopters,
early majority, late majority & laggards
Link these characteristics to buying trends.
(Refer to Tables 10.4, 10.5)
ECD Oct 14/Lecture 8/ttl 16
17. ECD Oct 14/Lecture 8/ttl 17
Developing a Marketing Strategy
- Marketing Mix (4 Ps)
The marketing mix principles are controllable variables which
have to be carefully managed and must meet the needs of the
defined target group.
All elements of the mix are linked and must support each other.
Product Price
PromotionPlace
18. The 4 Ps & 4 Cs of Marketing Mix
ECD Oct 14/Lecture 8/ttl
Marketing: An Introduction, An Asian Perspective by Armstrong, Kotler & da Silv
Implication for marketers:
We need to empathize with the customer.The marketing mix
represent the tools we use to achieve results. Customer outcomes such
as solutions, cost, convenience and communication are the keys to
marketing success!
4 P’s - Seller’s View
Product
Price
Place
Promotion
4 C’s - Buyer’sView
Customer solution
Customer cost
Convenience
Communication
19. The 4 Ps of the Marketing Mix
ECD Oct 14/Lecture 8/ttl
Marketing: An Introduction, An Asian Perspective by Armstrong, Kotler & da Silva
Your decision for each
element has to be consistent
with the intended positioning
20. Marketing Mix: 4 Ps - Product
ECD Oct 14/Lecture 8/ttl
20
Marketing: An Introduction, An Asian Perspective by Armstrong, Kotler & da Silva
22. ECD Oct 14/Lecture 8/ttl
22
Selecting the Price
Demand Based
•Penetration
•Skimming
•Sliding Down
Cost Based
•Standard
Markup or
•Cost Plus
Competition
Based
•Follow the
Leader
•Loss Leader
Psychological
Based
•Odd-Even
•Prestige
Marketing Mix: 4 Ps - Pricing
Further reading: Chapter
10, Table 10.10 pg 368
23. ECD Oct 14/Lecture 8/ttl 23
Marketing Mix: 4 Ps - Pricing
Sliding:
A short term pricing
strategy that assumes
that competition will
eventually emerge.
Economies of scale
and technological
advancement later
helps to lower price
(eg. computers).
Skimming:
introduces a new
product with little or
no competition.
Price well above the
total unit cost.
To appeal to the
segment of the
market that is not
price-sensitive.
Reinforces the
unique, prestigious
image. (e.g. designer
goods)
Penetration:
low-priced goods
into a market where
no elite segment
exists, eg . soap,
shampoo and light
bulbs.
Price set just above
the unit cost.
24. Pricing Strategies
Factors affecting the pricing decision
Competitive pressure
Availability of sufficient supply
Cyclical changes in demand- festive seasons – high
demand, can lower pricing
Distribution costs
Product life cycle’s stage
Changes in production costs
Prevailing economic conditions
Customer services provided by the seller
Amount of promotion done
Market’s buying power
ECD Oct 14/Lecture 8/ttl 24
25. Pricing for Product Life Cycle
ECD Oct 14/Lecture 8/ttl 25
PRODUCT LIFE CYCLE
STAGE
PRICING STRATEGY REASONS/EFFECTS
INTRODUCTORY STAGE:
UNIQUE PRODUCT
SKIMMING – deliberately
setting a high price to
maximise profits
Initial price set high to establish a
quality image, to provide capital
to offset development costs & to
allow for future price reductions
to handle competition
INTRODUCTORY STAGE:
NON - UNIQUE PRODUCT
PENETRATION - setting prices
at such a low level that
products are sold at a loss
Allows quick gains in market
share by setting a price below
competitors’ prices
GROWTH STAGE CONSUMER PRICING – combining
penetration & competitive pricing
to gain market share; depends on
consumer’s perceived value of
product
Depends on the no. of potential
competitors, size of total market &
distribution of that market
MATURITY STAGE DEMAND-ORIENTED PRICING – a
flexible strategy that bases pricing
decisions on the demand level for
the product
Sales growth declines; customers
are very price sensitive
DECLINE STAGE LOSS LEADER PRICING – pricing
the product below cost in an
attempt to attract customers to
other products
Product possesses little or no
attraction to customers; the idea
is to have low prices bring
customers to newer product lines
26. ECD Oct 14/Lecture 8/ttl
26
Marketing Mix: 4 Ps - Place
Manufacturer
Consumer
Manufacturer
Retailer
Consumer
Direct Distribution Indirect Distribution
Need to consider how to get the goods to sell, as well as how
to actually deliver into the customer’s hands.
Eg.Dell
Eg.?
What about distributing via the internet?
30. ECD Oct 14/Lecture 8/ttl
30
Marketing Mix: 4 Ps - Promotion
Promotional Mix
Advertising
Public Relations
Sales Promotion
Personal Selling
A successful product or service means nothing unless the
benefit of such a service can be communicated clearly to the
target market. An organisation’s promotional mix can consist of:
31. Selecting the Right Advertising Media
Advantages & Disadvantages?
ECD Oct 14/Lecture 8/ttl 31
T.V. Radio
Internet
Magazines
Outdoor
Newspapers
Direct Mail
Marketing Mix: 4 Ps - Promotion
43. Entrepreneurial / Guerilla Marketing Plans
O Differences between guerilla marketing & traditional resource
marketing:
O Guerilla marketing is ‘revenue driven’ ; Traditional marketing is
‘cost driven’.
O Guerilla marketing concentrates on sales instead of brand
recognition/market share.
O New ventures usually suffer from ‘resource poverty’. Hence
‘speed’ is key.
O Primary investment of marketing is time, energy & imagination
instead of money (traditional marketing ).
O Passion vs paid employees.
O Focus is on building relationships and getting larger transactions.
ECD Oct 14/Lecture 8/ttl 43
44. Entrepreneurial Marketing Plans
O Entrepreneurial Marketing Mix
• Product or Customer?
• Price or Value Added?
• Place – Do you need a place?
• Promotion versus Guerrilla Tactics –how to
generate maximum impact with minimum
resources
ECD Oct 14/Lecture 8/ttl 44
45. Guerrilla Marketing Tactics
ECD Oct 14/Lecture 8/ttl
45
Webzine
Email newsletter, SMS-es
Send e–cards to clients on special
dates
Participate in online newsgroups
and forums
Speeches to companies, schools or
organisations
Trade sets of business cards with
other businesses
Make yourself newsworthy
Do something
environmentally conscious
Work with local media
Give free samples, trials,
consultations, etc
Do whatever your competition
isn't doing
48. Importance of Relationships
O Relationship marketing
Building longer term relationships with customers
Understanding their needs as they go through their life
cycles
Providing a range of products or services to existing
customers as they need them
O Most appropriate for relatively high–value consumer products
When the costs of switching are high Eg bank accounts
When customer involvement is high
OCultivate loyal customers
They may help to promote company’s products/service
ECD Oct 14/Lecture 8/ttl 48
49. Five–step Entrepreneurial
Marketing Plans
1. Appraise strengths and weaknesses, emphasising
factors that will contribute to the firm’s ‘competitive
edge’
2. Develop marketing objectives and specific sales plans
3. Develop product/service strategies
4. Develop marketing strategies
5. Determine a pricing structure
ECD Oct 14/Lecture 8/ttl 49
50. Marketing on the Internet
O Allows you to increase your presence and brand equity in
the marketplace.
O Allows your company to cultivate new customers around
the world.
O Allows website visitors to match their needs with the
offerings of the company.
O Improves customer service by allowing customers to serve
themselves when and where they choose.
O Information traditionally collected via surveys, interviews,
focus groups can now be collected at a fraction of the
cost.
ECD Oct 14/Lecture 8/ttl 50
52. Internet’s Effects on Industries
O Music industry
O Downloading MP3s
O Banking industry
O Online banking is now the fastest–growing Internet
activity
O eBay.com effect on prices
O Buyers and sellers look at prices online
O Online Shopping Sprees
O Blog Shops
O Think of how the internet will affect your business!!
ECD Oct 14/Lecture 8/ttl 52
53. Globalisation
ECD Oct 14/Lecture 8/ttl
53
Import / Export
Licensing /
Franchising
Joint Venture
Or
Direct
Foreign
Investment
How to go
regional/
international?
54. Strategic Alliances
A Strategic Alliance is a collaboration leveraging the
strengths of two or more organisations to achieve
strategic goals. It involves long-term commitment.
It is a formal relationship, short of a merger or
acquisition, between two companies, form for the
purpose of gaining synergies.
When 1 + 1 = 3
ECD Oct 14/Lecture 8/ttl 54
56. Strategic Alliances
ECD Oct 14/Lecture 8/ttl 56
Symantec wants to sell more Anti-Virus software and Dell
wants to sell more computers.
They create a strategic alliance by bundling them together
and selling them at a discount through the same website.
Members include Singapore Airline, Air China, Swiss Air, All
Nippon Airway, Air New Zealand, Thai Airway, Lufthansa…
Honor each others ticket, code sharing, share each others
lounges, etc
57. Strategic Alliances
Advantages:
ORespond quickly to new challenges &
opportunities
OCombine core competencies Eg Shell, 7-11
OGain financial leverage
OAccess new technologies Eg Sony Ericsson
OImprove research and product development
ODecrease time to market
OEnhance marketing and sales distribution
Eg Apple, Nike
OReach new markets
ECD Oct 14/Lecture 8/ttl 57
58. Strategic Alliances
Disadvantages:
OLack of Control
OManaged through coordination and persuasion.
(A greater potential for risk and uncertainty)
ECD Oct 14/Lecture 8/ttl 58
60. Strategic Alliances
1. Assess your needs - gap analysis, corporate culture,
management support.
2. Identify potential partners.
3. Evaluate strategic fit – core capabilities, alliance
experience, compatibility of corporate culture
4. Develop an operational plan - financial & staff
resources
ECD Oct 14/Lecture 8/ttl 60
61. Strategic Alliances
5. Negotiate the contract – be as specific as possible.
6. Ensure operational integration – teething
problems, communication, inputs and outputs.
7. Measure the results – against set short and long
term goals based on multiple criteria.
8. Adapt to changes – consider improvements or set
new goals if alliance delivers value, otherwise,
consider exit strategies.
ECD Oct 14/Lecture 8/ttl 61
