Transcript Chapter 1:The Foundations of Entrepreneurship

CHAPTER
Copyright
© 2011 Pearson Education
8

Marketing
◦ The process of creating and delivering desired goods
and services to customers.
◦ Involves all of the activities associated with winning
and retaining loyal customers.

National Federation of Independent
Business Study
◦ 55% of small business owners say they do not need
marketing because their products and services “sell
themselves.”
Ch. 8: Building a Powerful Marketing Plan
8-2
Guerrilla marketing strategies:
◦ Are unconventional, low-cost, and
creative marketing techniques that
allow a small company to realize a
greater return from its marketing
investment than do larger rivals.
◦ Do not require large amounts of
money to be effective – just creativity.
Ch. 8: Building a Powerful Marketing Plan
8-3
1. Pinpoints the specific target markets the
company will serve.
2. Determines customer needs and wants
through market research.
3. Analyzes a firm’s competitive
advantages and creates a marketing
strategy to build a competitive edge.
4. Helps to create a marketing mix that
meets customer needs and wants.
Ch. 8: Building a Powerful Marketing Plan
8-4





One objective of market research: Pinpoint the
company's target market, the specific group of
customers at whom the company aims its
products or services.
Marketing strategy must be built on clear
definition of a company’s target customers.
Examples: Great Call and Lexus
of Palm Beach
Target customer must permeate the entire business –
merchandise sold, background music, layout, décor,
and other features.
Without a clear image of its target market,
a small company tries to reach almost
everyone and ends up appealing to few.
Ch. 8: Building a Powerful Marketing Plan
8-5
Market research is the vehicle for gathering
the information that serves as the
foundation for the marketing plan.
How to Conduct Market Research:
1. Define the problem.
2. Collect the data.
 Individualized (one-to-one)
marketing
 Data mining
3. Analyze and interpret the data.
4. Draw conclusions and act

Ch. 8: Building a Powerful Marketing Plan
8-6
Identify your best customers,
never passing up the
opportunity to get their names.
Collect information on these
customers, linking their
identities to their transactions.
Calculate the long-term value
of customers so you know
which ones are most desirable
(and most profitable).
Enhance your products and
services by giving customers
information about them and how
to use them.
See customer complaints
for what they are - a
chance to improve
your service and
quality. Encourage
complaints and then
fix them!
Successful
One-to-One
Marketing
Make sure your company’s
product and service quality
will astonish your customers.
Know what your customers’
buying cycle is and time your
marketing efforts to coincide
with it - “just-in-time
marketing.”
Ch. 8: Building a Powerful Marketing
Plan
Source: Adapted from Susan Greco,
“The Road to One-to-One Marketing,”
Inc., October 1995, pp. 56-66.
87





Find a niche and fill it.
Use the power of publicity
Don’t just sell; entertain!
◦ “Entertailing”
Strive to be unique.
Connect with customers on an emotional
level.
◦ Build trust
◦ Define a unique selling proposition (USP)
Ch. 8: Building a Powerful Marketing
Plan
8-8




A key customer benefit of a product or
service that sets it apart from its
competition.
Answers key customer question:
“What’s in it for me?”
Consider intangible or psychological
benefits as well as tangible ones.
Communicate your USP to your
customers often.
Ch. 8: Building a Powerful Marketing Plan
8-9
FIGURE 8.1 The Connection between Branding and a USP
Source: Based on Brandsavvy, Highlands Ranch, Colorado
Ch. 8: Building a Powerful Marketing Plan
8 - 10



Social networks sites, such as Facebook
and MySpace, allow entrepreneurs to
connect with potential and existing
customers at little or no cost.
More than half of Facebook users are
over the age of 25.
These sites now offer business survey
tools and advertising functions
for promotional purposes.
Ch. 8: Building a Powerful Marketing Plan
8 - 11
An estimated 113 million blogs exist
with 5,000 of them from businesses.
 Economical and effective online
communication.
 Blog Guidelines:

◦ Be honest, balanced, and interesting.
◦ Post blog entries consistently so that readers
have a reason to return.
◦ Ask customers for feedback.
Ch. 8: Building a Powerful Marketing Plan
8 - 12


Study: 19% of Internet users watch
online videos every day.
Online video guidelines:
◦
◦
◦
◦
◦
Think “edutainment.”
Be funny.
Connect with current events.
Involve customers.
Keep it short.
Ch. 8: Building a Powerful Marketing Plan
8 - 13
Only 6% of customers who experience a
problem contact the company to complain.



31% tell family members, friends, and
colleagues about their negative experience.
6% of those people tell their “horror stories” to
six or more people.
For every 100% of customers who have
negative experiences with a business,
the company stands to lose
32 to 36 current customers
or potential customers.
Ch. 8: Building a Powerful Marketing Plan
8 - 14
(continued)



Because 20% of a typical company’s customers
account for about 80% of its sales, no business
can afford to alienate its best and most
profitable customers and survive!
Research shows that repeat customers spend
67% more than new customers.
Attracting new customers costs the
typical business seven to nine times
as much as keeping existing customers.
Ch. 8: Building a Powerful Marketing Plan
8 - 15



Study: 60% of customers who change
suppliers do so because of problems with a
company’s products or services.
World-class companies treat quality as a
strategic objective, an integral part of
company culture.
The philosophy of Total Quality
Management (TQM):
◦ Quality in the product or service itself.
◦ Quality in every aspect of the business and its
relationship with the customer.
◦ Continuous improvement in quality.
Ch. 8: Building a Powerful Marketing Plan
8 - 16

Reliability (average time between breakdowns)
Durability (how long an item lasts)
Ease of use
Known or trusted brand name
Low price
Tangibles - equipment, facilities, people
Reliability - doing what you say you will do
Responsiveness - promptness

Assurance and empathy -







in helping customers
conveying a caring attitude
Ch. 8: Building a Powerful Marketing Plan
8 - 17
The average U.S. work week is 42.5 hours,
an increase from 37.5 hours in 2003.
 Is your business conveniently located
near customers?
 Are your business hours suitable to your
customers?
 Would customers appreciate pickup and
delivery services?
 Do you make it easy for customers to
buy on credit or with credit cards?
Ch. 8: Building a Powerful Marketing Plan
8 - 18
(continued)





Are your employees trained to handle
business transactions quickly, efficiently,
and politely?
Does your company offer “extras” that would
make customers’ easier?
Can you bundle existing products to make it
easier for customers to use them?
Can you adapt existing products to make
them more convenient for customers?
Does your company handle telephone calls
quickly and efficiently?
Ch. 8: Building a Powerful Marketing Plan
8 - 19

Innovation
◦ The key to future success.
◦ One of the greatest strengths of
entrepreneurs. It shows up in the new
products, techniques, and unusual
approaches they introduce.

Entrepreneurs often create new
products and services by focusing
their efforts on one area and by using
their size and flexibility to their
advantage.
Ch. 8: Building a Powerful Marketing Plan
8 - 20
Goal: To achieve customer astonishment!

Listen to customers.

Define “superior service.”

Set standards and measure performance.

Examine your company’s service cycle.

Hire the right employees.

Train employees to deliver superior service.

Empower employees to offer superior service.

Treat employees with respect and show them how valuable they are.

Use technology to provide improved service.

Use mystery shoppers to measure customer service

Reward superior service.

Get top managers’ support.

View customer service as an investment, not an expense.
Ch. 8: Building a Powerful Marketing Plan
8 - 21





Use principles of time compression management (TCM):
◦ Speed new products to market
◦ Shorten customer response time in manufacturing and delivery
◦ Reduce the administrative time required to fill an order.
Re-engineer the process rather than try to do the same
thing - only faster.
Create cross-functional teams of workers and empower
them to attack and solve problems.
Set aggressive goals for production and stick to the
schedule.
Rethink the supply chain.

Instill speed in the company culture.

Use technology to find shortcuts wherever possible.

Put the Internet to work for you.
Ch. 8: Building a Powerful Marketing Plan
8 - 22
Product
Place
Price
Promotion
Ch. 8: Building a Powerful Marketing Plan
8 - 23
(continued)





Introductory stage
Growth and acceptance stage
Maturity and competition stage
Market saturation stage
Product decline stage
High
High
High
Costs
Costs
Costs
Sales
Sales
Climb
Climb
Profits
Profits
Profits
Peak
Peak
Peak
Sale
Sales
Sales
s
Peak
Peak
Peak
Ch. 8: Building a Powerful Marketing Plan
Sales &
Profits
Fall
8 - 24
FIGURE 8.4 Time between Introduction of Products
Ch. 8: Building a Powerful Marketing
Plan
825
Manufacturer
Consumer
Manufacturer
Manufacturer
Wholesaler
Manufacturer
Wholesaler
Wholesaler
Retailer
Consumer
Retailer
Consumer
Retailer
Consumer
Ch. 8: Building a Powerful Marketing Plan
8 - 26

A key factor in the decision to buy

Focus attention on non-price competition
◦ Free trial offers
◦ Free delivery
◦ Lengthy warranties
◦ Money back guarantees
Ch. 8: Building a Powerful Marketing Plan
8 - 27




Goal: To inform and persuade.
Through advertising and other
communication techniques.
Create an image.
“Marketing is not a battle of products; it is a
battle of perceptions.”
Ch. 8: Building a Powerful Marketing Plan
8 - 28



A guerrilla marketing plan offers the
entrepreneur significant benefits.
Target marketing is key.
Create a competitive and edge through
customer focus, quality, convenience,
innovation,
service and speed.
Ch. 8: Building a Powerful Marketing Plan
8 - 29