Transcript Startup Project - Jonathan Etheart

Special Issue in Marketing:
Startup Marketing
Group 3: Leave Behind
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan &
Isaac Sutton
Startup Marketing Challenges
Secondary Research
• Many startup companies fail for a variety of reasons
• In the first quarter of 2010 there was a net loss of
96,000 small companies; in 2009, the net loss was
400,0001
Source: ZIMMERMAN, EILENE. "How Six Companies Failed to Survive 2010." New York Times. 5 Jan.
2011. Web. <http://www.nytimes.com/2011/01/06/business/smallbusiness/06sbiz.html?ref=smallbusiness>.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Startup Marketing Challenges
Secondary Research Cont’d.
• According to the New York Times Article, “How
Six Companies Failed to Survive 2010”, there are
several trends that surround startup marketing issues
and challenges that small companies face in general.
• The article considers six different small, startup
companies, where it was at its peak and what went
wrong.
• Some of these challenges, which we will summarize
in further detail, range from steep competition to
financial obstacles
Source: ZIMMERMAN, EILENE. "How Six Companies Failed to Survive 2010." New York Times. 5
Jan. 2011. Web.
<http://www.nytimes.com/2011/01/06/business/smallbusiness/06sbiz.html?ref=smallbusiness>.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Startup Marketing Challenges
6 Companies Summarized
•
Wesabe’s Challenge
•
•
Gotham Concierge’s Challenge
•
•
Poor financial decisions coupled with the external environmental forces like the bankruptcy
filing of Lehman Brothers
Varvitsiotis Architecture’s Challenge
•
•
Too much money was spent on enhanced functionality; in the words of entrepreneur/founder Don
Milley, “All the bells and whistles diluted our premise…
Large Format Digital’s Challenge
•
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External forces (stock market/home price trouble) led to client cut-back. This, coupled with ineffective
excess marketing efforts, made for financial troubles
iParents.com’s Challenge
•
•
Competitor, Mint.com, entered the market and with a better name, design, and ease of use, stole their
consumer base
External forces like the stock market fall led to clients canceling projects; increased
competition then led to their ultimate failure
Petite Palate’s Challenge
•
Could not secure investors and had difficulty getting products to their market
Source: ZIMMERMAN, EILENE. "How Six Companies Failed to Survive 2010." New York Times. 5
Jan. 2011. Web.
<http://www.nytimes.com/2011/01/06/business/smallbusiness/06sbiz.html?ref=smallbusiness>.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Startup Marketing Challenges
Common Mistakes
• According to a Fast Company Article, entitled “10
Common Mistakes that Startups and Small
Companies Make”, startups have small margins for
error.
• The article summarizes 10 key mistakes that startups
make; if made early on, it is possible that the
company, like the ones discussed in the NYT article,
will fail
Source: Lavenda, David. "10 Common Mistakes That Startup and Small Companies Make | Fast Company."
FastCompany. 8 Sept. 2009. <http://www.fastcompany.com/blog/david-lavenda/whatever-it-takes/10-common-mistakesstartupsmall-companies-make>.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Startup Marketing Challenges
Common Mistakes Cont’d.
•
Overestimating Enthusiasm for Product/Service
•
Not Validating Market Demand
•
Not Engaging With Consumers Early Enough
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Overestimating Product/Service’s Uniqueness
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Underestimating Effort Needed to Build Product
•
Hiring Wrong People
•
Not Focusing
•
Not Pricing Correctly
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Not Having Long-term Vision that Scales
Source: Lavenda, David. "10 Common Mistakes That Startup and Small Companies Make | Fast
Company." FastCompany. 8 Sept. 2009. <http://www.fastcompany.com/blog/david-lavenda/whatever-it-takes/10common-mistakes-startupsmall-companies-make>.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Secondary Research
Recommendations
• Though it is important for a startup to even have all the
basics, like a logo, a website and business cards1, it is of
the utmost importance for a startup to develop a
marketing plan
• “Developing a Strategic Marketing Plan”, an article on
StartupNation, discusses that marketing plans are not for
large corporations alone
• Marketing plans help startups better understand their
business, customers and strategy for success
• The article states that writing a marketing plan should
become a yearly ritual for a startup2
1 "StartUp Package." Getting Your Business Going - Startups Marketing. 2010. <http://www.startupsmarketing.com/>.
2 Marcella, Donna. "Develop a Strategic Marketing Plan." StartupNation. <http://www.startupnation.com/businessarticles/1263/1/strategic-marketing-plan.asp>.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Secondary Research
Recommendations Cont’d.
•
Overview of Summary
• Describes business and major points of plan
•
Situation Analysis
• Detailed assessment of market, competitors, opportunities and
challenges
•
Marketing Strategy
• Specific revenue goals and strategy for undertaking situation analysis
•
Marketing Tactics
• Action plan for executing strategy
•
Marketing Budget and Timeline
• Projected costs and timeline related to major marketing tactics
SOURCE: Marcella, Donna. "Develop a Strategic Marketing Plan." StartupNation.
<http://www.startupnation.com/business-articles/1263/1/strategic-marketing-plan.asp>.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Interview 1: Transparent
Health Network Takeaways
• Transparent Health Network provides access to
affordable health care for uninsured employees.
• The company was founded on the belief that
health insurance is too costly for many
Americans.
• Transparent Health built it’s own network of
Doctors, Pharmacies, and other Services.
• Services are currently offered in New York and
Atlanta.
Source: Interview with Jonathan Etheart. Interview. February 18 2011.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Key Differentiators for
Transparent Health
•
Custom Built network of over 6000 providers in the New York Metro and Atlanta areas, in over
70 specialties
•
Laboratories
•
Pharmacy
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$6.99 for a 30-day supply and $12.99 for a 90-day supply of over 500 generics at participating
Rite Aid pharmacies
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Deep discounts on other generic and brand name prescriptions at Rite Aid and over 50,000
participating pharmacies
•
Get 20% off Rite Aid Brand products every day
•
Price lookup system that allow our members to go to our site online and look up specific prices
for procedures, so they have an idea of what to pay before they get there.
•
Provider Lookup – So you can get all of the contact information from every doctor in our
network, within a 5, 10, 25 mile radius of your house.
•
Hospital Advocate line – to navigate through the red tape at the hospital.
•
24 Hour Nurse Hotline
Source: Interview with Jonathan Etheart. Interview. February 18 2011.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Main Challenges for
Transparent Health
• Transparent Health faces similar challenges to other
start-up companies including:
• Initial finances
• Customer Growth and Sustainability
• Current economic times and customer
frugality
• Getting the end consumer to understand
the value of the product.
Source: Interview with Jonathan Etheart. Interview. February 18 2011.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Strategies Implemented to
Address Challenges
• Brand Equity via Newspaper articles,
radio spots, print media, and insurance
brokers.
• Developing a true understanding of what
the customer, in this case the average
uninsured American wants and needs.
• Attractive Pricing Strategies and
appealing customer benefits.
Source: Interview with Jonathan Etheart. Interview. February 18 2011.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Interview 2: Royal Footwear
NYC
• Royal Footwear NYC provides affordable/stylish
footwear to retailers nationwide
• The company was started 18 months ago by two
entrepreneurs with an eye in fashionable ladies
footwear
• Royal Footwear has built an amazing distribution
channel with retail chain stores as well as cruise lines
Source: Cheik, Jack. Interview with Isaac Sutton. Interview. New York. 1 March 2011
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Royal Footwear Challenges &
Solutions
Challenges
1.
2.
3.
4.
Financing the business and
finding the right terms to the
agreement
Meeting sales quotas for
licensing companies
Up keeping high quality of
product
Collecting payments from
major retail chains
Solutions
1.
2.
3.
4.
Create relationships with banks in
order to finance the company when
cash is at a low
Creating a marketing technique in
which retailers will adhere too or
offer retailers better payment terms
Products are periodically checked
before shipment to the US
Discuss terms with retailers offering
incentive for early payment or find
a bank that will factor the order
Source: Cheik, Jack. Interview with Isaac Sutton. Interview. New York. 1 March 2011
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Royal Footwear SWOT
Analysis
Strengths
• Customer Service
• Affordable Pricing
• Stylish Products
• Licensed Products
Opportunities
• To create new divisions
• Expand internationally
• Increase volume of sales
Weakness
• Marketing inefficiency
• Easy to knock off styles
• High fixed cost
Threats
• Non-payment from retailers
• Chargeback's
• Financing growth
• Increase in production cost
Source: Cheik, Jack. Interview with Isaac Sutton. Interview. New York. 1 March 2011
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Interview 3: 10Ton
We tell stories, with film, on the web and tv.
“If I was young, I would start a company that focused on the online video
market – because it will be important.” –Eric Schmidt, Google CEO, 2001
•10Ton is a video production and development company that ultimately provides a seamless storyworld, with believable characters and compelling stories
•CONSUMERS: Agencies, Networks, Studios
•DEVELOPMENT:
•What is the pay-off of the project?
•How does the concept match the mission and the medium, or many different media?
•Is there Brand Integration?
•Is there a Web Element?
•Talent Attachments?
•How is the target demographic going to use the content and on what platforms?
•PRODUCTION:
•10Ton provides Vision, Management, Personal Understanding and Technical Acumen
•Details, Deals, Technology, Talent
•Telling the Story, and Beat-By-Beat, taking the viewer on an emotional journey
Source: Chang, Chris. Interview with Nicholas Clar. Interview. New York. 3 March 2011
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
10Ton’s Challenges &
Solutions
We tell stories, with film, on the web and tv.
10Ton’s CHALLENGES:
•Client Acquisition
•Costs
•Amount of money flow directly
dependant on number and types of
clients
•Non-Traditional Business Model
•Company intrinsically no value
•“Loan-Out”
•Money made is “profit” against
project costs
•Entertainment Business
•Crazy and Fickle place
•Unpredictability in the industry
•Competition
•Largely focused on bigger OR smaller
projects
10Ton’s SOLUTIONS:
•Client Acquisition
•Open Market—No competition
•Clients without knowledge, or little interest
in making online content
•Began networking events: “Big Screen
Little Screen”
•Non-Traditional Business Model
•Persistence/Passion/Patience
•Obtaining clients with good lines of
credit
•Trial and Error
•Entertainment Business
•Continual involvement in NY/LA film
communities
•Competition
•Open Market—No competition
•Unlimited growth potential
Source: Chang, Chris. Interview with Nicholas Clar. Interview. New York. 3 March 2011
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
10Ton’s Key Differentiators
•10Ton was founded in 2007.
•Began as consulting service
We tell stories, with film, on the web and tv.
•Difficult to make money—not how productions get
budgeted
•Fell back on being a production company
•One of the shared characteristics each founder/partner had experience in
•Wide open market at the time
•No established competition
•Poorly defined industry
•More inventing a niche as opposed to carving one out
•Building Brand Equity
•Industry a very social space
•Brining a real community to online video, brings both partners and visibility
•Big Screen Little Screen
•First and now number one web-video content meet-up/mixer in NYC
•Helped develop partnerships with Digitas, Tubefilter, Producers Guild of America
•Current State
•Big clients
•Disney, Viacom, Paramount
•Differentiation
•Developed expertise in the online space
Source: Chang, Chris. Interview with Nicholas Clar. Interview. New York. 3 March 2011
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Developing a Strategic
Marketing Plan for a Startup
•Overview/Summary
•What is your Mission Statement?
•Describe your business and bullet plans you wish to accomplish
•Situation Analysis
•The foundation of your marketing plan
•Market assessment
•Competition
•SWOT
•Marketing Strategy
•Revenue goals
•Plan goals
•Strategy to achieve set goals
•Includes Marketing Mix – The four P’s
•Marketing Tactics
•Detailed account of how to accomplish goals
•Advertising? PR? Viral marketing? Event attendance/participation?
•Justify strategy
•Benefits? Revenue Streams? Costs?
•Marketing Budget/Timeline
•Provide detail accounts of finances
•Check accounts to compare and contrast with set plans on monthly basis
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Startup Marketing Recommendations:
The Basics
Situation Analysis measures the
assessment of the current performance,
marketing conditions, needs of
customers, and competition and
positioning.3
Marketing Plan
Situation Analysis
Marketing Strategy
Current Performance
Market Share
Market Demand
Customer Needs
Competition &
Industry
Competitive Position &
Value
SWOT Analysis
3Best,
Roger J. Market-Based Management: Strategies for Growing Customer Value and Profitability. 5th ed. Upper Saddle River,
Pearson Education, 2009
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Recommendations Cont’d.
Current Performance
•Review KPIs, annual sales, margins, and profits and compare to previous years.
•Go a step further, compare performance metrics such as customer service, which
involves customer satisfaction, retention, profitability, and loyalty
•Above all, determine net promoter score
Net Promoter Score = Promoters – Detractors 1
Market Demand
Is a significant element to the situation analysis as it serves as appraising the demands of all
potential customers
Questions to ask: 4
What’s the current size of the market?
Where is it going?
What is the largest limit?
Determine segmentation through demographics and behaviors
4
ibid 418.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Recommendations Cont’d.
Competition & Industry
•Present summary of competition regarding profits as favorable or
unfavorable
•Summary will influence the performance of profits
Market Share
Calculate share performance
Market Share Index = (Promotion) x (Product) x (Price) x (Place) x (Service)5
•Measures how market share is achieved and how customers respond to
marketing strategy ( a major marketing indicator)
•The marketing mix (5 P’s) all effect market share
5
Ibid. 91.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Recommendations Cont’d.
Customer Needs 6
•Determine quality needs & positioning through
•Differentiation of branding, service, product, and cost of purchase
•Brand management strategies to determine brand assets and equity
•Brand and product line strategies
•Overall benefits index
Competitive Position & Value
•Create value map of customer benefits & value
•may also include customer satisfaction, customer loyalty, and marketing
channels
6
Ibid. 215.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
SWOT Analysis 7
STRENGTHS
Sources that put
company at an advantage
OPPORTUNITIES
Situations that increase
profit
7
WEAKNESSES
Situations that hinder
performance
THREATS
Factors that conflict
with performance
Ibid. 426.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Startup Marketing Recommendations:
Marketing Mix Strategy
• After Developing
a Strategic
Marketing Plan,
Start-ups must
develop tactics for
implementing
their strategic
vision.
• The Marketing
Mix covers the 4
P’s of Marketing
• Product
• Price
• Place
• Promotion
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Product Positioning
• This strategy combines Product and Price.
• The main goal is to increase perceived customer value.
• It’s important for any start-up venture to create clear & concise Value
Propositions .
• Market Segmentation- create customer groups in order to
focus efforts more effectively.
• Pricing Strategies- Create price points that are both
attractive and sensible for you and your customers.
• Research Competitor offerings in order to gain a better idea
of where you stand and how to go about attacking them.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Channel Strategy
•
This strategy deals directly
with how and where goods &
services will be sold.
•
After successfully segmenting
the market into channels, a
start-up can begin to develop
tactics to sell to and service
their customers.
•
Initial Stages: Use online
mediums and direct contact
to advertise and promote.
Also, generate positive word
of mouth via social media.
•
Growth Stages: Develop
formal sales and outreach
approaches. These can
include hiring sales people,
increasing the advertising
budget as revenue increases,
and creating a true service
culture where the customer
feels valued.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Communication Strategy
• The communication strategy includes all of the methods that
will be used to promote a company’s goods & services.
• Examples of Strategies:
•
•
•
•
•
•
•
•
Creating a functional website
Online Ads
Direct Mail
Free Trials
Social Media usage (Facebook, Twitter, Blogs, LinkedIN)
Solicit Press Coverage (after gaining positive feedback)
Salespeople & Account Managers (as you grow)
Use analytics to measure success of efforts.
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Startup Marketing Recommendation
Marketing Budget
Marketing per year should range from anywhere from 1 percent to
10 percent of sales depending on several factors
Marketing Budget Factors
•
How established is the business
• What industry the company is in?
• How much can the company really afford
• Turn over rate of the companies products
• The profit margin of its products
Source: Johnson, Hilary “How to build your marketing plan” Inc. September 27th 2010
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Startup Marketing
Recommendation Profit Plan
Every successful start-up company needs a well designed business
plan which consist of many factors
Profit Plan
•
Must follow the industry in which the company is currently
addressing
•
Consist of profit forecast for at least 3 years and monthly cashflow projections
•
Must have contingency plans to help with factors of competition
and new technology
•
Should contain the ideas of mixed lending, term lending and
overdrafts
Nicholas Clar, Jonathan Etheart, Carly Israel, Anjuli Lochan & Isaac Sutton
Bibliography
Best, Roger J. Market-Based Management: Strategies for Growing Customer Value and Profitability. 5th ed. Upper
Saddle River, Pearson Education, 2009
Beverly, Robert. Interview with Jonathan Etheart. Interview. New York, NY. February 18 2011.
Chang, Chris. Interview with Nicholas Clar. Interview. New York, NY. 3 March 2011
Cheika, Jack. Interview with Isaac Sutton. Interview. New York. 1 March 2011
Johnson, Hilary “How to build your marketing plan” Inc. September 27th 2010
Lavenda, David. "10 Common Mistakes That Startup and Small Companies Make | Fast Company." FastCompany. 8
Sept. 2009. <http://www.fastcompany.com/blog/david-lavenda/whatever-it-takes/10-common-mistakes-startupsmallcompanies-make>.
Marcella, Donna. "Develop a Strategic Marketing Plan." StartupNation. <http://www.startupnation.com/businessarticles/1263/1/strategic-marketing-plan.asp>.
ZIMMERMAN, EILENE. "How Six Companies Failed to Survive 2010." New York Times. 5 Jan. 2011. Web.
<http://www.nytimes.com/2011/01/06/business/smallbusiness/06sbiz.html?ref=smallbusiness>.