COEUR - BCM Business Creativity Module “Entrepreneurial Marketing Strategy” Andrew Turnbull ;...

COEUR - BCMBusiness Creativity Module

“Entrepreneurial Marketing Strategy”

Andrew Turnbull ; George Snajdar

Entrepreneurial Marketing Strategy

Entrepreneurial Marketing Strategy – Outline –

1. Introduction:Entrepreneurship, Marketing and Strategy

2. Defining the Offer

3. Defining the Market

4. Timing the Entry Into the Market


1.1) Introduction

What do you think about the following statement?

Every successful entrepreneurhas a detailed master plan

right from the start.

a) Of course, this is true.

b) Generally, yes. More than 2 out of 3 entrepreneurs will have some sort of documented business plan.

c) Not true. The vast majority of entrepreneursonly have a vague idea of how things will work out.

d) Not true. An entrepreneur is someone with a great vision, but totally incapable of organized thinking.


1.1) Introduction

c)Not true. The vast majority of entrepreneursonly have a vague idea of how things will work out.

Answer:

Reasons:• Rapid change, high uncertainty• Reluctance to commit to one single plan• Implicit planning emerges over time

(muddling through) Implications:• Strategic planning is a process.• Plan as much as you can, adapt as you proceed.


1.2) Definitions:Entre-/Europreneurship

Organisational level:

• Creativehumancapital

• Ability torecognizeopportunities

• Willingnessto take risks

Individual level:

• enthusiastic• committed

• professional• visionary• 'hungry‘

• open minded • ...

EuropeanDimension


1.2) Definitions:Marketing ...

• … is the management process responsible for identifying, anticipating and satisfying customer requirements profitably. (UK)

• … is the discipline of conceiving offers as a function of consumer preferences,and promoting their commercialization. (France)

• …is market-oriented management. (Germany)


1.2) The Importanceof Marketing: A Tale

New Economy (1995-2001):Shareholder Value Management

2002 Stock Market Crash

Only those dotcoms survivedthat had a sound customer base:

the True Economy .


1.2) Individual QualitiesComparison

The Entrepreneur… The Marketer…

…is creative, innovative, open for the unconventional

…tries constantly to stay abreast of competitors

…is ready to take risks, deal with uncertainty

…creates or seizes market opportunities

…works for sustainable business growth

…works to increase market share or build better customer relationships


1.2) Common Misconceptionsabout Marketing

Marketing is equivalent to advertising.

Marketing is just the icing on the cake.

Marketing is manipulation.


1.2) Characteristicsof Strategy

Strategy...

• involves making long/medium/short term plans

• is contingent on top-level goals

• means mission-critical decisions

• provides a frame for individual actions

• can result in a planning document


Strategic Balance

1.3) Combining Entrepreneurshipand Marketing Strategy

Entrepreneurial Challenge:How best to leverage limited resourcesto help the company grow?

MarketingChallenge:How to finda profitable and sustainablemarket position?


1.3) Combining Entrepreneurshipand Marketing Strategy

... at different implementation levels:• Individual:

Be a personality, a character and a creative thinker and salesperson!

• Organization:Grow your company and keep connectedwith the customer!

• Environment:Develop all stakeholder relations and treat customers as your most important stakeholders!


Com-petitors

Customers

1.3) Entrepreneurial Marketing: Strategic Challenges

• exceed customer expectations

• build trust, keep promises

Internal

• seize opportunities

• change the rules

• balance attack,defence and evasion

• manage processes

• show leadership


2.1) Defining the Offer:The Ansoff Matrix

existing newMarkets

newProducts

existing Penetration

Diversification

MarketDevelopment

ProductDevelopment


2.1) Defining the Offer:SWOT Analysis

favourable unfavourable

Strengths Weak-nesses

Opportu-nities

internal

externalThreats


2.1) Defining the Offer:PESTLE Analysis

• Political

• Economic

• Social

• Technological

• Legal

• Ecological

Environment(s)

Influence onBusiness Idea ?


2.2) Defining the Offer:The Basis For Differentiation

Product Price Promotion Place

Where is their basis

for differentiation ?


2.2) Defining the Offer:The Basis For Differentiation

Study published by Babson College, Boston, Mass., USA


2.3) “What’s In It For Me?”Customer Benefit Definition

product feature

generic benefit

meaningto customer

extended opening hours

convenience freedom

customer loyalty card

savings feelingmarket savvy

eco-certified products

good conscience

leading a meaningful life


2.4) USP — Formulate a Unique Selling Proposition

• "When it absolutely, positivelyhas to be there overnight" – FedEx

• "Connecting people" – Nokia

• "Because I'm worth it" - L'Oreal(“Parce que je le vaux bien”)

• “United Colors of Benetton”


3) Defining the Market – Marketing Style

Transactional Marketing Relationship Marketing

“make-and-sell” “sense-and-respond”

sales volume maximization customer value maximization

branding, advertising, distribution partners

personal selling, direct and database marketing

packaged goods individual services

one-time customer lifetime customer

high market share stable relationships


3) Defining the Market – Customer Profiling

Transactional Marketing:• Who is

your typical customer?

Build a demographic portrait:• Age bracket, cohort• Family life cycle stage • Education, occupation• Disposable income/month• Usage pattern ...

Relational Marketing:• How does

your typical customerinteract with you?

Build a customer life cycle:• Non-customer• Prospect, lead• First timer• Repeat buyer• Testimonial


3) Defining the Market – Market Forecast

Transactional Marketing:Estimate market size

top-down:

• Potential market?• Available market?• Target market?• Penetrated market after

first year in business?

Relational Marketing:Determine minimum market size bottom-up (Break-even analysis):

How many customers must be addressed to cover costs

of first year in business?


Introduction Growth Maturity Decline

4) Timing the Entry Into the Market— Product/Market Life Cycle

marketvolume

Market Innovator

Product Innovator

time


4) Timing the Entry Into the Market— Product/Market Life Cycle

Introduction Growth Maturity Decline

New customers

former non-buyers competitors’ customers

Main marketing problem

raising awareness, getting known

making product available

differentia-tion from competitors

retreat from market

Main instruments

Promotion Place Product,Promotion

Price

Spin on USP Newness Trendiness Distinctness Reliability

How can Marketing Strategy adaptto different Life Cycle Phases ?Q:


4) Timing the Entry Into the Market— First Move Considerations

First Mover Advantages

Primacy effect: Making an early and lasting effect on customers

Investments into the market (e.g.: distribution network, consumer awareness) will pay off early.

First mover can start to build experience early, increase the lead and solidify the strategic position

First Mover Disadvantages

Recency effect: Followers have benefit of newness

Competitors’ free rider effect; investments may turn out to beexit barriers if/when market declinesCompetitors may catch up or outperform first mover if imitation barriers are low


Finding New IdeasInnovationCreativity

Harvest ProfitPotentialEconomiesof Scale

PositioningagainstCompetitorsDifferentiation

Conclusion: The Innovation Cartwheel

MarketingNew Ideas

Making themacceptable to customers

EntrepreneurialMarketing Strategy

– a constant interplayof rulebreaking andmainstreaming ...

COEUR - BCM Business Creativity Module “Entrepreneurial Marketing Strategy” Andrew Turnbull ;...

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