bygrave & zacharakis, 2007. entrepreneurship, new york: wiley. © chapter 5 entrepreneurial...

Bygrave & Zacharakis, 2007. Entrepreneurship, New York: Wiley. ©

Chapter 5

Entrepreneurial Marketing


Definition of marketing by the American Marketing Association:

an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders.

Marketing practices vary depending on the type of company and the products and services it sells.



Why Marketing is Critical for Entrepreneurs

Because no venture can become established and grow without a customer market;

Because it is difficult and expensive to bring new products and services to market;

To differentiate product or service to customers makes the company distinctive and valuable;

Companies must be able to switch marketing gears quickly to attract new customer segments.



Entrepreneurs Face Unique Marketing Challenges

limited resources in financial, managerial, and time;

limited market information;

decision-making inclined to be muddled by personal biases and beliefs;

poorly established relations with multiple audiences.



Market research techniquesExisting market New market

Philosophy of market research

Deductive data analysis

Intuition

Techniques for gathering customer information

Focus groups, surveys, mail studies

Industry experts, trend extrapolation, future scenarios

Examples New types of toothpaste, new car models

Social media exchange markets


Disadvantages to existing companies entering new markets• Core rigidities: companies are only good at

things they are used to doing• Tyranny of the current market: companies

listen to their customers, who are not a source of ideas for new products in new markets

• Use myopia: customers of existing firms see needs or solutions very narrowly (i.e., not the needs of others)


Disadvantages to existing companies entering new markets• Because large companies have these

disadvantages with new markets, new ventures should focus on new markets instead of established ones


Acquiring Market InformationMarketing research could cover information such as:

-Product attributes important to customers;-Possibility of customers’ buying willingness by marketing behaviors;-Market trend;-The location of the customers’ preference.



Acquiring Market InformationTwo basic types of market data

•Primary data•Data you collect yourself•Limitations of primary data

•Secondary data•Economical and usually used to collect baseline information



Conjoint analysis

• Asks individuals to express their preferences for various product that are especially chosen to offer a systematic array of features

• Price, size, weight, battery life, color• Two choices for each feature leads to 32

different products (2x2x2x2x2)• Important to determine most important

features


Conjoint analysis

• Conjoint analysis is a useful technique for determining the relative importance, in the customer’s preferences and decisions, of the dimensions they consider important

• Effective use of conjoint analysis helps entrepreneurs design products that have high appeal to potential customers and maximize chances of venture success


Market dynamics

• Entrepreneurs are more successful in large and growing markets– Large markets amortize the fixed costs of

getting started over a larger number of units– It’s easier to sell into rapidly growing markets


Market dynamics

• The performance of product adoption follows an S shape– Initially, need a large amount of effort to

achieve small improvements in product performance

– Then performance improvements accelerate and small efforts can lead to large improvements

– Later, must make large efforts to achieve small improvements


Market dynamics

• Established firms rarely compete with entrepreneurs to develop new products on the early part of the S curve– The new product usually begins with inferior

performance that hurts the company’s overall performance

– Managers of established companies believe they can always improve the performance of their existing products to compete with new products


Marketing Strategy for Entrepreneurs

A company’s marketing strategy must closely align with its resources and capabilities;

Segmentation, targeting, and positioning are key marketing dimensions that set the strategic framework.



Entrepreneurial MarketingMarketing Strategy for Entrepreneurs/the Marketing Mix

Product Product StrategyStrategy

placeplace

promotiopromotionn

Pricing StrategyPricing Strategy



Guerilla Marketing

Guerilla marketing acts as non-traditional, grassroots, and captivating – that gain consumers’ attention and build awareness of the company.

Word-of-Mouth marketing, Buzz marketing, and Viral Marketing.

Other issues in Guerrilla Marketing.



Entrepreneurial MarketingMarketing Skills for Managing Growth

Understanding and Listening to the Customer

Building brand awareness and building brand equity



Conclusion

Marketing is a delicate balance of art and science.

It is necessary for entrepreneurs to scale up or change focus.


bygrave & zacharakis, 2007. entrepreneurship, new york: wiley. © chapter 5 entrepreneurial...

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