entrepreneurship education experience - bob caspe (aula 4)
TRANSCRIPT
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Bob Caspe
The International Entrepreneurship Center
Entrepreneurial Action
4
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Would you like one?
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Building a New Category
Pre Existing
Category
New
CategoryInnovation LevelInnovationPre Existing
Category
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Product Introduction Cycle
-80
-60
-40
-20
0
20
40
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Marketing Cost
Net Profit
Accumulated Profit
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P&G Swiffer Mop
String Mop Sponge Mop ?
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Launch Alternatives
Problem – How does one sustain the early large losses associated with product marketing when introducing LARGE incremental value1. Use only small incremental Value
2. Raise capital
3. Introduce the product as a new category with direct marketing where each transaction pays for the media cost immediately.
4. Limit the targeted demographic so that the cost starts within budget and then increase the demographic as accumulated profit allows additional media to be purchased.
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Direct Marketing Product
Introduction
Goals:
Teach the Customer the value
system
Establish the Category
Once the Category is Established
then introduction through normal
channels is possible
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B2B New Category Launch
The Main Problem is one of Education
Proper use of PR
Write a Testimonial Use Article for one of
your customers
Place it in a trade journal
Trade Shows
Conventional Outbound Direct
Marketing
Email, Telephone,…
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Typical Direct Marketing Ad
Define the Pain
Offer the Solution
Provide Testimonial
Define the Transaction
Call to action
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Media Efficiency
Number of Likely Prospects / Total Audience
The Media Efficiency is the MOST important factor in determining whether a Campaign will be cost effective.
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FDA Consulting
FDA Testing Data Analysis
FDA process extends over years
Tried Advertising in trade magazine
All Readers of the Magazine
Not in the business
Of making an FDA
ProductNot Looking
At this time
For help
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Better Strategy
How to find potential customers at the
unique moment when they are considering a
selection process?
○ Ad-words
○ Trade show
○ Reference
How to decide?
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New Category Marketing Costs
The Media Cost is Expensive
because the information content is
high
Typical ratios of
[7 : 1] for [Selling Price : COGS]
If it’s not really a new category then
you can’t compete on price!
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Designing an Ad
First define your Goal For example: Drive sale to retail
Or, Generate a lead by telephone…
Don’t try to do accomplish much!
Define your call-to-action (CTA) Applies to package design too
Define your Value Message
Use a Testimonial if it’s a new category
Define your Tracking Mechanism
Create an appealing design
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Call to Action (CTA)
Why the customer should move at this
moment
Price reduction
Free shipping
Free extra item
Most manufacturers build in the CTA
cost into their standard cost model
Dell Example
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Tracking Mechanisms
Goal – Measure the Campaign
Effectiveness
Unique Telephone Number
Unique URL
Coupon
Discount Code
Observe a “bump” in sales
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Analysis
For each campaign
Assemble the Media Costs
Assemble the Selling Costs
Assemble the Product Costs
Calculate the Contributed Margin
○ Cost per Lead (media effectiveness)
○ Closing ratio (sales effectiveness)
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Direct Marketing Examples
Liberty Medical Supply
Diabetic Supplies for Seniors
who are on Medicare
Grew from 10M to 450M in just
a few years.
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Liberty Medical Supplies
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Example Mailer
Very low Cost – Postage paid by Fast
Lane
Fast Lane Statement
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Example Bose Mailer
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Bose back
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Finding Success
Successful campaigns are not
created instantaneously, they need to
be tuned over many experiments.
It takes patience to create a working
campaign.
Tuning a campaign never stops.
15% of the media budget is used for tests
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New Category Examples
BOWFLEX
IPOD
TV-Picshare
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IPOD
Preexisting or new
category?
Ad 2001
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IPOD 2003 Ad Campaign
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Let’s take a break