Entrepreneurship I
Class #4
Market Researchand
Marketing
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Market
• Group of potential customers who have purchasing power and unsatisfied needs.
• A new venture will survive only if a market exists
• Market research involves gathering information about a particular market, followed by an analysis of that market
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Market research
• Analyze the market– understand the nature of the
opportunity
• Segment• Target• Position• Marketing plan
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Market analysis• Define• Evaluate• Describe:
– size– growth– drivers– trends– players– competition
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Competitive analysis
• Market share• Strengths/weaknesses• New entrants/mergers• Stable/increasing/decreasing• Barriers to entry for you• Barriers to entry for others
(assuming you are in the market)
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Segment
• Sub-markets – allow entry best suited to limited
resource base• Various ways of segmenting
market:– product– customer– geography– distribution
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Segment
Stores9%
Municipalities30%
Contractors43%
Home Owners
18%
Home Owners
Contractors
Stores
Municipalities
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Crossing the chasmGeoffrey A. Moore
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Creating a new market
• Influence chain– seminal authors– early eustomers– industry analysts– press (trade and business)– most customers
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Targeting
• Rank segments• Dominate a segment• Jump to other segments
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Positioning
• Make the company the preferred provider (in that segment)
• Unique• Leverage strengths of firm/product/
service• Sustainable• Deliver value to customer better
than competitors
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Marketing
• Understanding customer needs• Determine benefits/value• Communicate• Objections• Plan of attack
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Success Factors
• Excellence in your people• Excellence in your product/service• Excellence in your organization
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4 Ps
Product Promotion
Price Place
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Marketing Plan
• Recognize a need• Develop a solution to fill the need• Understand the benefits to the
customer• Create a sales/distribution strategy• Formulate a promotional program• Establish a sustainable market position• Establish pricing
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The Need
• How many have the need?• How much will they pay for a
solution?• How do they get along now?• How well do you know this area?• Is this a window of opportunity or a
long felt need?
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The Solution• Can a product or service be designed?• Can it be developed at an acceptable
cost and time?• Can the risks be minimized or
eliminated?• Can it be produced at a cost that will
generate profits?• Can it be differentiated from existing
solutions?
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Benefits
• Establish between end-user and customer (who pays you?).
• Why will they buy this?• What value do you bring (over the
competitors)?
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Sales/distribution strategy
• How much can be spent on recurring sales cost?
• What are the best channels now?• The best channels in the future?• How will the competition react?• What sales presentation materials are
required?• How much sales training is required?
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Direct selling
• Direct sales people in regions or at headquarters
• Direct Mail – telemarketing• Direct response marketing• Corporate relationships
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Indirect selling• Distributors• Agents and sales representatives• Corporate partnerships• System houses - value added resellers
(VARs)• System integrators• Direct mail houses• Brand name for other corporations
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Promotional program
• How will the product be positioned?• How will the initial launch be handled?• Will you advertise - where, how much?• How will PR be handled?• Will you use direct marketing?• Who will be responsible for promotions?
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Sustainable market position
• High cost of entry for others• Patents, copyright, trade secrets• Brand name recognition• Proprietary sales/distribution
channels• Continuing product enhancements
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Pricing
• Selling price =– Cost to produce the product +– Expenses to run company +– Cost of marketing +– Pretax profit you desire
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What Can You Do?
• Innovation - in your product• Creativity - in the marketing plan• Execution - of operating plan• Persistence - without it, forget it!
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Strategies
• Low cost• Differentiation• Customer intimate
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Differentiation Points
• Quality• Speed• Reliability• Service• Design
• Relationships• Features• Personality• Technology
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Customer intimate
• Establishing relationships that provide value to the customer
• Teams or partnerships
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Price vs. Quality
High Qualit
y
Low Qualit
y
High Price
Low Price
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International marketing
• Every company needs to consider marketing outside of home territory
• Even start ups should consider what international markets they could address
• Specific new ideas and approaches may be needed to succeed
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Market research project
• Secondary research– information which already exists
somewhere
• Primary research– Talking to real people:
• customers• suppliers• partners• Experts
– Case study that relates to your business
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Questions
• Open ended questions• Closed ended questions