What do we learn?
a.
3 steps
entrepreneurial firms use to identify their customers.
1. Segmenting the
market
·
What groups of customers in my market are similar
enough that the same product or service will appeal to all of them.
·
Market segmentation: studying the
industry in which the firm intends to compete and determine the different
potential target markets in that industry.
·
Markets can be segmented in a number of different
ways, including:
o Geography
o Demographic variables
o Physicographic
variables
o Behaviourial variables
o Product type
o Price point
o Customer served
2. Selecting target
market
·
Which specific group of customers have been decided to
be the target.
·
The market must be sufficiently attractive and the
firm must have the capability to serve it.
·
Niche market: place within a
market segment that represents a narrow group of customers with similar
interests.
3. Crafting a unique
positioning strategy
·
What position will the firm occupy in the minds of the
customers that will differentiate it from all of the competitors.
·
A “position” is the part of a market that the firm is
claiming as its own.
·
A firm
establishing a unique position in its customers’ minds by drawing attention to
two or three of the product’s attributes.
·
Firms often develop a “tagline” to reinforce the
position they have staked out in their market, or a phrase that is used
consistently in a company’s literature and thus becomes associated with the
company.
·
Product attribute map: illustrates a firm’s
positioning strategy relative to its major rivals.
b.
What is a brand
and why is it important to an entrepreneurial firm’s marketing efforts.
·
What is a brand?
o Brand: the set of attributes—positive or negative—that
people associated with a company.
o
Brand management: program used
to protect the image and value of an organization’s brand in customer’s mind.
·
Importance of a brand
o a strong brand
can be a very powerful asset for a firm.
·
How does a firm establish a brand?
o On a
philosophical level, a firm must have meaning in its customer’s lives. It must create value—something for which
customers are willing to pay.
o On a more
practical level, brands are built through a number of techniques, including
advertising, public relations, sponsorships, support of social causes, and good
performance.
o A firm’s name,
logo, Web site design, and even its letterhead are part of its brand.
c.
The 4Ps of
marketing activities.
·
Marketing mix: the set of
controllable, tactical marketing tools that it uses to produce the responses it
wants in the target market.
·
4Ps:
1. Product
o The good or
service a firm offers to its target market.
o Some startups
meet this challenge by using reference accounts. (reference accounts: his/ her experience with the product)
2. Price
o The amount of
money consumers pay to buy a product.
o The price a
company charges for its products sends an important message to its target
market.
o
2 methods to set price:
1. Cost-Based
Pricing: The list price
is determined by adding a markup percentage to a product’s cost.
2. Value-Based
Pricing: The list price
is determined by estimating what consumers are will to pay for a product.
3. Promotion
o The activities
the firm takes to communicate the merits of its product to its target market.
o Advertising: making people aware of a
product or service in hopes of persuading them to buy it.
o 6 steps to put
an advertisement together:
1.
Identify the
purpose of the ad: clearly identify one or more purposes that you expect
the advertisement to achieve.
2.
Determine the
target audience: identify who you want to see the ad.
3.
Select a medium: select a
medium for the ad.
4.
Create the ad: create an ad
that is appropriate for your audience, product, and budget.
5.
Select a place
and time for the ad to appear: select the specific place and time of the day for an
ad to appear.
6.
Fulfil expectations: make sure to
have enough product on hand if the ad is successful.
o Google adwords
and adsense program
§ Google adwords: Allows advertisers to buy keywords
on the Google home page. Triggers text-based ads to the side search results
when the keyword is used. (the program includes local, national, and international
distribution)
§ Google adsense: Allows advertisers to buy
ads that will be shown on other Web sites instead of Google’s home page, google
selects sites of interest to the advertiser’s customers. (advertisers are
charged on a pay-per-click or a per-thousand impression basis)
o Public relations
§ cost-effective
ways to increase the awareness of the products of a company is through public
relations. (public relations refer to efforts to establish and maintain a company’s
image with the public)
§ techniques:
·
price release
·
blogging
·
media coverage
·
news conference
·
monthly newsletter
·
Civic, social, and community involvement
·
Articles in industry press and periodicals
o Other marketing
technique:
§ Viral
marketing: Facilitates and encourages people to pass along a
marketing message about a particular product or service.
§ Guerrilla
marketing: A low-budget approach to marketing that relies on
ingenuity, cleverness, and surprise rather than traditional techniques.
4.
Place
o Encompasses all
the activities that move a firm’s product from its place of origin to the
consumer.
o Distribution channel: the route a product takes
from the place it is made to the customer who is the end user.
o 2 approaches of
distribution:
1. Selling
direct: sell direct to
customer, maintaining control of the distribution and sales process.
2. Selling
Through Intermediaries:
sell through intermediaries and pass off their products to wholesalers who
place them in retail outlets to be sold.
d.
7 steps sales process.
1. Prospect for (or
gather) sales leads.
2. Make the initial
contract.
3. Quality the
lead.
4. Make the sales
presentation.
5. Meet objections
and concerns.
6. Close the sale.
7. Follow up.
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