entrepreneurial marketing course introduction college of engineering university of california,...
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Entrepreneurial Marketing
Course Introduction
College of Engineering
University of California, Berkeley
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Scope of Marketing Course
Marketing Modules
Module 1 Market Definition, Customer Segmentation & Competition (5C’s)
Module 2 Product Development, Positioning & Pricing (PRODUCT)
(PRICE)
Module 3 Marketing Communications (PROMOTION)
Module 4 Distribution & Sales Channel Development (PLACE)
Conclusion Putting it All Together
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Module 1: Market Selection, Customer Segmentation & CompetitionEntrepreneurial Marketing
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Marketing is an Exchange Process
Company Customer
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Understanding the Customer Who are They?
Personal characteristics Product usage patterns
Why do They Buy? Needs Purchase Motivations
How do They Buy? Decision-making unit
(DMU) Decision-making process
What do They Buy? “Whole” Product or Service Set of product and non-
product capabilities that meet buying objective
Set apart from competition
Where do They Buy? Appropriate channel design
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Context
Model for Marketing Decision-Making:5 C’s & 4 P’s
CompanyCore Competencies
CustomerUnmet Needs
CompetitionCompetitive Advantage
CollaboratorsShared Interests
Target Market
Assess the Situation
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Segmentation Concept
Customers differ in the benefit they expect to receive from a product/service
While not all customers are heterogeneous, there are often CLUSTERS of customers that are
Segmentation = cluster of (nearly) similar customers
Goal: Identify factors that separate CLUSTERS Geographic – country, urban/rural, region, etc. Demographic – age, sex, income, education, industry, size of
organization Psychographic – personality traits, perceptual style, attitudes,
reference group, social role Product Benefits/Usage – needs, frequency of use, loyalty,
performance requirements Decision Process – shopping patterns, info search, media habits,
price sensitivity
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Positioning
Positioning = Managing the product and its presentation to fit a predetermined place in the mind of the customer
Positioning = Market + Competitive Segmentation
Differentiation
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Positioning Statement
For target market , COMPANY/PRODUCT is,
among competitive set ,
single most important claim ,
because single most important support.
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Elements of a “Great” Positioning Company
Fit with company strategy
Fit with company capabilities
Fit with corporate culture Fit with product strategy Fit with physical product Fit with brand personality
/ brand essence
Customer Credible Relevant Unique Durable Emotionally appealing
Context Fit with trends Unique vs. Competition
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Customer Decision-Making
Multiple players & roles (DMU) Motivations, power, perceptions of each?
Initiator Influencer Decider
UserGatekeeperPurchaser
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Customer Decision-Making Process
InitiatorGatekeeperInfluencerDeciderPurchaserUsers
Identify Need Create Biz Case Case Approval RFI Vendor Review ….
Time
DMU
Decision-making Process
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Key Themes:
The 5 C’s & 4 P’s of marketing -- All Customer behavior – Microfridge, Wildfire,
CardioThoracic Customer segmentation – Wildfire, Sealed Air,
Documentum, Biopure Positioning – Wildfire, Sealed Air Decision making unit (DMU) and decision making
process (DMP) – Microfridge, Wildfire, CardioThoracic
Competitive landscape – All
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Module 2: Product Policy, Positioning & Pricing
Entrepreneurial Marketing
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Assess the Situation (5 C’s)
Model for Marketing Decision-Making:5 C’s & 4 P’s
Target MarketSelect TargetMarket
DefineMarketingMix (4P’s)
Product
Price Promotion
Place
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Techies“Try it”
VisionariesMove ahead of the herd
PragmatistsStick with the herd
ConservativesMove only when necessary
SkepticsNo way
The Chasm
Product Adoption Lifecycle
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The Chasm
Lifecycle Stages
Early Adopters Product
innovation Build primary
demand Market
education Price skimming
to fund growth
Early Majority Product proliferation Stake out dominant
market share Channel
development Product line
extensions Achieve economic
scale
Late Majority Market Maturity Survive industry
shakeout Superior distribution
/ availability Strong trade
promotions Penetration pricing Low-cost producer
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Horizontal vs. Vertical StrategiesHorizontal Platform or toolkit for wide
range of business problems
Pursue full array of market opportunities
Need technology partners to fill product gaps
Sell to IT Sell to visionaries Each sale is starting from
scratch (until cross the chasm)
Vertical Solutions to specific
business problems Decline deals outside of
vertical Need system integrators to
customize & integrate Sell to business person
directly affected Sell to pragmatists Easier follow-on sales in
vertical due to references
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Whole Product
“The Whole Product”
=
Physical Product
+
All Associated Factors (services, partners,warranties, guarantees, image, training, etc.)
required to fulfill customer buying criteria
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Input intoPricing Strategy
Input intoPricing Strategy
Pricing Concepts
OurProduct / Service
Capabilities
OurProduct / Service
Capabilities
Value of “Perfect Substitute”
Value of “Perfect Substitute”
CustomerPerceived Value
CustomerPerceived Value
Gap
CompetitorProduct / Service
Capabilities
CompetitorProduct / Service
Capabilities
Marketing & Sales Efforts
Marketing & Sales Efforts
Gap
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Pricing: Internal & External Factors
Internal Factors Objectives of the Firm Marketing Mix strategy Costs
External Factors Nature of the market Demand Competition Channel pressures
Pricing Decisions
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Pricing Strategies
Market Skimming Image/brand supports high
price Solving high-value need
with limited substitutes Small/limited initial buyer
set Competition cannot get in
and undercut Limited manufacturing
capacity High fixed cost at low
volumes
Market Penetration Costs go down with volume
(economies of scale) Market is price sensitive High chance of competition
entering quickly Have sufficient
manufacturing capacity Large immediate demand
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Bonoma’s Vegematic Pricing Model
Company’s VariableCosts
Customer’sPerceived
Value
Penetration Pricing
Skim Pricing
Competitors Prices
FeasiblePrice Range
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Key Themes:
Product innovation & development process – CardioThoracic
Whole Product – Microfrige, Documentum, CardioThoracic
Horizontal vs. Vertical markets – Documentum Multi-product line management – Wildfire, Sealed
Air, Biopure Pricing economics & math – Sealed Air, Biopure Go-to-Market considerations – All Technology adoption lifecycle -- All
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Assess the Situation (5 C’s)
Modules 3 & 4: Promotion & Place
Target MarketSelect TargetMarket
DefineMarketingMix (4P’s)
Product
Price Promotion
Place
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Assignment 3: Product, Positioning & Pricing Plans
Company Why are you in business and how do you make money? Core competencies (people, know-how, etc.)
Customer Customer problem / pain points Value proposition to solve pain points Target market segment(s) Positioning statement(s) for those segments
Competition Direct competitors Alternates / Substitutes
Product Features/Advantages/Benefits
Pricing Pricing approach – skim, penetration, other Pricing stucture/level