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Lecture # 19 PDF

The document discusses key marketing concepts for startups, including market segmentation, selecting a target market, and establishing a unique positioning strategy. It explains the importance of focusing on benefits rather than features when promoting products. The marketing mix of product, price, promotion, and place is covered, along with different pricing strategies and promotional tools like advertising. Building a brand through various techniques is also addressed. The goal is to provide entrepreneurs with guidance on critical early stage marketing decisions.

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Hermain Fayyaz Karim
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© © All Rights Reserved
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58 views

Lecture # 19 PDF

The document discusses key marketing concepts for startups, including market segmentation, selecting a target market, and establishing a unique positioning strategy. It explains the importance of focusing on benefits rather than features when promoting products. The marketing mix of product, price, promotion, and place is covered, along with different pricing strategies and promotional tools like advertising. Building a brand through various techniques is also addressed. The goal is to provide entrepreneurs with guidance on critical early stage marketing decisions.

Uploaded by

Hermain Fayyaz Karim
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Entrepreneurship

By
Beenish Qureshi
Visiting Faculty
Topic:
Unique Marketing Issues
Chapter Objectives
1. Explain the purpose of market segmentation.
2. Describe the importance of selecting a target market.
3. Explain why its important for a start-up to establish a unique position in its target
market.
4. Describe the importance of the ability to position a company’s products on benefits
rather than features.
5. Illustrate the two major ways in which a company builds a brand.
6. Identify the four components of the marketing mix.
7. Explain the difference between a core product and an actual product.
8. Contrast cost-based pricing and value-based pricing.
9. Explain the differences between advertising and public relations.
10. Weigh the advantages and disadvantages of selling direct versus selling through
intermediaries.
Selecting a Market and Establishing a Position in the Market

There are some Important Questions That All Startups Must Ask:
In order to succeed, a new firm must address this important issue: Who are
our customers are and how will we appeal to them?
The Answer to these Questions are :
A well-managed start-up approaches this query by following a three-step
process:
• Segmenting the market.
• Selecting a target market.
• Establishing a unique position in the target market
The Process of Selecting a Target Market and Positioning Strategy
Market Segmentation
• Involves studying a firm’s
industry and determining the
different target markets in that
industry.
Segmenting the • Markets can be segmented in
Market a number of different ways,
including
- Product type
- Price point
- Customers served
Example: Segmenting the Computer Industry by Product Type

Netbooks
Handheld Computers
(new category)

PCs Minicomputers

Mainframes
Selecting a Target Market
• Once a firm has segmented
the market, a target market
must be chosen.
• The market must be sufficiently
Target Market
attractive and the firm must have
the capability to serve it.
• The Netbook segment of the
computer industry is new, and
is being targeted by many startups.
Establishing a Unique Position
• After selecting a target market, the
firm’s next step is to establish a
“position” within the market that
differentiates it from its rivals.
Positioning
• 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.
Establishing a Unique Position

• 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.
• An example is Nike’s familiar tagline, “Just do it.”
• The beauty of this simple three-word expression is that it
applies equally to a 21-year-old athlete and a 65-year-old
mall walker.
Selling Benefits Rather Than Features

• Many entrepreneur make the mistake of positioning their


company’s products or services on features rather than benefits.
• A positioning or marketing strategy that focuses on the features
of a product, such as its technical merits, is usually much less
effective than a campaign focusing on what the merits of the
product can do.
Selling Benefits Rather Than Features
Two different approaches of promoting a cell phone

Approach Illustration
“Our cell phones are equipped with sufficient
Selling Features
memory to store 1,000 phone numbers.”

“Our cell
phones let you store up to 1,000 phone numbers,
Selling Benefits providing you access to the phone numbers of your family,
friends, and business acquaintances instantly.

The first statement tells a prospect how many phone


numbers the cell phone will hold but doesn’t say why
Conclusion
that’s important. The second statement tells a prospect
how buying the product will enhance his or her life or
business.
Establishing a Brand

A brand is the set of attributes—positive or negative—that people


associated with a company.
These attributes can be positive, such as trustworthy, dependable,
or easy to deal with or they can be negative, such as cheap,
unreliable, or difficult to deal with.
The customer loyalty a company creates through its brand is one of
its most valuable assets.
Some companies monitor the integrity of their brands through a
program called “brand management.”
Establishing a Brand
Different Ways of Thinking About the Meaning of a Brand
Establishing a Brand

So how does a firm establish a brand?


• 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.
• 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.
• A firm’s name, logo, Web site design, and even its letterhead
are part of its brand.
Establishing a Brand

• Power of a Strong Brand


• Ultimately, a strong brand can be a very powerful asset for a firm.
• Cobranding
• A technique that companies use to strengthen their brands is to enter
into a cobranding arrangements with other firms.
• Cobranding refers to a relationship between two or more firms where
the firm’s brands promote each another.
The Four Ps of Marketing for New Ventures

Product Price

Marketing Mix

Promotion Place (or


distribution)
Product

• Is the good or service a firm offers to its target market.


• The initial rollout is one of the most critical times in the
marketing of a new product.
• All firms face the challenge that they are unknown and that it
takes a leap of faith for the first customers to buy their products.
Some startups meet this challenge by using reference accounts.
Core Product vs. Actual Product
Core Product Actual Product

The product itself, such The product plus all the


as an antivirus software attributes that come
program. with it such as quality
level, features, design,
packaging, and
warranty.
Price

Price is the amount of money consumers pay to buy a product.


The price a company charges for its products sends an important
message to its target market.
• For example, Oakley positions its sunglasses as innovative,
state-of-the-art products that are both high quality and
visually appealing.
• This position in the market suggests a premium price that
Oakley charges.
Most entrepreneurs use one of two methods to set the price for
their products, as Cost Based and Value Based Pricing.
Core-Based vs Value-Based Pricing
Cost-Based Pricing Value-Based Pricing

The list price is The list price is


determined by adding a determined by
markup percentage to a estimating what
product’s cost. consumers are will to
pay for a product.
Promotion

• Promotion
• Refers to the activities the firm takes to communicate the merits
of its product to its target market.
• There are several common activities that entrepreneurs use to
promote their products and services.
• Advertising
• Advertising is making people aware of a product or service in
hopes of persuading them to buy it.
Pluses and Minuses of Advertising
Pluses

• Raise customer awareness of a product.


• Explain a product’s comparative features and benefits.
• Create associations between a product and a certain lifestyle.

Minuses

• Low credibility.
• The possibility that a high percentage of people who see the add
will not be interested .
• Message clutter.
• Relative costliness compared to other forms of promotion.
• Intrusiveness.
Steps Involved in Putting Together an Advertisement
Google AdWords and AdSense Program

AdWords
• Allows advertisers to buy keywords on the Google home page.
• Triggers text-based ads to the side (and sometimes above)
search results when the keyword is used.
• The program includes local, national, and international
distribution.
• Advertisers pay a certain amount per click.
• Advertisers benefit because they are able to place their ads in
front of people who are already searching for information about
their product.
Google AdWords and AdSense Program

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.
• Advertisers benefit because the content of the ad is often
relevant to the Web site.
• Web site owners benefit by using the service to monetize their
Web site.
Public Relations

• One of the most 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.
• The major difference between public relations and advertising is
that public relations is not paid for the awareness.
Public Relations Techniques

Press release Media coverage

Articles in industry
Blogging
press and periodicals

Monthly newsletter News conference

Civic, social, and community


involvement
Other Promotions Techniques
Viral Marketing Guerrilla Marketing

Facilitates and A low-budget approach


encourages people to to marketing that relies
pass along a marketing on ingenuity,
message about a cleverness, and surprise
particular product or rather than traditional
service. techniques.
Place (or Distribution)

• Encompasses all the activities that move a firm’s product from


its place of origin to the consumer.
• The first choice a firm has to make regarding distribution is
whether to sell its products directly to consumers or through
intermediaries (such as wholesalers and retailers).
• Within most industries, both choices are available, so the
decision typically depends on how a firm believes its target
market wants to buy its product.
Selling Direct Vs. Selling Through an Intermediary

Approach to Description
Distribution

Selling Many firms sell direct to customer, maintaining control


Direct of the distribution and sales process.

Selling Through Other firms sell through intermediaries and pass off
Intermediaries their products to wholesalers who place them in retail
outlets to be sold.
Selling Direct Versus Selling Through a Intermediary
• Thankyou

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