key marketing issues for new venture

8/10/2019 Key Marketing Issues for New Venture

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Key Marketing Issues of New Venture

Prepared By:

Divyesh Gandhi


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Unique Marketing issues in new venture

Select Market and Establish Position Key Marketing issues for new venture

The 4ps for new Venture


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I. Selecting a Market and EstablishPosition

1. In order to succeed, a new firm must address this important question: Who and how will we appeal to them?

2. A wellmanaged startup approaches this query by following a three step pro

Segmenting the market,

Selecting or developing a niche within a target market,

Establishing a unique position in the target market.


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Cr

U

Po

S

Selecting a

Target Market

Segmentations

the market


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A. Segmenting the Market

1. The first step in selecting a target market is to study the industry in which tto compete, and determine the different potential target markets in that industr

2. This process is called market segmentation, and is important because a newonly has enough resources to target one market segment, at least initially.

3. Markets can be segmented in a number of different ways:

product type

price point

customers served


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Continue4. There are several important objectives a new firm should try to accomplmarket segmentation process:

a. The process should identify one or more relatively homogeneous groupbuyers within the industry the firm plans to enter in regard to their wants and n

b. Differences within the segment the firm chooses should be small comparacross segments.

c. The segment should be distinct enough so that its members can be easily ide

d. It should be possible to determine the size of the segment so that a firm knopotential market is before it aggressively moves forward.


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B. Selecting a Target Market

1. Once a firm has segmented the market, the next step is to select a target ma

2. Typically, a firm (especially a startup venture) doesnt target an entire segm

because many market segments are too large to target successfully.3. Instead, most firms target a niche within the segment.

a) A niche market is a place within a market segment that represents a ncustomers with similar interests.

b) b. In most cases, the secret to appealing to a niche market is to under

and meet its customersneeds. By focusing on a clearly defined target mbecome an expert in that market and then provide its customers with hand service.


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C. Establishing a Unique Position

1. After selecting a target market, the firmsnext step is to establish a posdifferentiates it from its competitors.

2. As we discussed in Chapter 5, position is concerned with how the firm is sits competitors. In a sense, a position is the part of a market or of a segmentfirm is claiming as its own.

3. A firm establishes a unique position in its customers minds by conattention to two or three of itsproductsattributes that define the essence of wand what separates it from its competitors.

Firms often develop a tagline to reinforce the position they have staked out ia phrase that is used consistently in a companys literature, advertisemstationery, and even invoices, and thus becomes associated with the companNikesfamiliar tagline, Justdo it.


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II. Key Marketing Issues for NeVentures

A. Selling Benefits Rather Than Features

1. Many entrepreneurs make the mistake of positioning thproducts or services based on features rather than benefits.

2. A positioning or marketing strategy that focuses on the

product, such as its technical merits, is usually much less efcampaign focusing on the merits of the product.


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Approach Illustration

Selling Features Our cell phones are equipped with sufficient memory to st

numbers.

Selling Benefits Our cell phones lets you store up to phone numbers, giving you the

of your family and your friends at your fingertips.

Conclusion While features are nice, they typically dontentice someone to bu

first statement tells a prospect how many phone numbers the cell

but doesnttell the prospect why thatsthat s important. The secona prospect why having sufficient memory to store 100 phone numb

and how buying the product will enhance his or her life.


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B. Establishing a Brand

1. A brand is the set of attributes positive or negative that people acompany.

2. Some companies monitor the integrity of their brands through a promanagement, or protecting the image and value of an organizations brandminds.

3. The difference between a companysbrand and its positioning strategy is tall about the attributes and promises that people associate with a company, anall about the details.


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4. Startups must build a brand from scratch. One of the keys is to create a strong firm that appeals to the chosen target market.

a) So how does a new firm develop a brand? On a philosophical level, a firm must hcustomerslives. It must create value.

b) On a more practical level, brands are built through a number of techniques, inc

public relations, sponsorships, support of social causes, and good performance.c) Ultimately, a strong brand can be a very powerful asset for a firm.

i. Brand equity is the term that denotes the set of attributes and liabilities that are linkenables it to raise a firms valuation.

ii Co branding ii. Corefers to a relationship between two or more firms where the firmpromote each other.

Examples: AT&T Universal Master Card

Citibank/American Airlines/Visa Card

Healthy Choice Cereal by Kelloggs

Coach edition of the Lexus ES series


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III. The Four Ps of Marketing For NVentures

1. Once a company decides on its target market, establishes a position withinestablishes a brand, it is ready to begin planning the details of its marketing m

2. A firms marketing mix is the set of controllable, tactical marketing tooproduce the response it wants in the target market.

3. Most marketers organize their marketing mix into four categories:

product, price, promotion, and place (or distribution).


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Marketing Mix

Product

Price

Place

Promotion


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Product

1. A firmsproduct, in the context of its marketing mix, is the good or servtarget market.

2. Determining the product or products to be sold is central to the firmseffort.

3. As the firm prepares to sell its product, an important distinction should be core product and the actual product.

While the core product may be a CD that contains an antivirus software prproduct, which is what the customer buys, may have as many as five characlevel, features, design, a brand name, and packaging.


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Price

1. Price is the amount of money consumers pay to buy a product. It is the onlmarketing mix that produces revenue; all other elements represent costs.

2. Most entrepreneurs use one of two methods to set the price for their prodpricing or valuebased pricing.

a. In costbased pricing, the list price is determined by adding a markup productscost.

b. In value

based pricing, the list price is determined by estimating whawilling to pay for a product, and then backing off a bit to provide a cushion.


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Approach to Pricing Description

CostBased Pricing In costbasedpricing, the list price is determined by adding a mar

to a productscost. The advantage of this method is that it is strai

it is relatively easy to justify Pricing the price of a good o

disadvantage is that it is not always easy to estimate what the c

will be.

ValueBased Pricing the ValueBased Pricing value list price is determined by e

consumers are willing to pay for a product and then backing off a cushion. What a consumer is willing to pay is determined by his o

value of the product and by the number of choices available in th

Most experts recommend valuebased pricing because it

consumersperception of what a product or service is worth.


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3. Regardless of the method of pricing, a company cant charge apremium pridelivering on its positioning and branding promises, and unless circumstances

4. To charge a premium price, one or more of the following circumstances mu

Demand for the product is strong relative to supply; Demand for the product is inelastic;

The product is patent protected and has a clearly defined target market;

The product offers additional features that are valued;

A new technology is being introduced;

The product is positioned as a luxury product.


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Promotion

1. Promotion refers to the activities the firm takes to communicate the merits of its produUltimately, the goal of these activities is to persuade people to buy the product.

2. The two most common activities entrepreneurs use to promote their firms are advertising a

a) Advertising makes people aware of a product or service in hopes of persuading them tomajor goals are to do the following:

Raise customer awareness of a product;

Explain aproductscomparative benefits;

Create associations between a product and a certain lifestyle.

b). Public relations refers to efforts to establish and maintain a companysimage with th

number of techniques that fit the definition of public relations. These include:

Press releases;

New conferences;

Media coverage;

Articles in the industry press and periodicals;

Civic, social, and community involvement.


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Identify thepurpose of

the end

Determinethe target

Audience

Select the

medium

Create the

ad.

Select a Plac

and time fo

the ad.

appear

Place (or Distribution)


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Place (or Distribution)

1. Place, or distribution, encompasses all the activities that move a firms producorigin to the consumer. A distribution channel is the route a product takes from the the customer who is the end user.

2. The first choice a firm has to make regarding distribution is whether to sell its pconsumers or through intermediaries (such as wholesalers and retailers).

a. Selling Direct: Many firms sell direct to customers. Being able to control the their products from their place of origin to the end user instead of relying on thiradvantage of selling direct. The disadvantage of selling direct is that a firm hastied up in fixed assets, because it must own or rent retail outlets or must field a s

products.b. Selling Through Intermediaries: Firms that sell through intermediaries typic

products to wholesalers who place them in retail outlets to be sold. An advantagethat the firm does not need to own as much of the distribution channel. The disathrough intermediaries is that a firm loses control of its product. There is no gBuy or Circuit City will talk up the firmsproduct as much as the manufacturerown stores.


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Approach to Distribution Description

Selling Direct Many firms sell direct to customers. Being able to control the pro

their products from their place of origin to the end user instead of

parties is a major advantage of selling direct. The disadvantage of

that a firm has more of its capital tied up because it must ow

outlets and must field a sales force.

Selling Through

Intermediaries

Firms who sell through intermediaries pass off their products to w

place them in retail outlets to be sold. An advantage of this appr

firm does not need to own as much of the distribution channel. Tof selling through intermediaries is that a firm loses control of its p


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Producer Consum

Selling Direct

Selling Through Intermediaries

Producer Producer Producer Produce


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You cant just ask customers what theyand then try to give that to them. By thyou get it build, theyll want something

key marketing issues for new venture

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