marketing 1 communication & distribution presented by steven r. kopits feb. 2003
TRANSCRIPT
1Marketing
MarketingCommunication & Distribution
Presented by
Steven R. Kopits
Feb. 2003
2Marketing
Overview - Marketing
• Customer Demand
• Product Offering
• Channels– Communication– Distribution– Payment
3Marketing
Typical Entrepreneur Perspective
• Customer Demand
• Superior Product
• Channels
Entrpereneurs often put excessive focus on the product or service to the detriment of focus on customers or channels. The very definition of a
technology-driven company.
Entrpereneurs often put excessive focus on the product or service to the detriment of focus on customers or channels. The very definition of a
technology-driven company.
4Marketing
Customer Demand
• Need
– The desire for a product or service
• Demand
– The ability to pay for a product or service
Demand is the desire and ability to buy a product or service.
Demand is the desire and ability to buy a product or service.
5Marketing
Customer Types
Customer Types "A" "B" "C" "D"
Understands own problem x
Understands own envisioned solution ? x x
Is prepared to act x x
Has necessary funding ? x x
Has necessary approvals x x x
Believes your sales pitch (credibility) x x
Is prepared to accept your terms x x
Months to sales conversion 6 12 24 24+
“A” and “B” customers are preferable, but in most innovative industries, perhaps 70% of prospects are “C” and “D” customers
“A” and “B” customers are preferable, but in most innovative industries, perhaps 70% of prospects are “C” and “D” customers
6Marketing
Characteristic Comments
• “A” Customers
– ‘Bring me a proposal I can sign.’
• “B” Customers
– ‘I like the product, but I need to do more research before I can decide.’
• “C” Customers
– ‘Yes, we have that problem, but I don’t know what to do about it. We get by. How does your product relate to our situation?’
• “D” Customers
– ‘We have no problems like that in our organization.’
7Marketing
The Sales Funnel
30 D’s
15 C’s
5 B’s
1 A
The Sales Funnel: For every converted sales, there are about 30 leads to follow up
The Sales Funnel: For every converted sales, there are about 30 leads to follow up
8Marketing
Credibility & Prejudice
• Credibility– “B” customers may well want the product or service, but may not be
convinced that you can deliver it– “C” customers will neither be ready to buy the product, nor ready to buy it
from you.– “D” customers may be offended by your sales pitch, as they do not yet
perceive they have a problem.
• Prejudice– Lacking extensive education, a customer will favor his own preconception
of a problem and its solution, regardless whether this is actually correct– Education is the key to overcoming prejudice– Time with the decision-maker is the key to imparting information and
education– Access is the key to timeIf access is hard to obtain, trying sell into—and not away from—prejudices.
And remember: the three keys to selling are credibility, credibility, and credibility.
If access is hard to obtain, trying sell into—and not away from—prejudices.And remember: the three keys to selling are credibility, credibility, and
credibility.
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Product Offering
• A superior offer– 50% cheaper or better than current solution
• A superior offer will be the entrepreneur’s natural strength– One benefit of being technology-driven– As long as the technology solves an important problem for an identified
customer demand
• However, an offer does not exist in a vacuum:– Product– Placement– Packaging– Promotion
The entrepreneur needs to move away from just the product and also consider the ‘channels’: packaging, placement, and promotion.
The entrepreneur needs to move away from just the product and also consider the ‘channels’: packaging, placement, and promotion.
10Marketing
Packaging
• Characteristics– Identifiable– Comprehensible– Practical (convenient)– Time-saving– Consistent– Durable/Stable– Neat and clean– Appealing
• Although packaging is general applied to consumer goods, every category has an analogy in services as well.
Although packaging is usually not the substance of the product, it can facilitate the purchasing decision, and poorly executed, it can prevent a
purchase.
Although packaging is usually not the substance of the product, it can facilitate the purchasing decision, and poorly executed, it can prevent a
purchase.
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Promotion
• Promotion– The process of communicating your offer to potential customers
• Two misconceptions– “Promotion is just used to get us to buy things we don’t want.”– “Advertising doesn’t contain any information.”
• Advertising communication has limitations– Difficulties in targetting customers precisely enough (time, place,
medium)– Advertising is to act as a reminder—ie, ’create brand awareness’—in
some cases, not as a purveyor of new information– In mature industries with commodities characteristics, advertising is
used to try to differentiate products that are essentially similar
• Nevertheless, the primary function of promotion is to let the market know about your superior offer.
For the tech entrepreneur, advertising and promotion are tools for communicating your superior offer to the market. Customers need to
know about your product to buy it.
For the tech entrepreneur, advertising and promotion are tools for communicating your superior offer to the market. Customers need to
know about your product to buy it.
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Communication
• Three goals of communication:– Close “A” customers. Get them to buy your product.– Convince “B” customers: Provide them with additional
information to make a decision, and reinforce your company as the best choice (share of mind)
– Coach “C” and “D” customers and use public presence as a means to gain credibility with them—and access to them.
Each type of communication has a specific goal with a specific customer set.
Each type of communication has a specific goal with a specific customer set.
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Communicating with Specific Customers
• Answer the following:– Who are your customers?– Where are they?– When are they available to deal with your pitch?– When do they decide?– How do they decide?– How can you reach them at the right place and time?– How much will it cost? (cost/benefit)
A general advertising—in essence, soft—problem can be converted into a technical problem. And you are good at solving technical
problems.
A general advertising—in essence, soft—problem can be converted into a technical problem. And you are good at solving technical
problems.
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Distribution
• Not only do you need to target your superior product to a specific customer set, you need to communicate the opportunity. You also need to get the product into the marketplace—distribution.
• Distribution considerations:– Access to channels– Channel access to your customers– Channel credibility with your customers– Cost & Dependence– Other channel considerations
• terms (volumes, exclusivity, duration, severability)• conflicts (does your product have priority?)• security, complexity and risk• sophistication
A general distribution—in essence, softish—problem can be converted into a technical problem. And you are good at solving
technical problems.
A general distribution—in essence, softish—problem can be converted into a technical problem. And you are good at solving
technical problems.
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Payment Channels• Payment is the flip side of distribution—but not exactly the same thing.• Payment issues:
– Method (cash, card, invoice)– Timing/Terms (pre, post, at delivery, collection cycle)– Risk (non-payment, customer fraud, channel theft, embezzling)– Complexity, stability, and opportunity for mistakes– Location: physical and jurisdictional– Real time, online, offline, batch, remote– Tax implications– Refunds– Channel costs– Degree of integration with general ledger
• Payment channels are every bit as important as distribution channels.• Can be source of competitive weakness—or strength.
You not only have to sell it, you have to get paid—consistently and safely.
You not only have to sell it, you have to get paid—consistently and safely.
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Summary
• Know your customer.• Have a good product.• Communicate the offer.• Make sure the customer can buy the product easily.• Make sure you get paid.
Customer. Product. Communication. Distribution.
Customer. Product. Communication. Distribution.
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Case Study
• New Air is a start-up regional airline looking to serve Central Europe from Budapest. It’s typical round trip prices are €130, about 40% of prices of the major airlines.
• Questions:– Who are this company’s core clients?– How compelling is the offer?– How should the airline package its offer?– Who are its natural partners?– How should it promote itself?– How should it distribute its product?– What payment issues could it have?
