Chapter 15
Developing An Entrepreneurial Marketing Plan
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 2
Learning Objectives
• Discuss the role of the product adoption/diffusion curve for marketing strategy
• Explain how to create an effective marketing plan• Discuss the forms of advertising and promotion that
entrepreneur can tap • Describe the role of publicity• Explain how entrepreneurs can employ new media
to their advantage• Discuss the role of personal selling in a marketing
strategy
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 3
The Product Adoption/Diffusion Curve
• Groups customers into categories based on how quickly they adopt a new product
• Innovators
• Early adopters • Early majority • Late majority • Laggards
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 4
Figure 15.2: New Product Adoption/Diffusion Curve
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 5
Figure 15.3: The Technology Adoption-Diffusion Curve
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 6
The Marketing Plan
• Details the strategies and tactics that will create customer awareness
• Builds a brand and a develops a loyal customer base
• Provides a consistent message to the customer and creates an opportunity for the entrepreneur to make a sale
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 7
The Marketing Plan (continued)• Steps prior to writing the marketing plan
– Define the approach to the market• Message• Differentiation tactics• Channel strategies• Performance goals
– Define the value proposition – Analyze and rank the marketing options– Establish sales and marketing goals (SMART)
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 8
The Marketing Plan (continued)• The marketing plan in one paragraph…
– Contents
• Purpose of the marketing plan• Benefits of the product/service• The target market• The market niche• The marketing tactics • The company’s convictions and identity• The percentage of sales represented by the
marketing budget
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 9
5 P’s of Marketing
• People• Product• Price• Place • Promotion
– Advertising and promotional goals– The media plan
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 10
Marketing Plan Outline
• One-paragraph overview of the marketing plan• Key marketing issues that will affect company
success• Launch objectives and milestones• Brand strategy• Strategic alignment• Assessing effectiveness
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 11
Advertising and Promotion
• Advertising is employed to pull the product through the distribution channel (Pull strategy)
• Promotion tends to be more price-focused or incentive-focused (Push strategy)
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 12
Push vs. Pull Strategy Factors to Consider Use Advertising (Pull) Use Promotion (Push)
Price sensitivity Not effective Effective
Brand loyalty High loyalty Low loyalty
Need for information High need Low need
Risk – switching costs, learning curve
High risk for customer Low risk for customer
Product life cycle stage Growing or mature New product or declining product
Market status High market share Low market share
Purchasing pattern Predictable Unpredictable
Contribution to profit Above average Below average
Differentiation Strong differentiation Little differentiation
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 13
Advertising Media
• Print– Newspapers– Magazines– Direct marketing (direct mail, telemarketing)– Yellow Pages– Signs
• Broadcast Media– Radio– Television
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 14
Taking Advantage of Publicity
• Publicity and word-of-mouth (referrals) are two of the most effective entrepreneurial marketing tools around because they don’t cost the company any money – Require a compelling story – Network with the media– Issue a press release
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 15
Constructing an Effective Press Release
• Contents:– Date– Name of contact person– Phone number– Release date– Descriptive headline– Release information– The who, what, where, when, and why – Photo/Illustration– Explanatory note regarding why the release was
sent
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 16
Getting Customer Referrals
• Ask satisfied current customers• Take a customer to lunch to get ideas• Do a global Internet search on rumors• Conduct in-depth third party
interviews• Administering an open-ended online
survey• Host an online discussion • Create a customer advisory board
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 17
Giving It Away
• When the customer is likely to return• The cost for each additional item is low and
margins are high• When customers need to try the
product/service in order to risk the money to buy it
• When samples of the product/service can be offered at a large event
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 18
Internet Marketing and New Media
• Internet advertising will be a $26 billion dollar market in 2009
• Traditional media boundaries disappearing• Barriers to content creation have been
breached • New challenges and opportunities for
entrepreneurs
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 19
Internet Marketing and New Media (continued)
• Social Media • Search Engine Marketing • Affiliate Programs • Privacy Issues
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 20
Personal Selling
• Become a value-added company by tailoring products to meet customer’ needs
• Improve personal selling skills– What do customers want from the sale?– Give them what they want
• Trade shows and exhibits– Expose products– Network on site and after the show– Rent a hospitality suite
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 21
Customer Relationship Management
• CRM is a system for gathering/using customer information which combines– Technology– Training– Business strategy
• The CRM system contains– Names– Addresses– Attributes of people who are likely to
purchase
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 22
Identifying and Rewarding the Best Customers
• For many companies 24 percent of its customers account for 95 percent of its revenues
• Calculate lifetime customer value
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 23
Complaint Marketing
• A dissatisfied customer will probably tell at least nine other people about the problem
• Complaints should be viewed as opportunities for continual improvement
• Satisfaction surveys
Copyright © Houghton Mifflin Company. All rights reserved. 15 | 24
Review…• Product adoption/diffusion curve for marketing
strategy• Create an effective marketing plan• Forms of advertising and promotion that
entrepreneur can tap • Role of publicity• Entrepreneurs can employ new media to their
advantage• Personal selling in a marketing strategy