Marketing and Customer Insights

Customer and Markets

• A customer pays for a product or service. A consumer uses a product or service.
• A market is a place where people can buy and sell goods and services; the supply (sellers) compete for customers with the demand (buyers).
• A market consists of actual and potential customers for products or services who share common needs or wants and make buying decisions together.
• Market opportunity identification is a key part of entrepreneurship. Market opportunity is often determined by the customer demand for a specific product.
• Product application refers to the products or services needed to meet customer demands and solve customer problems.
• A novice entrepreneur focuses on the idea's novelty, whereas experienced entrepreneurs develop the idea into a viable product desired by customers.

Customer Types

• End users directly use the product/service
• Influencers are customers with large followings who can influence purchasing decisions.
• Recommenders (e.g. bloggers, experts) evaluate and share product information with the public
• Economic buyers approve large purchases (e.g. corporate buyers).
• Decision makers have the ultimate authority to approve purchases (e.g. CEOs, parents).
• Saboteurs can slow or veto purchasing decisions.
• Customer Personas= descriptions of ideal customers, based on research. They help focus marketing strategy.

Customer Journey Map

• A visual representation of the customer's experiences and interactions with a company.
• Summarizes goals, needs, and expectations.
• Outlines positive and negative emotions.
• Highlights gaps between desired and actual experiences.
• Facilitates emotional connections with customers.

Customer Segmentation

• Used to define customer groups.
• Includes factors like who they are, where they are located, their behaviors, and their needs.

Customer Adoption Categories

• Innovators: First to try a new product (2.5%).
• Early adopters: Adopt shortly after launch (13.5%).
• Early majority: Adopt once the product gains popularity (34%).
• Late majority: Skeptical adopters (34%).
• Laggards: Late adopters with a negative attitude towards technology (16%).

Market Sizing

• Estimating potential customers and revenue.
• Useful for investors in assessing market potential.

Market Validation

• Process of confirming customer needs and product desirability with potential users.
• Necessary for assessing the viability of a new product/service.

Types of Experiments

• Interviews gather feedback.
• Paper tests are initial prototypes.
• Advertising tests assess response levels.
• Buttons to nowhere test customer engagement.
• Landing pages measure customer reactions to calls to action.
• Task completion tests usability.
• Prototypes are early versions of a product.
• Preselling involves booking orders before product development is complete.
• Live products/businesses use real-world implementations to gather data.

Fidelity Levels of Prototypes

• Low-fidelity: quick and inexpensive prototypes; used to explore options and assumptions.
• Medium-fidelity: more detail and realistic prototypes used for determining how the product will look and feel.
• High-fidelity: most realistic representation before production; close to the final product with focus on functionality, look and feel.

Storyboarding

• Visual tool for illustrating business concepts; used for explanation and clarity.

Scientific Method

• Identifying the question, gathering information, forming a hypothesis, testing the hypothesis, analyzing the result, and drawing conclusions are essential in experiments.

Customer Feedback (Interviewing)

• Using prototypes allow for interaction to gather customer feedback.
• This method tests the value of products/services, helps improve products, and ensures the product is reaching the right audience.

Curiosity Model

• Five-Dimensional Model of Curiosity outlines recognizing knowledge gaps and striving to fill them, important qualities for evaluating potential opportunities.

Social Capital

• Includes human capital (skills, knowledge) and social capital (relationships with others who cooperate), allowing for differentation and success. This is divided into cognitive (norms), structural (connections), and relational (trust) dimensions.
• Benefits of strong social capital include emotional/social support; drawbacks include potential restrictions.

Network Advantages

• Private information
• Access to diverse skills/knowledge (broader perspective)

Impression Management

• Paying close attention to how people perceive you; taking steps to be perceived the way you want to.
• Implicit bias: subconscious attitudes/stereotypes affect understanding.
• Lack of confidence: impacts communication; important to address potential issues.
• Stakeholder involvement: offering support, resources, perspective, feedback—steering the venture.

Start-up Incubators and Accelerators

• Incubators: help early-stage entrepreneurs refine ideas and develop viable business models.
• Accelerators: support existing ventures to scale and grow their business rapidly (focused programming).
• Examples of the differences in purpose, length of engagement, and fee required are outlined in tables.

Founding Teams

• Teams of people with diverse skills creating a company.

Work Ethics

• Homogenous/heterogeneous teams; teams composed of similar/diverse attributes.

Revenue Model vs. Business Model

• A revenue model outlines how a company will earn revenue to generate profits; a key component of a business model.
• A table outlines ten revenue models, including Unit Sales, Advertising, Data, Licensing, Franchising, Subscription, Professional, Utility and Usage, and Freemium.

Pricing Strategies

• Competition-led pricing: copying competitor prices
• Customer-led pricing: adjusting to customer willingness to pay
• Loss leader pricing: offering products/services below cost to attract customers.
• Introductory pricing: offering special deals for new products or services
• Skimming: initial high-pricing for new, unique products/services
• Psychological pricing: use of techniques to make products seem cheaper than they are to attract customers
• Fair pricing: mutually beneficial prices for both seller and buyer
• Bundled pricing: offering multiple products/services together at a discounted price..
• Cost-led pricing: figuring out costs to set prices.
• Target-return pricing: setting prices considering investment (amount of capital/investment).
• Value-based pricing: determining price based on customer value.

Failure Spectrum & Resilience

• Entrepreneurs often face legal, ethical, process, and skill-related failures. Lack of ability or overextension are reasons for failure.
• Strategies for overcoming failures are outlined and include resilience (grit qualities/strategies), perceptions and thoughts in response to adversity, reactions.
• Psychological and behavioral factors affect how one can bounce back from challenges.

Bootstrapping

• Building a business using internal resources to avoid outside funding, loans, or investors.
• Table 12.1 summarizes the pros and cons of bootstrapping.

Crowdsourcing & Crowdfunding

• Crowdsourcing: leveraging the internet to gather inputs and manage project work; includes unskilled or inexpensive labor in gathering project data
• Crowdfunding: using the internet to raise funds for new ventures or ventures explained in Chapter 6.

Equity Financing

• Sale of company shares in exchange for capital.
• Stages of equity financing (Seed Stage, Startup, Early-Stage) and characteristics are outlined.
• Different types of investors (Angels, Venture Capitalists); comparison tables are offered to differentiate between the two main types of investors.

Different Types of Financing/Investors

• Angel investors—individuals providing funds from personal capital.
• Venture capitalists—professional investors focused on emerging companies.
• Bank loan—borrowing money from a bank.
• Other funding types/investors, and due diligence, are covered.

Marketing Mix/The 4Ps

• Product: characteristics, features, branding
• Price: value, price point, competition
• Promotion: advertising/communication
• Place: distribution/accessibility
• People: personnel involved in sales and marketing decisions
• Physical evidence/packaging: visual appeal and presentation.
• Processes: efficiency.