Comm 320 Notes - Chapter 7: Developing Customers PDF

Chapter 7 Developing your customers **7.1 Define customers and markets.** A customer = is someone who pays for a product or service Customer becomes a consumer when they use the product or service \*A market is a place where people can sell goods and services (the supply) to people who wish to...

Chapter 7 Developing your customers **7.1 Define customers and markets.** A customer = is someone who pays for a product or service Customer becomes a consumer when they use the product or service \*A market is a place where people can sell goods and services (the supply) to people who wish to buy those goods and services (the demand). \*Supply = refers to the sellers who compete for customers in the marketplace \*Demand implies the prospective customers' desire for the good and services available **A market is:** 1. A set of actual or potential customer 2. For a given set of products or services 3. Who have a common set of needs or wants? 4. Who reference each other when a buying decision **A big part of entrepreneurship is discovering a market opportunity.** **How entrepreneurs identify market opportunities depends on their experience** 1. Novice entrepreneur = focus on the novelty or newness of the idea 2. Experienced entrepreneur = focus on developing their idea into a viable product that will attract customers and generate money **7.2 Differentiate the types of customers entrepreneurs may encounter** ***Actors in buying process:*** 1. **End user**: the customer who will use your product. (buy it, use it, tell you if they like it or not) 2. **Influencer:** Customer with a large following who have the power to influence purchase decisions. 3. **Recommenders:** People who may evaluate your product and tell the public about it, such as bloggers, experts in the industry. (Their opinion has the power to make or break your wonders for that product 4. **Economic buyers:** customers who can approve large-scale purchases, such as buyers for retail chains, corporate office managers, and corporate VPs. Economic buyers have the power to put your product on shelves, physically or virtually. Connecting with economic buyers brings you one step closer to the end-user customers you want to have the opportunity to buy your service or product. 5. **Decision makers**: customers like economic buyers who are positioned higher up in the hierarchy and so have even more authority to make purchasing decisions. The ultimate decision makers do not need to be CEOs---they could also be parents who have the power to approve purchases for their family. 6. **Saboteurs:** According to entrepreneur and educator Steve Blank, saboteurs are anyone who can veto or slow down a purchasing decision---from top managers, to friends, spouses, and even children.8 Saboteurs are not simply dissatisfied individuals who voice dissent for a product, service, or entire brand; they intentionally work to harm the company's reputation ***Customer personas*** \*Building personas is a powerful way to anticipate buyer behavior and help create more targeted messaging to attract your ideal customers. It's a representation of the most likely type of people that will buy and use what you are offering. ***A customer persona consists of six items:*** 1. **Demographics**: Demographics are useful data in identifying your target end user, but they may not be entirely accurate when it comes to understanding your end user. For example, if your customers are all men in their 30s living in a particular geographic location, it doesn't tell you much about their attitudes or likes and dislikes. It is important to analyze demographics, but don't place too much emphasis on them. 2. **Psychographics**: Psychographics describe the psychological attributes (attitudes, values, or fears) of your target end users. Unlike demographics, which provide basic information about your users, psychographics presents a more in-depth understanding, such as their aspirations, whom they admire, what they believe, and so on. Psychographic data is difficult to get, however, and even harder to analyze for accuracy. 3. **Proxy products**: Proxy products give you an idea of what else your potential customers are likely to buy or are currently using. For example, people who already buy from high-end fashion brands are more likely to buy an expensive piece of clothing. Proxy products can also display some demographic and psychographic characteristics. For instance, people who buy from farmer's markets rather than from potentially cheaper supermarkets may be interested in promoting sustainability. This group might also be interested in eco-friendly products, such as clothes made from recycled fabric or homemade skincare merchandise. 4. **Day in the life**: One of the most useful ways entrepreneurs can create a profile of their end users is to walk in their shoes for a day. This method is particularly effective after you have spent some time observing and talking to a group of end users. Creating this real-world story puts all the data into perspective and provides deeper insights into the behavior of your potential customers. 5. **Biggest fears and motivators**: Find out what keeps your end users awake at night and identify their top priorities to understand their biggest fears and motivators. This exercise is best carried out by sitting with a group of customers, making a comprehensive list of all their concerns, and asking them to score their priorities from highest to lowest. 6. **Challenges and pain points**: What problems or pain points is the person depicted in the persona facing that your product or service will potentially solve? Don't forget to connect this back to proxy products to ensure that what you are offering solves the customer's problem better or in an innovative way. ***A Customer Journey Map*** Benefits: - Presents a clear picture of how your customers interact with your business, including their goals, needs and expectations. - Clarifies what your customers think and how they feel about their experiences by identifying the positive and negative emotions. - Confirms whether the customer journey proceeds in a logical order. - Highlights the gap between the desire and actual cx experiences. - Allows you to connect to customers on an emotional level. ***Elements of a customer Journey Map*** 1. **Discovery:** A need has been identified by the customer. In this case, Darnell needs the right bag for his business trip. 2. **Research:** Once the need has been identified, the research stage begins. In trying to find the right bag, Darnell starts researching luggage online, checks prices, compares brands, reads reviews, and asks his friends for their recommendations. 3. **Purchase**: Darnell finds what he is looking for and makes a decision to purchase the bag. 4. **Delivery:** With the payment made online, Darnell receives an email confirmation, and the product is delivered a few days later. 5. **After sales**: Darnell receives a thank, you note and a discount coupon for future purchases. **Confirming your timing:** - Data is useful - Website analytics - Social media tools - Direct customer contact **7.3 Identify Your customer through segmentation.** **Customer segments can be defined in four ways:** 1. Who are they? 2. Where are they? 3. How do they behave? 4. What are their needs? **Target Customers:** - **Innovators (2.5% of customers):** These are the first customers to try a new product. They are enthusiastic about new technology and are willing to take the risk of product flaws or other uncertainties that may apply to early versions. - **Early adopters (next 13.5% of customers):** This is the second group to adopt a product. Like innovators, they tend to buy new products shortly after they hit the market. However, unlike innovators, they are not motivated by their enthusiasm for new technology. Early adopters are usually influential people from business or government who make reasoned decisions as to whether to exploit the innovation for competitive advantage. - **Early majority (next 34% of customers):** People in this category tend to take interest in a new product once it begins to have mass market appeal. They are both practical and extremely risk averse, preferring to wait and see how others view the technology before they buy it themselves. Consequently, they look for opinions from their peers or professional contacts to support them in their decision to invest. It is essential for entrepreneurs to appeal to this group, given that it makes up more than one third of the life cycle. - **Late majority (next 34% of customers):** These customers are typically skeptical, pessimistic, risk averse, and less affluent than the previous groups. However, because this group makes up such a large portion of the life cycle, it cannot be ignored. It is possible for entrepreneurs to win over this group by providing simpler products or systems at an affordable cost. - **Laggards (final 16% of customers):** People in this final category are the last to adopt a new innovation. They tend to have a negative attitude toward technology in general and have a strong aversion to change. ***4 factors that define the launch market:*** 1. Customers in that market buy similar product 2. Those customers have similar expectations 3. Located in city or town 4. Use word of mouth, through social media to share their experience Then you can use the 3 steps to **cross the Chasm** 1. Create the entire product first 2. Position the product 3. Distribute the product through the right channels **The Tornado** Moore suggests that if the bowling strategy is executed successfully, your product and your business may enter a tornado. Being "in the tornado" means that your product is in high demand and your business is experiencing rapid growth. During this period, it is essential to meet customer demand and ship the product efficiently. **Main Street** Following the tornado, your business is likely to enter a period of calm. Your product has become part of the mainstream, proven to be a success in the market, and has been widely adopted. However, there is still work to be done. Now is the time to leverage your market position by further enhancing your offering to ensure that your customers do not switch to a competitor. **7.4 Market sizing** **Three important acronyms that represent different subgroups of the market:** 1. TAM, or total available market, refers to the total market demand for a product or service. 2. SAM, or serviceable available market, is the section of the TAM that your product or service intends to target. 3. SOM, or share of market, is the portion of the SAM that your company is realistically likely to reach. **Calculating Market Size** 1. Define your segment of the market 2. Conduct a top-down analysis (involves determining the total market and estimating your share of the market) 3. Conduct a bottom-up analysis ( involves estimating potential sale using calculations in order to arrive at a total sale figure) 4. Don't forget to do sanity checks 5. Check out the competition **Chapter 8** **Testing and experimenting with new ideas** **8.1 Define experiments and describe why we do them** *Market validation*: process of interacting with potential customers to acquire reasonable evidence that a need is being met with a new product or service that people are willing to pay. *An experiment:* a test designed to help prove or disprove the validity of a hypothesis **Five Characteristics of Good Experiments** 1\. They are structured and follow a particular template. 2\. They are focused and don't try to test too many things at the same time. They focus on a core hypothesis. 3\. They are believable, so you can trust what you learn. 4\. They are flexible, so you can make changes while in the experiment if necessary. 5\. They are compact, so you can learn quickly. **8.2 identifying the types of experiments most commonly used** 1. **Interview**: are a fast and inexpensive way to get feedback, validate needs, and acquire new ideas from your assumed target market. 2. **Paper Testing**: creating a paper test (also known as a rapid prototype) is a simple way to outline your vision and to spot any mistakes before the process goes any further. 3. **Advertising**: involves spreading the word about your business using brochures or social media directed to your relevant target market and assessing the level of response. 4. **Button to Nowhere**: Say you want to add a new feature to your website or app, but first you want to find out if your customers will engage with it. Instead of spending hours building this new feature, you could use a test called a "button to nowhere." 5. **Landing Page**: Another useful way to gauge the level of customer response to your business's website is to include a particular call to action, such as "Click here for more information." 6. **Task Completion: (**also known as usability testing) involves watching someone use your product to understand what works and what doesn't. 7. **Prototype:** is an early version of a product. There are many kinds of prototypes and prototyping (which we'll discuss later). Even the paper test and wireframe previously discussed fall into the category of "rapid prototyping." 8. **Preselling**: is a testing technique that involves booking orders for your product before it has been developed. 9. **Live Product and Business:** You are up and running for real! Thanks to all the previous tests you have carried out, you have gathered enough insights and validation to launch your live product and business in the marketplace. **8.3 Explore Prototypes in greater depth** **Fidelity Level** **Low-fidelity prototype** **Medium-fidelity prototype** **High-fidelity prototype** Storyboarding = business and management tool for explaining projects or products to employees, clients, customers and stockholders - It provides you with a better understanding of your own idea and how it interacts with customers. The problem- solution-benefit framework - What is the problem your customer is experiencing? - What are you offering as a solution to the problem? - How will your customer benefit from your product/service offering? A close-up of a diagram Description automatically generated ***8.4 how the scientific methods guide experimentation and testing new ideas*** **[Scientific method ]** 1. **Identify the question.** 2. **Gather background information.** 3. **Develop a hypothesis** 4. **Test your hypothesis** 5. **Analyze the result** 6. **Form a conclusion** ***8.5 Explore the interviewing process for customer feedback.*** **The case for curiosity** 1. Deprivation sensitivity = Recognizing a gap in knowledge, the frustration this brings, determination to fill it 2. Joyous exploration = Delighting in the wonder of the world and the fascination it holds 3. Social curiosity= Enjoying the process of learning about others by talking, listening, and observing 4. Stress tolerance = Being able to handle the anxiety that comes with the new experiences or uncertain situations 5. Thrill seeking = being open to taking certain social, financial and physical risks to experience new adentures **How To Stay Curious** 1. Connect with others 2. Be a curious ambassador 3. Focus on learning 4. Broaden your networks 5. Ask Why? What ? and how might be? **8.6 Evaluate the value of collecting your own data.** **Unconscious bias** is the tendency to make unfair judgments or decisions toward a certain person or group based on deeply ingrained thought patterns, interpretations or assumptions that are outside our conscious awareness. **Confirmation bias** is the tendency to only use positive information, interpret new information as positive, or ignore information that discredits your idea or business. **Chapter 9** **Developing Networks and building teams** **9.1 The power of Networks** We can differentiate ourselves from others in two main ways: 1. Human capital: our skills and knowledge (what we know and who we are) 2. Social capital: our personal social network populated with people who willingly cooperate **Social Capital is divided into three dimensions :** - **Cognitive** : includes the norms, visions, values, interpretations and beliefs you may share with others - **Structural** - **Relational** : what contracts represents, such as trusting relationships **Benefits to Social Capital** - Sense of shared value - Emotional, social, economic support **Downside to social Capital** - Strong ties can be restrictive. - Prevention of open mind to alternatives - Too much loyalty 2. **Demonstrate the value of networks for entrepreneurs.** ***Advantages to Networks*** - 3 main advantages to networks - Private information: not available to the public - Access to diverse skillsets: highly diverse network of contacts gives a broader perspective - Power : can provide expert advice and introduce you to powerful people Types of support: Career support, Psychosocial support and Role Modeling The Organization for Economic Co-operation and Development (OECD), a global organization promoting economies throughout the world, identifies three main varieties of social capital: **Bonds:** Connections with people who are just like us, such as family, friends, and others who have a similar cultural background or ethnicity. **Bridges:** Links that go further than simply sharing a sense of identity; for example, making connections with classmates or colleagues who may have different backgrounds, cultures, or other characteristics. **Linkages:** Connections to people or groups regardless of their position in an organization, society, or other community. ***Impression Management:** is paying conscious attention to the way people perceive you and taking steps to be perceived in the way you want others to see you* - ***Implicit bias:** refers to the attitudes or stereotypes that affect our understanding actions and decisions in an unconscious way* - ***Lack of confidence*** *A stakeholder "self-selects" into an entrepreneur's network to offer some type of short-term or long-term commitment to the venture and to connect the entrepreneur with resources---whether subject-matter expertise, funding, advice, introductions to others, new perspectives, feedback on concepts, or mentorship---in an effort to steer the venture in the right direction.* 3. ***Describe different ways of building networks*** *A start-up incubator = is an organization that helps early-stage entrepreneurs refine an idea and help transition from an idea to viable business model.* *a start-up accelerator = is an organization that provides tailored support for existing start-ups that have already built an MVP by helping to scale and grow their business through focused programming designed to accelerate sales and establish a presence in the market.*  ***A founding team** is a group of people with complementary skills and a shared sense of commitment coming together in founding an enterprise to build and grow the company. The founding team usually consists of the founder and a few cofounders who possess complementary skills.* *Founding Team Members* - *Determination* - *Resilience* - *Tenacity* - *Commitment* - *Curiosity* - *Work Ethic* - *Humility* - *: **homogenous teams**, whose members possess the same or similar characteristics---such as age, gender, ethnicity, experience, and educational background---**heterogeneous teams**---meaning a group of people with a mix of knowledge, backgrounds, skills, and experience? Although there is no conclusive research to suggest that homogenous is better than heterogeneous or vice versa, studies have shown that there are benefits and disadvantages to both.* ***Chapter 10*** ***10.1 Revenue Model vs Business Model*** ***A revenue model = is** a key component of the business model; it identifies how the company will earn revenue and generate profits. In other words, it explains how entrepreneurs will make money and capture value from delivering on the customer value proposition (CVP) that is outlined as part of their business model.* A screenshot of a computer Description automatically generated ***10.2*** **How companies generate revenue by profiting from "free"** **The freemium revenue model =** involves mixing free (mainly web-based) basic services with premium or upgraded services. In this model, businesses create at least two versions or tiers of products or services. The company gives away the low-end version of the service for free. The free "basic" version usually comes with limits on usage and functionality. The company also creates and sells higher-end versions that offer more functionality and performance. **Another type of free financial model is direct cross-subsidies**, which refers to pricing a product or service above its market value to pay for the loss of giving away a product or service for free or below its market value. **10.3 Identify the drivers that affect revenue as well as cost** **[Four Key revenue drivers ]** - Customer - Price - Selling process - Frequency **[Cost Drivers ]** - Cost of good Sold = The cost is in how much money it takes to produce each T-shirt: the material, the design, the manufacturing, the packaging, and so on. Once you know how much goes into producing your T-shirts, you can think about ways to reduce costs, if you need to. - Operating Expenses = are the costs of running your business, including your rent, utilities, administration, marketing/advertising, employee salaries, and so forth **10.4 different types of pricing strategies** - **Competition Led Pricing =** you copy the prices suggested by other businesses selling the same or very similar products and services. However, matching a price is not generally enough to encourage customers to buy from you, especially if you're not an established brand. You need to find other ways to differentiate your product from your competitors to attract more customers. - **Customer-Led Pricing =** you ask customers how much they are willing to pay and then offer your product at that price - **Loss Leader =** is the practice of offering a product or service at a below-cost price in an attempt to attract more customers. This involves giving special discounts and reducing prices. - **Introductory offer =** to encourage people to try your new product by offering it for free or at a heavily discounted price for a certain number of days or to the first 100 customers. Introductory pricing is generally used for new products or services on the market**.** - **Skimming =** is a form of high pricing, generally used for new products or services that face very little or even no competition. If your product is the first on the market, then you can sell it at a higher price and retain the maximum value upfront, until you are forced to gradually reduce your prices when competitors launch rival products. - **Psychological Pricing** = is intended to encourage customers to buy based on their belief that the product or service is cheaper than it really is. Flash sales, "buy one get one free," and bundled products are all methods of psychological pricing. - **Fair Pricing =** is the degree to which both businesses and customers believe that the pricing is reasonable. Having done your financial homework as an entrepreneur, you might think your product or service is priced fairly---but that doesn't mean your customers will. - **Bundled Pricing =** is packaging a set of goods or services together; they are then sold for a lower price than if they were to be sold separately **10.4 Calculating Price** - **Cost-Led Pricing**= involves calculating all the costs involved in manufacturing or delivering the product or service, plus all other expenses, and adding an expected profit or margin by predicting your sales volume to get the approximate price. - **Target-Return Pricing =** involves setting your price based on the amount of investment you have put into your business - **Value-Based Pricing =** involves pricing your product based on how it benefits the customer. Your buyers have a major influence over your pricing strategy. Think about what your product means to your buyers. Is it going to save them money or make them money? Let's say you have created a water softener suitable for homeowners to install. **Chapter 11** **11.2 Explore the spectrum of reasons for failure**  **11.5 The role of resilience in overcoming failure** **Resilience:** Can help entrepreneurs keep going and manage through the stress or even thrive **Grit:** is the quality that enables people to work hard and sustain interest in their long-term goals. In the case of failure and overcoming challenge and stress, resilience is what's needed most. **Psychological resilience is** "a responsive process that involves perceptions, thoughts, coping strategies, and behaviors in relation to adversity. Resilience isn't something you are born with, rather, it's something entrepreneurs can develop to cope with all levels of adversity. Without resilience, your performance mentally, socially, and financially is likely to suffer, and lack of resilience is a common reason entrepreneur ultimately quit **Developing Resilience** **These are 4 factors that contribute to building entrepreneurial resilience in adverse situations.** - **Emotional factors:** How we feel matters. Sometimes we can't help but feel stressed and overwhelmed, but going into a situation with a positive emotional state can help build your resilience to adversity in the moment. - **Cognitive factors**: Our mindset, how we see the world and ourselves, matters. If we can't see the opportunity in the challenge or believe that we have the ability and coping strategies to meet the challenge and solve the problem, resilience will be hard. Ongoing learning and education is important as well. Learning new methods and seeing how others overcome failure and challenges can help you develop your resilience. - **Prior experience**: Because resilience can be developed, every adverse experience we have and overcome contributes to our resilience "muscle." Both previous business failures and general life hardships can help build future resilience. - **Social factors:** Networks, family, founding team, and even a tight-knit community can all build a safety net that helps being resilient seem easier. Having strong social connections to go to for support is a way to build your resilience, which is why starting a business with a partner or team can help. **Chapter 12** **12.1 Define bootstrapping and illustrate how it applies to entrepreneurs.** **A venture capitalist** is a professional investor who generally invests in early stage and emerging companies because of perceived long-term growth potential. **In entrepreneurship, bootstrapping** is the process of building or starting a business with no outside investment, funding, or support. **Bootstrapping** is all about finding creative ways to access every resource you have available to launch your venture while minimizing the amount of cash you spend. A list of words on a blue background Description automatically generated 12.3 crowdsourcing and crowdfunding **The emergence of crowdfunding**= the process of raising cash for a new venture from a large audience (the "crowd"), typically through the internet---has been a new pathway for many entrepreneurs. People who use crowdfunding to raise money are known as "crowdfunders," and people who contribute financial support to crowdfunding ventures are known as "backers. **Crowdfunding focuses** on raising cash for new projects and businesses, whereas, as explained in Chapter 6, **crowdsourcing** involves using the internet to attract, aggregate, and manage inexpensive or even free labor from enthusiastic customers and like-minded people. Crowdsourcing for - Customer engagement and satisfaction - Reducing labor costs - For innovation - As a product **Crowdfunding sites rules**  \*For start-ups that are seeking investment in return for shares or equity, there is a new form of crowdfunding called equity crowdfunding---a form of crowdfunding that gives backers the opportunity to become shareholders in a company. **12.5 Discuss the 4 contexts for crowdfunding.** A diagram of a crowdfunding Description automatically generated  \***Best practices entrepreneurs use to conduct successful crowdfunding campaigns** **1.** Make sure your product or service solves a real problem 2\. Test and refine your idea 3\. Be prepared 4\. Seek and Accept Advice 5\. Start Socializing your campaign Early 6\. Money Matters 7\. Focus on the video 8\. Make the most of crowdfunding opportunities 9\. Promote your campaign extensively 10\. commit to and manage your campaign **Chapter 13** **13.1 Define equity financing for entrepreneurs and outline is main stages.** - many entrepreneurs begin to look at the possibility of equity financing, which is the sale of shares of stock in exchange for cash. It gives entrepreneurs capital---that is, the financial resources needed to run the business, including producing and selling products. In other words, equity financing is a way to acquire capital from investors to start or grow a business. - Moyer says new entrepreneurs make two mistakes: "[The first is to divide the pie before you build the company.] This is quite common, and founders often wind up where my hapless student did. The other mistake is dividing up the pie after you build the company, which often leads to internal battles that can cripple a start-up team." [Stages of Equity Financing ] 1.Seed Stage financing = usually consists of small or modest amounts of capital provided to entrepreneurs to prove a concept 2.Startup financing = is the money provided to entrepreneurs to enable them to implement their idea by funding product research and development 3\. Early-stage financing: consists of larger amounts of funds provided for companies that have a team in place and a product or service tested or piloted but as yet show little or no revenue 4.Seeking second-stage or late-stage financing 5.Going Public through initial public offering (offering shares to the public, allowing anyone to buy ownership) 6\. Bridge financing Forms of Equity Financing: 3 Fs ( friends, family and fools) **Angel investors**: use their own money to provide funds to emerging start-ups run by entrepreneurs who are neither friends nor family. **Venture capital**: a professional investor who generally invests in early stage and emerging companies because of perceived long- term growth potential. A screenshot of a chart Description automatically generated What investors look for - Product : does it stand out? - Competition: can you outperform? - Growth potential: market size, business module - Financial management: what have you accomplished so far with the funds, what will u do with the investment - Team: experts ? - Value add: how much vale can investor bring to your business through their expertise - Exit Plan: how will investors receive a return on investment How can entrepreneurs value their company - Check similar companies in the industry - True valuation between oweners and investors **Pre-money valuation** is the company's value before it receives outside investment, **post-money valuation** is the company's value after it receives a round of financing. **A unicorn** is a tech start-up company that has received a \$1 billion valuation as determined by private or public investment.1Although unicorn startups are rare (there is a less than 1% chance of a startup becoming a unicorn after raising venture capital), they are becoming more common Convertible debt = short term loan that can be turned into equity when future financing is acquires ( basically instead of giving cash, you give a share of your company) Advantages - Removes the need for valuation - Your investors may be entitled to a discount off the share pric converting the debt into equity - The entrepreneur will remain the majority stockholder, with no interference from your lenders Disadvantages - Having their money tied up until the debt is converted into equity **Angels** are eligible to invest as long as they are accredited investors, which means they earn an annual income of more than \$200,000 or have a net worth of more than \$1 million **Angels** are often experienced, self-made entrepreneurs themselves and can add significant value by providing advice, skills, and expertise, as well as lucrative contacts Different types of Angels - **Entrepreneurial angels** are entrepreneurs who have already successfully started and operated their own businesses, which they may or may not still be running - **Corporate angels** are individuals who are usually former business executives, often from big multinationals, looking to use their savings or current income to invest - **Professional angels** are doctors, lawyers, dentists, accountants, consultants, and the like who use their savings and income to invest in entrepreneurial ventures. (More silent investors) - **Enthusiast angels** are independently wealthy retired or semiretired entrepreneurs or executives who often invest their personal capital in startups as a hobby. **What about a bank loan** - **Debt financing** means borrowing money to start a business that is expected to be paid back with interest at a designated point in the future. They look for the 5 C's = Capital, collateral, Capacity and credit ranking **Due diligence** is a rigorous process carried out to evaluate an investment opportunity prior to a deal being finalized. When considering an investment opportunity, both angel investors and VCs conduct a due diligence process, but typically, angel investors and groups do not carry out as much due diligence as VCs do due to time constraints, resource constraints, and a general lack of information given the early stages of the ventures they're more likely to invest in. Exits/Harvesting strategies. **Initial public offering**: s a company's first opportunity to sell stocks on the stock market to be purchased by members of the general public. VCs choose an opportune time to launch an IPO in order to maximize returns on exiting. **Mergers and acquisitions** **buyback:** which gives the entrepreneur an opportunity to buy back a venture capital firm's stock at cost plus a certain premium. However, buybacks are rare because the young company usually does not have the cash to buy out its investors, unless it has reached a highly profitable stat **Chapter 15** **The Basic Principles of Marketing** **The marketing mix :** framework that helps define a brand or company and differentiate ir from the competition. **Product**: is anything tangible or intangible (such as a service) offered by the company. This includes the features, the brand, how it meets customer needs, how and where it will be used, and how it stands out from competitors **Price**: is the amount that the customer is expected to pay for the product, its perceived value, and the degree to which the price can be raised or lowered depending on market demand and how competitors price rival products. **Promotion:** all the ways in which companies tell their customers about their offering. This may involve advertising online, through social media, direct mail, in the press, or even on TV if you have the budget. **Place:** is where the product is actually sold to your target market: online, retail stores, catalogs, pop-up events, and so forth. It also changed from 4Ps to 7Ps Adding **People**: the people responsible for every aspect of sales and marketing **Packaging**: exploring every visual element of the offering external appearances **Positioning:** marketing strategy that focuses on how customer think or talk about the product relative to your competitors \*According to this research, the 4 Ps model overemphasizes product technology and quality, understates the necessity of explaining the value of the product and why customers need it, and distracts businesses from promoting themselves as important sources of information and problem solving **The S.A.V.E Framework** **Solution** rather than product: Researchers argue that businesses tend to get caught up in the features and functions of their product, when all customers really want to know is how the product solves their problems. **Access** rather than place: Here, the focus is on how accessible your company is to your target customer. The exact location where someone can purchase your product is not so important. **Value** over price: Customers are drawn to value more than to price. This means that entrepreneurs need to build a strong case for showing customers why their product offers superior value to the competition rather than focusing on the actual price tag. **Education** rather than promotion: Today's businesses are in a good position to educate customers by providing information that they want to read that is up to date and relevant \***Entrepreneurial marketing** is a set of processes adopted by entrepreneurs based on new and unconventional marketing practices to gain traction and attention in competitive markets.5 It's about capturing value in the marketplace and building a customer base from scratch. - Entrepreneurial marketing focuses on building trust, finding out customer preferences, and creating ongoing value. It also provides the entrepreneur with the opportunity to highlight the company's strengths while showcasing the different ways the product adds value. **Core Characteristics of Entrepreneurial Marketing** - Resource constraints - Speed and experimentation - Integrated marketing communication - Brand building - Growth and scale **Guerrilla marketing** is a low-budget strategy that focuses on personally interacting with a target group by promoting products and services through surprise or other unconventional means. \*Guerrilla marketing strategies are almost limitless: email, interactive poster campaigns, advertisements on cars, T-shirts, street branding (writing marketing messages with paint or chalk on pavements or walls), characters in costume, flash mobs (a large group of people that seemingly comes out of nowhere to perform an act in a public place), projecting visual or written content in public areas, **Building a Brand** **Branding:** is the process of creating a name, term, design, symbol, or any other feature that identifies a product or service and differentiates it from others **A brand strategy** is a long-term plan to develop a successful brand. It involves how you plan to communicate your brand messages to your target customers. This brand message can be channeled through your advertising, distribution, and packaging. **How to build a Brand** 1. Choose a name 2. Design a Logo 3. Spread the word 4. Know your customer 5. Become your brand 6. Write a Tagline 7. Always deliver on your brand promise **Social responsibility** marketing is a marketing approach designed to attract customers who want to support a cause or make a positive difference via their purchasing decisions **Social media marketing** - Start with research - Think about your goals - Design your strategy - Post regular updates - Monitor your social media **Content marketing, email marketing** **Measuring results** **Step 1: Establish purpose.** The first step in measuring the results of your digital marketing is to state what you are trying to do. Do you want to increase website traffic, generate leads, or drive sales? Once you know what you want to achieve, you can start to track your progress and measure your results. **Step 2: Choose the right metrics.** There are a number of different metrics that you can use to measure the results of your digital marketing. **Step 3:** **Use analytics tools**. There are a number of different analytics tools that you can use to track your website traffic, conversions, and other metrics. Some of the most popular include Google Analytics, Adobe Analytics, and Kissmetrics. **Step 4: Analyze your results**. Once you have collected data from your analytics tools, you need to analyze your results to see what's working and what's not. This will help you make adjustments to your digital marketing strategy as needed. **Step 5: Make adjustments** as you go. Based on your analysis of your results, you may need to make adjustments to your digital marketing strategy. **Step 6: Repeat the process**. Measuring the results of your digital marketing is an ongoing process. You should regularly review your results and adjust your strategy as needed  **Influencer Marketing strategy** - Define goals - Set a budget - Choose a type of Campaign - Find the right brand to influence - Promote your campaign - Track the success of the campaign - A close-up of a social media plan Description automatically generated