MGT 420 Module 5: Marketing Strategy PDF

Module 5: Marketing Strategy and Delivering the Message of Value Dr. Kipp A. Krukowski MGT 420 – New Venture Creation Why is today’s topic important? We will learn effective ways to focus our marketing efforts and communicate the benefits. We have limited time and money to do this right as...

Module 5: Marketing Strategy and Delivering the Message of Value Dr. Kipp A. Krukowski MGT 420 – New Venture Creation Why is today’s topic important? We will learn effective ways to focus our marketing efforts and communicate the benefits. We have limited time and money to do this right as our survival is like a stick of dynamite with the fuse lit and burning! Marketing Strategy Marketing includes all strategies, tactics, and techniques used to: – Raise customer awareness – Promote a brand, product, service, or business – Build and manage long-term customer relationships Marketing has been described in terms of the “5 Ps”: – People, or customers. – Product, or what is being offered to the customer. – Price, or what the customer is willing to pay. – Place, channel which customers can find it. – Promotion, strategies to create awareness and reach customer. Marketing Strategy A marketing strategy that pushes a message to potential customers through advertising and promotion is a very costly approach and does not make sense for entrepreneurs, who typically have limited resources. – Entrepreneurs must design products or services with the customers’ needs in mind and build long-term relationships. – That means that much of the “selling” has been taken care of by giving customers what they want, when they want it, and in the way they want it.  Customer Experience Study found experiences now influence 2/3 of the decisions (other 1/3 mostly price) Consumers’ expectations are high, primarily in four ways: 1. Consumers want to interact with anyone, anytime, and anywhere in the easiest way possible. 2. They want to be able to do new things with new information in new ways. 3. They expect everything to be targeted to their precise needs, so they can have the unique experience they want. 4. They want this all to happen easily with no learning curve. Marketing must consider all the touch points New Product Adoption / Diffusion Curve 2.5% 13.5% 34% 34% 16% Crossing the Chasm Crossing the “chasm”—a period when the early adopters have been exhausted and the technology abruptly stops selling. – Stall due to only innovators and early adopters with an interest in the technology, with rest of market, not experiencing the “pain” One approach is to identify multiple niche markets getting into different customer sectors (called the Bowling Alley – add bowling pins) simultaneously, then build a critical mass – Example: eBay, collectibles & other…then specific categories – If done well, may produce a flashpoint “tornado,” year- over-year growth of +100% Adoption Rate Rate at which a new product is adopted depends on: – Perceived benefit – Price and total product costs – Usability – Acceptance of promotional efforts – Distribution intensity – Switching costs – Learning curve – The ability to test the product before purchase  Market Research and Segmentation Market Segmentation - dividing total market into meaningful and distinct customer groups Based on their needs, wants, ability to buy, buying preferences, and other factors that would distinguish the group members (find niche markets): – Geographic data (location) – Demographic data (age, income level, gender, home address, working address, marital status, family status, occupation, ethnicity, religion, and nationality) – Psychographic data (social class, lifestyle, and personality traits) Creating Value Steps to ensure creating value for your customers: – Identify your approach to the market. – Identify a niche that you can dominate. – Identify the intangible benefits you are offering customers, like quality and utility, measured against what they will pay. For a startup venture, two important objectives are: – To create awareness for the company and its brand. – To reach target customers to produce sales quickly. Measuring effectiveness of brand strategy: – Ask customers how they heard about your company / product / service. – Track specific marketing efforts, advertising, and promotion, and match specific performance outcomes to each effort. Promotion Strategies Don’t rely on “Your product selling itself” Advertising and Marketing Methods – Traditional – Newspapers, magazines, radio & TV – Trade Shows – Direct Personal Selling – Most effective but most expensive – Targeted Internet Marketing Ads – Social Media Search Engine Marketing (SEM) & Search Engine Optimization (SEO) – Optimizing a site with appropriate keywords can help customers find a company much faster (track conversion rates) Don’t underestimate the cost! Customer referrals are great, but you can’t rely on it! Facebook Targeting Example Strengthening Your Presentation Make sure your messages sticks – What can you do to communicate clearly? Carmine Gallo Video – Take notes – What are your big take-aways? Strengthening Your Presentation Krukowski, K. A., Pollack, J. M., & Rutherford, M. W. (2023). Winning the opportunity to pitch: Piquing startup investors’ interest by sending the right signals in executive summaries. Business Horizons, 66(1), 75-86. What matters most to early investors? Business Horizons Interview Video – Take notes – What are your big take-aways? https://iu.mediaspace.kaltura.com/media/t/1_8alzxt51 3 Key Take-aways Create a clear message of your value proposition – Use the Twitter-friendly headline technique. Bring numbers to life. Understand those Innovators and Early Adopter segments and focus your efforts there first. You will likely be operating on a shoestring budget so you must figure out which marketing method is going to get you the results with the early potential customer segments. Questions? Dr. Kipp A. Krukowski MGT 420 – New Venture Creation