BUSFF021 Lecture 3 & 4 Entrepreneurial Ventures and Marketing 2024 Lecture Notes PDF

BUSFF021 LECTURE 3 & 4 Entrepreneurial Ventures & Marketing 1  LECTURE OBJECTIVES Understanding the concept of entrepreneurship Describe the process of starting up a business Introduce Business Model Canvas...

BUSFF021 LECTURE 3 & 4 Entrepreneurial Ventures & Marketing 1  LECTURE OBJECTIVES Understanding the concept of entrepreneurship Describe the process of starting up a business Introduce Business Model Canvas 2  Entrepreneurship Entrepreneur – businessperson who accepts risks and opportunities Entrepreneurship – the process of seeking business opportunities Small Business Owner – A person who independently owns a business that has relatively little impact in its market  SME Definition in Malaysia Source: SME Corp. Malaysia 4 SMEs in Malaysia 5 The Importance of Small Business Job creation Innovation Contributions to big business  Stages Of Growth For Entrepreneurial Company 7  Trends in Small-Business Start-Ups Can you guess what is the survival rates of start-ups? – In the past, 95% of the start-ups would close down within 5 years – Today, 44 % of new start-ups can expect to survive for at least 4 years Why do Start-up fail? 9 The Story No One Believed – Airbnb founder Brian Chesky.: https://youtu.be/vEcACMyz3Rc 10  Business Plan Business plan Document specifying the business details prepared by an entrepreneur prior to opening a new business - Helps determine the viability of a business - Strategic guide for a business - Helps obtain financing Outline of a Business Plan 12  Questions? What could be the downside of having a business plan? 13  Business Model Canvas Originally introduced by Alexander Osterwalder in his 2004 thesis, “The Business Model Ontology – A Proposition in a Design Science Approach” Strategic planning tool for business model illustration and development It describes how the rationale of how an organization creates, delivers and captures value Act like an executive summary for the Business Plan Provide big picture view and favour quick reiteration and modification. Consists of 9 building blocks 14 15 16  Value Proposition A value proposition is your solution to your customer's problem. A good value proposition will say how you solve the problem, and why your solution is the best available. 17  Value to Customer Newness Performance Customisation “Getting the job done” Design Brand/status Price Accessibility 18  Articulating value proposition: Articulating value proposition: Sentence #1: Target customer Statement of need or opportunity Product/service name Product/service category Statement of benefit 19  Articulating value proposition: Sentence #2: Unlike (primary competitive alternative) Our product (statement of primary differentiation) 20  Value proposition example: Amazon For worldwide web users who enjoy books. Amazon.com is a retail book seller that provides instant access to over 1.1 millon books. Unlike traditional book retailers, Amazon.com provides the combination of extraordinary convenience, low prices and comprehensive selection. 21  Customer Segments Customer Segment Market – Group of people Segmentation who have similar – process of dividing wants and needs a market into and can be categories of expected to show customer types, or interest in the “segments” same products – The business aims to reach and serve Customer Segments 23  Identifying Customer/Market Segments Geographic Segmentation – geographic units, from countries to neighborhoods, that may be considered in identifying different market segments in a segmentation strategy Demographic Segmentation – a segmentation strategy that uses demographic characteristics to identify different market segments – For example: age, income, gender, ethnic background, marital status, race, religion, and social class  Demographic segmentation Table 11.1 Demographic Variables Age Under 5, 5–11, 12–19, 20–34, 35–49, 50–64, 65+ Education Grade school or less, some high school, graduated high school, some college, college degree, advanced degree Family Life Cycle Young single, young married without children, young married with children, older married with children under 18, older married without children under 18, older single, other Family Size 1, 2–3, 4–5, 6+ Income Less than $15,000, $15,000–$24,999, $25,000–$50,000, $50,000–$100,000, $100,000– $200,000, more than $200,000 Nationality African, American, Asian, British, Eastern European, French, German, Irish, Italian, Latin American, Middle Eastern, Scandinavian Race American Indian, Asian, African American, White Religion Buddhist, Catholic, Hindu, Jewish, Muslim, Protestant Gender Male, Female  Identifying Market Segments Geo-Demographic Segmentation – using a combination of geographic and demographic traits for identifying different market segments in a segmentation strategy – For example: Chico targets female young urban professionals, well educated, 25- to 54-year-olds with high paying professional jobs living in the “downtown” zip codes of major cities  Identifying Market Segments Psychographic Segmentation – a segmentation strategy that uses psychographic characteristics such as lifestyles, personalities, opinions, interests, and attitudes to identify different market segments – For example: The Body Shop (against animals testing)  Identifying Market Segments Behavioral Segmentation – a segmentation strategy that uses behavioral patterns displayed by groups of consumers to identify different market segments – Mark items based on how customers actually behave – For example: All Free Clear detergent for people who have skin reactions to additives in other detergents. Christmas/ Halloween/ Mother’s Day  Total Addressable Market TAM How big is the largest possible market? Serviceable Available Market SAM What proportion of that market fits you? Serviceable Obtainable Market SOM What proportion of that market can you reach? Source: Leet Ventures (2023) Channels 30  Channels Channels have 5 distinct phases Each channel can cover some or all the phases Source: Osterwalder & Pigneur (2010) 31  Customer Relationships It may be driven by: Customer acquisition Customer retention Boosting sales (upselling) 32 Customer Relationships 33  Customer Relationships Categories: – Personal assistance (call centres, email, etc.) – Self-service – Automated services (simulate personal services) – Communities 34 Revenue Streams 35 Revenue Streams 36  B