©2012 IC 2 Institute at the University of Texas at Austin Marketing for Entrepreneurs A Practical...

©2012 IC2 Institute at the University of Texas at Austin

Marketing for Entrepreneurs

A Practical Approach to Segmentation, Targeting and

PositioningGregory P. Pogue, Ph.D.


Workshop Topics

1. Introduction to Marketing Strategy2. Marketing

– 5C’s – only the highlights– Segmentation, Targeting, and Positioning – the

Focus today!– 4C’s – (for another presentation…)

3. Developing a Persuasive Proposal4. Conclusions

2


Disclosure P

3


Marketing Strategy

4


Entrepreneurship According to the “Big Bang Theory”

5

Raj: Indian Ph.D. physicist who cannot speak to women

Leonard: Ph.D. physicist in love with Penny; roommate of Sheldon

Sheldon: Theoretical Ph.D. physicist who is highly socially inept

Penny: Aspiring actress who works at the Cheese Cake Factory

Howard: M.S. Engineer who desires women, but can’t interest one


Marketing in the Context of a Company’s Functions

• Research and Development– Innovates and develops technologies and products

• Operations– Produces the products/services that meet customer need

• Finance– Accesses capital and allocates scare resources across functions

• Marketing– Provides direction for R&D and generates case through acquisition

and retention of customers

6


So What is Marketing Anyway?

1. Sales campaigns for your product?2. Delivering a consistent message about your

product?3. A defined strategic and financial plan for

profiting from your product?

7


Marketing is…

• A defined strategic and financial plan for profiting from your product.

• Defines:– The available market: scope for selling– The segmentation of the market: not all prospects are of

equal proximity and value– The targeting to customers: defines who we can

realistically sell to and at what stage– The positioning of your product: focuses product features,

benefits and messaging to your target

8


Officially, Marketing is…

9

• “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.”

Bennett, 1995


The Value of Marketing

• Pro-forma financials are based on:– Who you will sell to;– How much will they purchase;– At what price; and – What will it cost you to deliver the product and

benefit from the revenue

• Marketing is a plan to make a profit.

10


Marketing Framework


MARKETING BASICS

Marketing Wheel of Fortune


The Circus

13


THE CIRCUS EXAMPLE

• Advertising. Marketing. Sales. Promotions. What are the differences?– If the circus is coming to town and you paint a sign saying

“Circus Coming to the Fairground Saturday,” that’s advertising.

– If you put the sign on the back of an elephant and walk it into town, that’s promotion.

– If the elephant walks through the mayor’s flowerbed, that’s publicity.

– And if you get the mayor to laugh about it, that’s public relations.


THE CIRCUS EXAMPLE

– If, before painting the sign that says “Circus Coming to the Fairground Saturday,” you check community calendar to see whether conflicting events are scheduled, study who typically attends the circus, and figure out how much they’re willing to pay and what kinds of services and activities they prefer, that’s market research.

– If you invent elephant ear-shaped candy for people to eat while they’re waiting for elephant rides, that’s product development.


THE CIRCUS EXAMPLE– If you create an elephant package offering a combination

of a circus ticket, an elephant ear candy, an elephant ride, and a memory-book elephant photo, that’s packaging.

– Assigning a price that is both profitable and attractive to clients is pricing.

– If you get a restaurant name Elephants to sell your elephant package, that’s distribution.

– If you ask everyone who took an elephant ride to participate in a survey to gather their opinion, that’s customer research and feedback.


THE CIRCUS EXAMPLE

– If you follow-up by sending each survey participant a thank-you note along with a two-for-one coupon for next year’s circus, that’s customer service.

– And if you use the survey responses to develop new products, revise pricing, and enhance distribution, then you’ve started the marketing process all over again.


Model Product• A device that will enhance the solubility of sugar in coffee.

• Some examples:

18


Discussion

• Who is the product user?– What do you predict they

will value in the product?– Are all users the same?

What differences have you observed in users of this product?

– Who is your real customer? Does the end user pay for this product?

• Who will “sell” or convey your product to an end user?– What are the different

types of conveying organizations for your product? How do these correlate with different types of end users?

– What do you think each of these “types” value in your product? How does this differ between types?

19


Discussion• What are the features of each product example? • How do these features fit with benefits to potential end

users?• How do these benefits translate to value for your real

customer (end user or market channel)?• Which benefits may be most attractive to customers?• Which products are most “market ready”? Which require

more development?

20


Exercise: Product AttributesProduct Attribute Importance to Customers

(-3 to +3 with 0=average importance)

21

Each Team should use its technology/product description to identify at least six attributes of your product and rate these according to your understanding of customer value and importance.

Adapted from Cliff Zintgraff. – IC2 Institute – July, 2011


Marketing Framework

Start with Highlights from the 5Cs


Context

Model for Marketing Decision-Making:5 C’s

CompanyCore Competencies

CustomerUnmet Needs

CompetitionCompetitive Advantage

CollaboratorsShared Interests

Target Market

Assess the Situation


Understanding the Customer• Who are They?

– Personal characteristics– Product usage patterns

• Why do They Buy?– Needs– Purchase Motivations

• How do They Buy?– Decision-making unit (DMU)– Decision-making process

• What do They Buy?– “Whole” Product or Service– Set of product and non-

product capabilities that meet buying objective

– Set apart from competition

• Where do They Buy?– Appropriate channel design


Discussion

• Who are the customers for our devices that assist the solubilization of sugar into coffee?

• Tell me about them? – Primary habits– Places they frequent– Potential interest in the product

25

©2012 IC2 Institute at the University of Texas at Austin26

Sources of Information About Markets and Customers

• Secondary information– Coupled with knack or

intuitive prediction

• Objective information– Coupled with data-driven

prediction

©2012 IC2 Institute at the University of Texas at Austin 27

The Average American Consumer Quiz % of consumers agreeing

% Male % Female1. A nationally advertised brand is usually better than ________ _________ a generic brand

2. I went fishing at least once in the past year ________ _________

3. I am a homebody ________ _________

5. The government should exercise more control over ________ _________ what is shown on television

6. Information from advertising helps me make better ________ _________ buying decisions

7. I like to pay cash for everything I buy ________ _________

9. I am interested in spices and seasoning ________ _________

Hoch (1988) Journal of Consumer Research

Sample questions

(Note: not all questions included)

©Kate Mackie, Ph.D. – IC2 Institute – July, 2011


Predicting the Interests and Opinions of the American Consumer:

Responding Population Predictive Accuracy

MBAs .09

Everyday Consumers .20

Line Managers .16

Research Managers .23

Hoch (1988) Journal of Consumer Research



Direct Data is Essential!!!!

• Who can you call right now???– Customers– Channels– Enablers– Product and Technology Experts

• Provide examples for our model product

29


Start with Primary Data• One primary tool of the IC2 Institute is the Quicklook• Helps define the “exchange” between company and customer• Methodology:

– Apply fundamental marketing concepts– Apply fundamental networking concepts (degrees of separation)– Conduct primary research to interrogate the market

• Outcomes:– Uncovers the “voice of the market”– Measures technology market proximity – Identifies value proposition within a

value chain– Basis for roadmapping a marketing strategy

30

Adapted from Cliff Zintgraff. – IC2 Institute – July, 2011


Researching Markets

• Direct Approaches for Market Research– Interviews– Probe and learn– Lead users research– Empathic design– Expert judgment– Trend analysis


Orienting Your Technology/Product in the Language of the Customer

• What are the key needs of your customers in light of this discussion?

• If you seek link to a business and not a final customer, what business drivers will make them decide for you?– Profit margin?– Product differentiation?– Increased customer base?– Penetration a new geographic region?– Other?

32


Example

• For a resume building service:

• Feature: “professionally designed templates”• Benefit: “eye-catching resume that stands

out among the competitors”• Customer-oriented benefit: “improved tool

to land your dream job quickly”

33

Adapted from Lean Canvas 2011


Exercise: Customer-Framed Benefits

Product Attribute Customer Need Customer –Oriented Benefit

34

Each Team should pick one of its model products and identify at least four attributes of your product, trace these to defined customer need and restate attribute to be a customer-framed benefit.


Discussion• How would you market your model product directly

to end users – those who drink coffee?• How would you market your model product to your

real customers - who sell coffee to end users? • Apply the principals below to increase your sales:

35


Implications and Discussion• What could you do to stimulate the recognition of

need in a potential stakeholder/customer? • How might you be of service in helping a potential

stakeholder/customer to define the type of product/service they might need, or to help them in defining their specifications?

• What actions could you take to make sure that you, or your organization, or your technology, comes to mind when the stakeholder/customer/ starts a search for qualified suppliers?

36


5’C’s (continued)• Competitors

– Who makes a close substitute for your product? – Who are the competitors we must consider?– Comparative value propositions?– What are their likely actions and reactions?

37

©2012 IC2 Institute at the University of Texas at Austin©Kate Mackie, Ph.D. – IC2 Institute – July, 2011

38

• Brand competition - Similar products/services for same customers at similar prices (e.g., for Palm Pilot, competition is other personal digital assistants)

• Functional competition - Products/services that fill the same need or serve the same function; substitutes (e.g., electronic calendars, day-timers, paper calendars)

–Sugar producers - high fructose corn syrup–Security guards – electronic alarm systems

Competition…but we don’t have ANY competition…Really???


Competitive Advantage

• Cost Advantage• Differentiation Advantage• Marketing Advantage

Best, 2000, Ch. 11

39




• Cost Advantage– Unit Cost– Transaction Cost– Marketing Expenses– Overhead Expenses

40


Best, 2000, Ch. 11



• Differentiation Advantage– Product Quality– Service Quality– Brand Image– Relative Price

41


Best, 2000, Ch. 11



• Marketing Advantage– Market Share– Brand Awareness– Distribution– Sales Coverage

42


Best, 2000, Ch. 11


Discussion

• Review your model product and two others near you.

• What are your competitive advantages? – List two

• What are your disadvantages?– List two

43


Exercise: CompetitionAttribute Your Product

(-3 to +3 with 0=average importance)

Competitor(-3 to +3 with 0=average importance)

44

Each Team should use the same six attributes already identified earlier, and rate the fit of your product and your chief competitors based on how well each meets customer needs.


Marketing Framework

Proceed to Strategic Marketing Planning with STP


Time

Introduction

Growth

Maturity Decline

The Product Life Cycle

46


Time

Introduction

Growth

TechnologyDevelopment

ProductDevelopment

Early Stage Steps…

47


Critical Focus – V2

• Value– Define your differentiation– Find the initial Target– Get your message to them

• Velocity– Reach them quickly– Provide the right product, at the right price, through the right

channel

• Remember – the most expensive thing you do as a young company is exist! Monthly bills with low revenue are killer.

48


Segmentation

• Concept– Customers differ in the benefit they expect to

receive from a product/service– While not all customers are heterogeneous, there

are often CLUSTERS of customers that are– What characteristics relate to common need,

receptivity to your product/service and ability to purchase?

– Segmentation = cluster of (nearly) similar customers


Segmentation

• Goal: Identify factors that separate CLUSTERS – Geographic – country, urban/rural, region, etc.– Demographic – age, sex, income, education,

industry, size of organization– Psychographic – personality traits, perceptual style,

attitudes, reference group, social role– Product Benefits/Usage – needs, frequency of use,

loyalty, performance requirements– Decision Process – shopping patterns, info search,

media habits, price sensitivity


• Challenges of culture, language, distance and experience

• Marketers must consider buyers’ attitudes and cultural patterns.

• Local industries, economic conditions, geographic characteristics, and legal restrictions must also be considered.

• Remanufacturing, or restoring worn-out products to like-new condition, can be an important strategy in places that cannot afford new products.

• Foreign governments are also an important market.

Challenges to International Marketing


Segmentation/Targeting

• Exercise Worksheet

52


Targeting

• Targeting– Attracting some of those customers makes better sense

than going after others– Who would buy your product first?– Where are they? – How can you reach them – at what cost?– Choose the segment to focus your initial efforts


Targeting Exercise

• Target customer for your product:_________________________________

• Where do you find these customers?_________________________________

• How will they buy/gain use of your product?_________________________________

• How will you reach them – where, when and how?_________________________________

54


An Exercise in Specificity

• Goal: Revise your technology description and market focus to have the specificity required by your “Target.”

• Team meeting: 10-15 minutes to propose segmentation of your available market

• Revise your technology description based on this segmentation and targeting.

• List the individuals you need to interview to put your targeting to the test.

55


Marketing Framework

• Positioning– Characterization:

• Determine what features and benefits you offer that are of most relevance to your target

– Differentiation:• Identify what you can provide to your target better or differently

than your competition– Positioning:

• Design the product offering to occupy a meaningful and competitively distinct position in the mind of your target

• Communicate these key benefits clearly to your intended customers


Exercise: Develop Your Positioning Statement

For target market , COMPANY/PRODUCT is,

among competitive set ,

single most important claim ,

because single most important support

is important to target group .



Example: Initial Statement• The technology which is the subject of this report is a coprocessed cellulosic II material with applications in

the pharma, cosmetics and food markets. Colombia and other Latin American countries acquire most of the raw materials needed in these segments from offshore countries including China and India. This implies frequent use of raw materials of questionable quality and inconsistency between batches. Therefore, it is very common that not all batches from the same supplier meets the microbial, physicochemical and impurity tests. This is reflected in a constant reevaluation of suppliers, importation hurdles and excessive costs due to the unnecessary inventory, constant supplier assessment and unnecessary testing. The polymorphic and physical modification at the particle level through coprocessing creates a granule with better flow, binding, disintegration and surface properties. This is translated in a new high quality, reproducible, multifunctional material which makes the pharmaceutical and cosmetic development easier and faster. This material is an innovative multifunctional excipient obtained from natural sources that saves production time and costs up to a 50% reduction. This avoids the need for many ingredients in a formulation for cosmetic and pharma applications. Thus, for example, within pharma, it works as a diluent, binder, disintegrant, flow enhancer and requires low levels of lubricant. Likewise, due to the controllable microparticle size (< 5 µm), it exhibits a good spreadability and sensation on the skin serving as an adhesive and absorbent, giving a good color distribution and covering effect to cosmetic products. Furthermore, the high water sorption properties of this material (~15% w/v) makes it valuable as a suspending agent, especially for making lotions and vanishing creams in sunscreen applications. All the above properties are reflected in inventory savings, less importation hurdles, better material traceability, fewer ingredients and less unit operations.

58


Refined Positioning Statement

• We offer a single powder mixture made from plant-based sources of cellulose and proprietary coprocessing agents for users of cosmetic related powders who are dissatisfied with the number of ingredients, complex manufacturing process and risk of cross contamination in existing excipient powders. Our product is a powder excipient ingredient that provides a single source for filler, binder and sensory properties that reduces the number of ingredients, manufacturing complexity and possible cross contamination issues, unlike current powder ingredients such as Prosolv, talc and zinc oxide.

59


Positioning Statement

• Exercise Worksheet

60


Strategy

Market CompetitiveInitial = Segmentation + DifferentiationStrategy Targeting

61


Developing a Persuasive Proposal

62


Writing the Persuasive Proposal

1. Define your audience2. State your objective3. State your audience conscious need4. Describe why you meet this need5. Describe the plan6. Tell how it works7. Explain the results8. List next steps

63Source: Aubuchon, N. (1997)



Preparing a Persuasive Proposal• Step 1 – Define your AUDIENCE.

– Know the person, company or individual you are communicating with. What is their business, collaboration strategy, etc.

– Who is authorized to deploy the authority and resources in the requested decision?

– Think of the specific person, not a “group.”– Who influences this specific person and

how?

Source for slides in this section: Mackie, 2011. Aubuchon, N. (1997)


Preparing a Persuasive Proposal• Step 2 – State your own OBJECTIVE.

– What exactly do you want to accomplish with this proposal?

– Keep it simple, clear and focused on one thought.


Preparing a Persuasive Proposal

• Step 3 – State your audience’s NEEDS.– Economic needs

• Company/Organization Economic needs:– Lower costs, Higher return on investment– Improved productivity, Increased profits– Sales, Market share

– Personal needs (e.g., promotion, recognition)


Need or a Want?• Recognized needs

– Expressed– Not expressed (Hidden, e.g., confidential, personal)

• Latent needs– Not consciously aware – E.g., a few years ago, consumers could express a need for

cell phones. It was the widespread availability of cell phones that uncovered a latent need of wanting to stay in constant touch with others

• Desires/Wants– May or may not be based on needs– How motivating are these?

67


How to Determine Needs

• Collect information carefully• Ask questions• Listen carefully to the answers• Observe• Research• Read• Remember• Analyze



• Step 3 – Establish your audience’s NEEDS.– Economic needs

• Company/Organization Economic needs:– Lower costs, Higher return on investment– Improved productivity, Increased profits– Sales, Market share

• Personal Economic needs:– Salary, bonuses, wages

– Personal needs (e.g., promotion, recognition)


Preparing a Persuasive Proposal• Step 4 – State the PLAN – What exactly do you propose

that the audience do to satisfy his/her needs? (25 words or less)– Direct statement– What you want your audience to do

• Include a “transition sentence” to keep their attention• Example:

– “To satisfy the needs of your company, I propose that you choose our management contract. Let me show you how it would work.”

– “To help meet your objectives, I propose that you approve this new budget. Please let me summarize the details.”



• Step 5: HOW-IT-WORKS. Explain how your proposed PLAN works.– Brief summary of the key details of your proposal.

(and/or)– What you would be doing to implement the proposal.

(and/or)– What the audience would see when the proposed

solution is in place. (and/or)– The “who/what/where/when/how/costs” details that

your AUDIENCE would want to know



• Step 6 – Identify the RESULTS that the audience will see that will address the needs in Step 3 – in the same order– Show how acceptance of the proposal would

lead to benefits/results that are directly tied to the needs listed earlier.



• Step 7 – Specify the NEXT STEP.– Ask your audience to take the action proposed

in the PLAN.– Set a specific time.

• For example:– “Please sign this work request today so that we

can complete the installation by next Wednesday.”


Exercise

• Develop an outline for your Persuasive Proposal.

• 20 min• What was easy, what was difficult…

74


Persuasive Proposal OutlineAUDIENCE: Name the person(s) who can act on your proposal.

YOUR OBJECTIVE: State exactly what you want to accomplish as a result of this proposal (50 words or less).

NEED(s): List your audience’s needs, as you believe he/she understands them. (Do you have agreement on these needs?)1) 2) 3) PLAN: State what you propose that your audience do to satisfy his/her needs (25 words or less).

HOW-IT-WORKS: Outline how your PLAN will be carried out.

RESULTS: List what your audience will get in terms of benefits to satisfy his/her needs. (Couple the benefits with the NEEDS listed above.)1) 2) 3) NEXT STEP: Request the action you want your audience to take. (Remember: a specific action by a specific time.)

75



Review and Discussion

77


Conclusions• Marketing must take into account management

of internal and external ecosystems for success• Velocity to market must be your watch word• Voice of customer is paramount• Apply marketing techniques for defining your

target, segment and position• Speak persuasively using customer language for

specific requests

78


Contact

Gregory P. Pogue, Ph.D.IC2 InstituteThe University of Texas at Austin

[email protected](512) 560-3717 (cell)(512) 475-8961 (office)Skype ID: pogo5708www.ic2.utexas.edu

79

Date post:	25-Dec-2015
Category:	Documents
Upload:	barry-griffith
View:	215 times
Download:	2 times

©2012 IC 2 Institute at the University of Texas at Austin Marketing for Entrepreneurs A Practical...

Documents