Entrepreneurial Marketing

ENTREPRENEURIAL MARKETING

Garage Entrepreneurs Business Planning Blog Series

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Entrepreneurial Marketing

This is the Affected Campaign, started by a good friend of mine.

� Started in 2006 by Brady Thrasher

� Thrasher bootstrapped his business to get it off the ground

� With a small start-up budget, Thrasher has created

The Affected Campaign

� With a small start-up budget, Thrasher has created a movement that is getting some huge publicity

See the next slides for how he got the word out…

blog.garageentrepreneurs.com



“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

Marketing Defined


that satisfy individual and organizational objectives.”

-American Marketing Association

� Marketing is the link between you and your customers

� Achieved by creating, developing and maintaining profitable relationships between

WWhat is Marketing?

maintaining profitable relationships between customers and your company� All about creating some profit margin

� A marketers job is to understand, influence and serve people


� What problem does your company face – what are you trying to change?

� Ex. Drive more customers to store, increase profit from each customer

WThe Marketing Challenge

each customer

� Think about it now: What is YOUR marketing challenge?


� Dividing people into groups based on similar characteristics

� Allows marketers to influence behaviors

�Many ways to segment (age, income, education)

Market Segmentation

�Many ways to segment (age, income, education)

� Can be broad (male/female) or narrow (age)

� Focus on a group so that you can serve them better than competition – can’t be everything to everyone

� Once target is chosen, analyze needs/wants and purchase motivators AND 4 P’s (see next slide)


Product Place Promotion Price

• Physical good

• Service

• Features

• Benefits

• Quality Level

• Kinds and

locations of

stores

• Channel

• Market exposure

• Sales promotion

• Salespeople

• Advertising

• Publicity

• Flexibility

• Comparison to

competitors

• Changes over

product life

WThe 4 P’s

• Quality Level

• Accessories

• Installation

• Instructions

• Warranty

• Packaging

• Market exposure

• How to handle

transporting

and storing

• Service levels

product life

cycle

• Geographic

terms

• Discounts

• Allowances


What type of person buys this car?

What are the purchase motivators?

What type of person buys this car?

Now, what are the purchase motivators?

Customer Segment #1 (PORSCHE) Customer Segment #2 (VAN)

Characteristics

Fun, Rich

Young?

Older?

Upper/Middle Class

Product

Colors/Features Simple

WCustomer Segmentation

Colors/Features

Customization

Simple

Generic

Placement

Specialty dealers Many dealer outlets

Promotion

Upper-class events

Personal mail packages

Mass market (newspaper)

Magazine

Pricing

High Mid


“Quite often the preparers of marketing plans assume that the competition simply will do nothing to try and stop us from doing

precisely what we want to do.”

William Smith, Quaker Oats Company

WCompetitive Analysis

� Predict future competitive strategies

� Identify a competitive vulnerability that we can exploit

� Predict reaction to current strategies


Questions to Ask:

1. Who are our competitors? (Direct vs. Indirect)

� Indirect: Do same thing but in different ways (Crest/Listerine)

� Direct: Two companies doing exact same thing

WCompetitive Analysis

2. What are THEY currently doing well/poorly?

3. How can we compete with them?

4. How might they react to our decision(s)?


Who are our customers

and how do they buy?

Implementation and

actual performance?

Who are our

competitors?

WMarketing Framework

Why does the customer

choose one product or

service over another?

Can we make a profit

with this marketing mix?

How can we design our

Marketing Mix so that

customers choose our

product/service over

our competitors?

Product

Price

Promotion

Place


Marketing Math

� Variable Cost: A cost that varies with volume� For every one you sell, it costs more

� Fixed Cost: A cost that does not vary with volume� Rent expense

WMarketing Math

� Investment: A one time cost; accounted for through depreciation expense over the useful life of the asset

� Unit Contribution (UC): The amount of money a company keeps

� Selling Price (SP) – Variable Costs (VC) x # units

� Profit is what is left over after we pay our fixed costs� Profit = Contribution – Fixed Costs


Fixed Costs Variable Costs

$500 Marketing Plan $25 Delivery

$1000 Rent $50 Grocery Expense

$500 Salary (Target Profit)

How many units do you have to sell to cover your costs?

1. Find unit contribution. (UC = SP – VC)

UC = $150 – ($25 + $50)

Breakeven Example

UC = $150 – ($25 + $50)

= $75

2. Find total fixed costs.

= $500 + $1000 + $500

= $2000

3. BE (units) = FC (Including Target Profit) / UC

= $2000/$75

= 27 deliveries

Is this number reasonable and attainable? DON’T FORGET SENSITIVITY!


Skimming - High price/low volume; ST strategyGoal: Keep industry profits high, stay away from a price warGreat strategy when you are the first to market a certain product

Ex. Honda – Hybrid CarsWanted car, price did not matter; kept people fighting for them

WPricing Strategies

Market Penetration - Low price/high volume; LT StrategyGoal: Gain Market ShareUsed when competing firms want to discourage new competitors from entering the market

Ex. Rogers and Bell (Internet Market)Based on perceived value, not actual worth

Dynamic Pricing - Set prices in real time – changes with demandEx. Airline Industry, Coke attempted to do this!


• Wear company logo’s/buttons

• Sell at flea markets

• Advertise on movie theatre screens

• Sponsor local teams

• Send a newsletter

W

• Talk to people

• Mail a postcard

• Make a creative business card

• Classified ads

• Speeches, training

Marketing Ideas

• Send a newsletter

• Advertise on voicemail

• Ask “How did you hear about us?” from every customer

• Follow online discussion groups and mention your business

• Advertise in entertainment books/magazines

• Speeches, training

• Exchange services for advertising

• Events, contests, raffles

• Put advertising on your car (banner, magnet)

• Offer free samples

• Donate product to local auctions/raffles


� Determining the marketing challenge is the first step in a marketing plan

� Choosing a target market is critical in order to make your marketing plan tailored and effective

� It is essential to know as much as possible about the target

WKey Takeaways

� It is essential to know as much as possible about the target market – SEGMENT!

� A company must ALWAYS monitor the actions of the competition

� DO THE NUMBERS!


Entrepreneurial Marketing

Business

marketing mix

marketing definedmarketing

american marketing

w marketing challenge

marketing framework

costs variable costs

preparers of marketing

fixed costs profit