A Practical Approach to - PowerPoint Presentation

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A Practical Approach toMarketing of Innovations in Resource Constrained FirmsBy George Miaoulis, Jr. Ph.D.Fulbright Scholar - VUZF University, BulgariaProfessor of Management - Hiram College, USAPaul Gilson Ph.D.Assistant Professor of EntrepreneurshipEastern Connecticut State University, USARussell Jones B.S.StudentEastern Connecticut State University, USASlide2

A Practical Approach …“Common Sense”Slide3

Common Sense Is Often Lacking … Slide4

Common Sense Is Often Lacking … Slide5

The Typical Entrepreneurial Approach to Marketing Is …“Build it and they will come …”Slide6

Little Tolerance for Marketing PlanningSlide7

Integrated Communications Strategy - TeradyneWeb SiteNewslettersCollateral

Media Relations

Trade Shows

Advertising

Brand Infrastructure

Direct Mail

Videos

Sponsorships

Signage

Events

Conferences

Articles

Awards

Partnerships

Promotional

Items

White Papers

E-Mail Marketing

Contests

Press Releases

CD-ROM

Presentations

New Product

Launches

Database

Marketing

Annual Report

Recruiting Materials

Response to CrisesSlide8

Eight [8] Practical QuestionsCan Focus Marketing Planning For the Entrepreneurial Team …How Can We Focus Marketing Planning ?Slide9

I am not going to tell you anything you don’t already know …But, these are questions entrepreneurial teams typically don’t know to ask …Slide10

In The Resource Constrained Firm …Financially constrainedMarketing budgets usually do not exist, or are under fundedInnovative venture often lacks:Customer baseRecognized branding Sales forceBut most importantly, marketing expertise is often lackingSlide11

1. Who is the competition?Most entrepreneurial teams believe their innovation is so unique that there are no competitors! This is never true.Slide12

Before Smart Phones …Cell phones Cameras PDAs Email Fax Machines Beepers Pocket Calendars Land-line Telephones Telegraph, Post Office, etc.Slide13

Innovations Are …Qualitatively different solutions to existing problems. Consumer seek solutions to problems,thus, there are always competitors. Slide14

Understanding the competition and their marketing strategies is the key first step …Slide15

2. Focus on the MarketThe entrepreneurial team focuses on the product almost exclusively, and typically not the market.Yet, the marketplace is …changing, changing, changing constantly.Slide16

Current Marketplace Changes …Exploding Information - 2013 1 million iPhone apps 1.7 million books published 1 billion websites 2 billion websites  2015 Etc. http://www.worldometers.info/Slide17

Current Marketplace Changes … Technology  Exploding Social media  Exploding Convergence  Smart phones, iPads … Economic restructuring  Global Crisis

• Political

dynamics



Mideast ++++

• Etc.Slide18

Change is the Only ConstantThe entrepreneurial team can be so product focused they fail to see market changes during the development process.Slide19

3. Is the Innovation Incremental or Disruptive? An incremental market entry … adds to the existing product offerings, is typically better a product, and readily accepted as a competitor … a new ice cream favor or new Bluetooth device …Slide20

3. Is the Innovation Incremental or Disruptive? A disruptive market entry … is when the product creates a new category technology or design causes the existing products to become almost obsolete this is the true “new product innovation”Slide21

Incremental vs. DisruptiveIncremental and disruptive products require different strategies and entrepreneurial teams often don’t ask this question – and use incremental strategies for disruptive productsSlide22

4. Enhancers vs. DetractorsEnhancers are businesses that can benefit from the sales of your new product. Your product in some way complements them with: direct sales, image association / enhancement, identification of consumers, etc.Slide23

For Smartphones … Enhancers are … Phone service carriers Manufacturers of Cases Screen protectors Bluetooth accessories Insurance companies Etc.Slide24

4. Enhancers vs. DetractorsDetractors can often be thought of as substitutes for your product . Detractors feel threaten by your product launch in terms of lost sales, loss of image, loss of distribution, pricing, etc.Slide25

4. Enhancers vs. DetractorsIdentifying enhancers can “jump start” the marketing effort.Slide26

5. Market PositioningUnderstanding “commonly held perceptions” of competitive brands provides insights into identifying market opportunities and / or strong consumer preferences to overcome. Slide27

5. Market PositioningMost consumers see Nike: trendy athletic shoes, associated with famous sport figures, and status oriented, and expensive.$130 - $350Slide28

5. Market PositioningAs a old, fat runner, with big feet, I see Nike as: not sufficiently durable, too narrow, uncomfortable big fat feet, and overpriced I have no interest in white and red high top Michael Jordan’s for $350.Slide29

I Wear New Balance"We don't live by fashion. Then again, we don't die by it either." $149Slide30

Marketing positioning allows the innovator to understand “fit” in the market.Designed for big feetfor “old men”

Trendy, fashion, status

“youth market”Slide31

6. Retention PlanningRaising the need for a customer retention plan before the entrepreneurial team has its first customer question’s the marketer’s wisdomSlide32

Customer Retention PlanningMarketing is …Everything we do to retain our existing customers, and everything we do to get new ones.It takes 16 times less marketing effort to retain a customer than it takes to acquire a new customer.Customer retention is the key to long term success.Slide33

Customer Retention StrategiesWarranty – L.L. Bean – clothing / outdoor retailer Our products are guaranteed to give 100% satisfaction in every way. Return anything purchased from us at any time if it proves otherwise. We do not want you to have anything from L.L.Bean that is not completely satisfactory.Slide34

7. Innovation Acceptance CriteriaThese criteria assist in predicting the rate of adoption of innovations …Relative AdvantageComplexityCompatibility TrialabilityObservabilitySlide35

7. Innovation Acceptance CriteriaRelative Advantage – does the innovation have time, cost, convenience, technology, capacity, or other relative advantage?ComplexityCompatibility TrialabilityObservabilitySlide36

7. Innovation Acceptance CriteriaRelative Advantage – does the innovation have time, cost, convenience, technology, capacity, or other relative advantage?Complexity – the customers ability to understand how the innovation works and how to use it.Compatibility TrialabilityObservabilitySlide37

7. Innovation Acceptance CriteriaRelative Advantage – does the innovation have time, cost, convenience, technology, capacity, or other relative advantage?Complexity – the customers ability to understand how the innovation works and how to use it.Compatibility – how compatible is the innovation with customer usage behaviorsTrialabilityObservabilitySlide38

7. Innovation Acceptance CriteriaTrialability – can the innovation be tried or demonstrated on a limited basis?In the US Red Bull provided free samples at universities for 2 years !ObservabilitySlide39

7. Innovation Acceptance Criteria4. Trialability – can the innovation be tried or demonstrated on a limited basis?5. Observability – can the customer benefits be observed?

4.

Trialability

– can the innovation be tried or demonstrated on a limited basis?

5. Observability

– can the customer benefits be observed?Slide40

8. SegmentationProcess of identifying homogeneous groups of companies or people called ...Market SegmentsThe key issue is identifying and understanding the key “homogeneous” characteristicsSlide41

Entrepreneurial View of the Market(Marketing Myopia)All Companies orCustomersMarketSlide42

42Segmentation PerspectiveMarket Segments

1

4

2

5

3

Technology

Service

Small / specialty

segment

Overlapping

segments

switching /

dual users

Mass market

Concentrated

segmentSlide43

Some Common Segmentation Approaches Seasonality Usage rate Occasions of use Demographics Geography Brand preference Media usage Category Beliefs Benefits Shopping preferencesSlide44

I did not tell you anything you don’t already know … just some …“Common Sense”But, these are questions entrepreneurial teams typically don’t know to ask …Slide45

Thank you …