Entrepreneurial Marketing

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Entrepreneurial Marketing FinanceCourse
Website www.ieor.berkeley.edu/ieor190b/index.ht
m

• Stacey Lawson Ian Sobieski
• 225B Bechtel
• stacey_lawson_at_berkeley.edu
• ian_at_bandangels.com
• Office Hours
• M 230-330

GSI Wen-Yu Liao 1116 Etcheverry wenyul_at_ieor.berk
eley.edu Office Hours W230-330
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What is Entrepreneurship?

• Entrepreneurship is a management and leadership
  style that involves pursuing opportunities
  without regard to resources currently controlled
• Any attempt at new business or new venture
  creation, such as self-employment, a new business
  organization, or the expansion of an existing
  business, by and individual, a team, or an
  established business.
• A way of thinking and acting that is opportunity
  obsessed, holistic in approach and leadership
  balanced for the purpose of value creation.
• An entrepreneur is a highly creative person who
  marshals scarce resources to pursue opportunities
  that bring about large-scale change

References Harvard Business School and Babson
College, London School of Business
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Entrepreneurship takes many forms

• Entrepreneurship
• New venture
• Bootstrapped or externally financed
• Organize required resources to bring to bear

• Intrapreneurship
• New internal project, division, operating unit,
  joint venture, etc.
• Financial human resources identified from
  internal or external sources

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My Experience with Entrepreneurship

• Founder President of InPart
• Started and grew PLM software division of PTC to
  300M annual revenue
• Started new ERM division at Siebel Systems and
  grew to 100M annual revenue
• Acquired 4 companies during various roles
• Limited Partner in 5 venture capital funds
• Have been board member, advisor, or investor in
  20 early stage companies

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What is Marketing?

• Taking actions to create, grow, maintain or
  defend markets.
• Identifying the particular wants and needs of a
  target market of customers, and then going about
  satisfying those customers better than the
  competitors.
• Process by which a firm creates value for its
  chosen customers.
• A group of related business activities aimed at
  satisfying customer demand for goods and
  services.

References Peter Drucker, Geoffrey Moore, web
sources
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Entrepreneurial Marketing

• Relentlessly pursuing opportunities without
  regard to resources currently controlled.
• by
• identifying the particular needs of target
  customers, and then satisfying those customers
  better than the competition

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Biggest Issues VCs Identify

• Dont know how to segment market and position
  solution in a compelling way
• Dont understand patterns of adoption --
  pragmatists wont buy unless they have to!
• Major focus of Entrepreneurial Marketing
• Selecting target market and positioning product
  in customers minds
• Specifying the plan for marketing activities to
  achieve desired customer perception behavior

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Marketing is an Exchange Process
Company
Customer
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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

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Understanding the Customer
Company
Customer

• Firm/Manager owns Understanding
• The who, what, where, why, how of customer
  behavior
• How to translate these into offerings and
  marketing mix

• Customer owns Behavior
• Perception of fit between companys offerings
  and their own need
• Ability to act

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Model for Marketing Decision-Making5 Cs 4 Ps
Context
Competition Competitive Advantage
Collaborators Shared Interests
Company Core Competencies
Customer Unmet Needs
Target Market
Assess the Situation
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Model for Marketing Decision-Making5 Cs 4 Ps
Context

• What are our core competencies?
• Who has specific, relevant expertise?
• Who works in the venture? Advises? Invests?
• What is the value of the ventures offerings?
• Who can supply whole product expertise?

Competition Competitive Advantage
Collaborators Shared Interests
Company Core Competencies
Customer Unmet Needs
Target Market
Assess the Situation
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Model for Marketing Decision-Making5 Cs 4 Ps
Context

• Who are current potential competitors?
• What are their strengths weaknesses?
• What is our differentiation?
• How does the value of our offerings compare?

Competition Competitive Advantage
Collaborators Shared Interests
Company Core Competencies
Customer Unmet Needs
Target Market
Assess the Situation
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Model for Marketing Decision-Making5 Cs 4 Ps
Context
Competition Competitive Advantage
Collaborators Shared Interests

• What is the macro-economic environment
  (regulatory, legal, technological, cultural,
  etc.)?
• What changes are taking place in the industry?
• What will this market look like long-term?

Company Core Competencies
Customer Unmet Needs
Target Market
Assess the Situation
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Model for Marketing Decision-Making5 Cs 4 Ps
Context

• Who are the most important partners?
• How should we motivate them?
• Who has relationships with our buyer?
• What should our channel look like?
• Who is best cultural fit?

Competition Competitive Advantage
Collaborators Shared Interests
Company Core Competencies
Customer Unmet Needs
Target Market
Assess the Situation
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Model for Marketing Decision-Making5 Cs 4 Ps
Context

• What are the customers attributes?
• What is the customers need/pain?
• What is the customer buying process?
• Who is involved in the process?
• What do they require in a whole product?
• Where do they wish to buy?

Competition Competitive Advantage
Collaborators Shared Interests
Company Core Competencies
Customer Unmet Needs
Target Market
Assess the Situation
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Model for Marketing Decision-Making5 Cs 4 Ps
Assess the Situation (5 Cs)
Select TargetMarket
Target Market

• Customer Segmentation
• Competitive Differentiation
• Company Product Positioning

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Model for Marketing Decision-Making5 Cs 4 Ps
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
DefineMarketingMix (4Ps)
Product
Place
Price
Promotion
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Model for Marketing Decision-Making5 Cs 4 Ps
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
Define MarketingMix (4Ps)
Product
Place

• Total package of benefits obtained by the
  customer
• Whole Product

Price
Promotion
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Model for Marketing Decision-Making5 Cs 4 Ps
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
Product
Place
Define MarketingMix (4Ps)

• Perceived value represents maximum price
  customer is willing to pay

Price
Promotion
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Model for Marketing Decision-Making5 Cs 4 Ps
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
Product
Place
Define MarketingMix (4Ps)

• Communication with customers to build
  awareness, knowledge, interest, trial, and
  repeat purchase

Price
Promotion
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Model for Marketing Decision-Making5 Cs 4 Ps
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
Product
Place
Define MarketingMix (4Ps)

• Channel structure and go-to-market approach

Price
Promotion
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Model for Marketing Decision-Making5 Cs 4 Ps
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
DefineMarketingMix (4Ps)
Product
Place
Price
Promotion
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Product Adoption Lifecycle
Conservatives
Pragmatists Stick with the herd
Move only when necessary
Visionaries
Move ahead of the herd
Skeptics
No way
Techies Try it
The Chasm
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Managing It Over Time
Change (Good and Bad news)
Assess the Situation (5 Cs)
Target Market
Select TargetMarket
Product
Place
Define MarketingMix (4 Ps)
Price
Promotion
ExperimentsIterationLearning
Anticipation
Response
Lawson adapted from Lassiter Sahlman
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Scope of Marketing Course
Marketing Modules
Module 1 Market Definition, Customer Segmentation Competition (5Cs, TARGET MARKET)
Module 2 Product Development, Positioning Pricing (PRODUCT, PRICE)
Module 3 Marketing Communications (PROMOTION)
Module 4 Distribution Sales Channel Development (PLACE)
Conclusion Putting it All Together
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Why Use Case Method?

• "We cannot teach people anything we can only
  help them discover it within themselves."
• Galileo Galilei (1564-1642) great Italian
  astronomer, mathematician, physicist

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Why Use Case Method?

• Some concepts are best shown through example
• Context matters -- what works in one situation
  might not work in another
• You get to be the manager in 20 companies this
  semester
• Feel the nuance and complexity of the situation,
  but boil down to key issue(s)
• Over time, will help with pattern recognition

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Case Preparation

• Assignment questions on syllabus/website
• Opening study question is often, what should the
  protagonist do?
• Put yourself in the shoes of the protagonist
• Prepare until you have an action plan
• .and be willing to bet your career on it
• More learning comes from being wrong, than being
  right
• Note See Guide to Cracking Cases

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Class Preparation Expectations

• Minimum of 2 hrs. preparation for each class
• Typically assigned a Case Note/Reading for each
  session
• Focus on Cases
• Use whatever time left over to read Notes
• Notes will provide structures/frameworks to guide
  our class discussion

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Case Preparation Tactics/Steps

• Skim the reading/note quickly for new concepts
• Skim the case quickly
• Re-read the case carefully
• Decide what the issues are (case questions)
• Decide what analysis will inform the issues
• Complete analysis
• Choose a course of action/plan
• Test the plan
• Re-read the reading/note if have time

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End of Class Sessions

• Unlike much of your engineering curriculum, there
  will not always be a right answer
• Business is messy, dont expect a tidy solution
• Let the lessons settle in over time
• Will share outcomes where possible guest
  speakers can offer insights

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Grading

• 40 -- Class Participation and Assignments
• 20 -- Midterm Group Project Presentation
• 20 -- Final Group Project Presentation
• 20 -- Final Exam

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How will participation be evaluated?

• 40 of grade based on class attendance
  participation
• Your participation in critical to the process
  requires good preparation
• QUALITY Quantity
• Provide your viewpoint with supporting facts or
  analysis to back it up
• Very few right answers
• LISTEN to your fellow classmates -- take the
  discussion forward, not backward

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Group Assignments Projects

• Groups of 5
• Pick your own groups
• Pick a concept for a new venture that you believe
  could be a viable company
• OK to use a concept youve already been exploring
• Well take the marketing/sales and finance
  portions of plan to the next level

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Assignments Group Projects
Deliverables Date
1 Submit Resume 1/23
2 Concept for New Venture 2/1
3 Product, Positioning Pricing Plan 2/15
4 Communications Plan 2/27
5 Integrated Marketing Plan (incl. Sales Distribution Plan) 3/8
Marketing Presentations 3/8 3/13
6 PL, Capitalization Table 4/17
7 Balance Sheet 4/24
8 Integrated Financial Plan 5/1
Funding Presentations 5/1 5/3
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Preparation for Monday

• Reading for today Note on Marketing Strategy
• Prep for Monday
• Case Microfridge
• Reading Market Segmentation, Target Market
  Selection and Product Positioning
• Assignment 1 Due Submit Resume
• Create a name card and bring to every class
• Class starts at 410 late-comers not admitted
• Accessing HBS Case Materials http//www.hbsp.com
  /relay.jhtml?namecpcc93260

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Entrepreneurial Marketer of the Week

• "I never perfected an invention that I did not
  think about in terms of the service it might give
  others... I find out what the world needs, then I
  proceed to invent."
• - Thomas Edison