Professional & Enterprise

Development
CT024-3-1

Entrepreneurship
Creativity and the Business Idea
Level 1

Prepared by: RHR First Prepared on: September 10, 2006 Last Modified on:
Quality checked by: MOH
Copyright 2004 Asia Pacific Institute of Information Technology
 Structure of the Lesson

Explore entrepreneurs
opportunity for growth with
creativity

CT024 PDT Introduction

 Learning Outcomes
1. To review the importance of marketing
research for new ventures
2. To present factors that inhibit the use of
marketing
3. To examine the marketing concept:
philosophy, segmentation, and consumer
orientation
4. To establish the areas vital to marketing
planning & highlight the questions concerning
hazards in marketing
CT024 PDT Introduction
 Key Terms You Must Be Able to
Use
If you have mastered this topic, you
should be able to use the following
terms correctly in your assignments and
exams:
Market research
Marketing planning
Consumer behavior
Pricing strategy
Sales research
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 Marketing Definition

Ensure the companys survival

Functions of Marketing
Build up customer trust
Create customer preferences
Create sustainable competitive
advantages
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 Defining the Research Purpose
and Objectives
Gathering Primary Data
Information that is gathered specifically for
the research at hand.
Surveys & Experimentation
Gathering Secondary Data
Information that has already been compiled.
Advantage: Less expensive and available
Disadvantages: outdated, lacks specificity,
questionable validity
Sources: internal and/or external sources
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 Significance of Research

All progress is born of inquiry.

Doubt is often better than
overconfidence, for it leads to
inquiry and inquiry leads to
invention

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 Developing an Information-
Gathering Instrument
Ensure each question pertains to the
objective of the study e.g. building a
bridge
Place simple questions first and difficult
questions later in the questionnaire.
Ask: How could this question be
misinterpreted? Reword questions to
eliminate misinterpretation
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 Developing an Information-
Gathering Instrument
Avoid leading & biased questions
Give concise but not complete
directions in the questionnaire.
Use scaled questions rather than
yes/no questions to measure
intensity of an attitude/frequency
of the experience.
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CT024 PDT Introduction
 Interpreting and Reporting
Information
Data organized & interpreted is
information
Tables, charts, graphs
Descriptive statistics: mean, mode, median
Market research subject areas
Sales
Distribution
Markets
Advertising and
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 Inhibitors to Market Research and
Reporting
Mistaken beliefs that inhibit marketing research:
Cost: research is too expensive
Complexity: research techniques rely on overly
complex sampling, surveying, and statistical analysis
(Hypothesis).
Strategic Decisions: only major strategic decisions
need to be supported through marketing research.
Irrelevancy: research data will contain either
information that merely supports what is already
known or irrelevant information.
912
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Developing the Marketing Concept
Marketing Philosophies
Production-driven philosophy - good quality products
Sales-driven philosophy - increase sales by sourcing for
new customers or markets

Consumer-driven philosophy - driven by consumer needs

Factors in Choosing a Marketing Philosophy
Competitive pressure - competition by competitors
Entrepreneurs background (brand/image) - the
emphasis arises from a number of factors i.e. brand image, proprietary
technology, innovative products, special features and superior service
Short-term focus (current needs) - product caters to the
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Developing the Marketing Concept
(contd)
Market Segmentation
- The process of identifying a specific set of
characteristics that differentiate one group of
consumers from the rest.
1. Demographic variables
Age/marital status/sex/occupation/income/location
2. Benefit variables
Convenience, cost, style, trends (depending on the
nature of the particular new venture)
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 Consumer Behavior

Consumer Behavior (Consumer Psychology)

The types and patterns of consumer characteristics.
Personal characteristics
Psychological characteristics (human nature)
Five Major Consumer Classifications:
1. Convenience goods grocery store
2. Shopping goods quality, cost
3. Specialty goods extraordinary eg designer items
4. Unsought goods adversity eg insurance
5. New products smart phones
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 Consumer Characteristics

Source: Roy A. Lindberg and Theodore Cohn, The Marketing Book for
Growing Companies That Want to Excel (New York: Van Nostrand
Reinhold, 1986), 8081. Reprinted with permission.

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 Consumer Characteristics (contd)

Source: Roy A. Lindberg and Theodore Cohn, The Marketing Book for
Growing Companies That Want to Excel (New York: Van Nostrand
Reinhold, 1986), 8081. Reprinted with permission.

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 Changing Priorities & Purchases in the Family Life Cycle

Source: Peter R. Dickson, Marketing Management (Fort Worth, TX: The Dryden Press,
1994), 91. Reprinted with permission of South-Western, a division of Thomson Learning:
http://www.thomsonrights.com.
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 Table 9.5 The Evolution of the Marketing Function

Source: Reprinted by permission of the Harvard Business

Review (exhibit 1) from Growing Ventures Can Anticipate
Marketing Stages, by Tyzoon T. Tyebjee, Albert V. Bruno, and
Shelby H. McIntyre, (January/February 1983), 64. Copyright
1983 by the Harvard Business School Publishing Corporation;
all rights reserved.

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 The Evolution of the Marketing
Function
Entrepreneurial marketing - is not a single marketing strategy
but a marketing spirit that differentiates itself from traditional
marketing practices by employing innovativeness, creativity

Opportunistic Marketing - attempts to increase sales through

new market penetration.

Responsive Marketing shifts attention to consumers response

in a marketing strategy that attempts to reach a high consumer
satisfaction rate.

Diversified Marketing - is a organizational strategy to increase

sales volume from new products/services and new markets
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 Marketing Planning
Marketing Planning
The process of determining a clear,
comprehensive approach to the creation of
customers
Elements of Market Planning
Marketing research
Sales research
Marketing information system
Sales forecasting
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Marketing plans and Evaluation
Introduction
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 Marketing Planning (contd)
Marketing Research
To identify customers, target markets and to fulfill
their desires
Areas of Market Research
The companys major strengths and weaknesses
Market profile
Current and best customers
Potential customers
Competition
Outside factors
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Legal changes Introduction
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 Sales Research Questions
Do salespeople call on their most qualified prospects on
a proper priority and time-allocation basis?
Does the sales force contact decision makers?
Are territories aligned according to sales potential and
salespeoples abilities?
Are sales calls coordinated with other selling efforts, such as trade
publication advertising, trade shows, and direct mail?
Do salespeople ask the right questions on sales calls?
Do sales reports contain appropriate information?
Does the sales force understand potential customers needs?
How does the growth/decline of a customers/business affect the
companys own sales?
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 Marketing Information System

Marketing Information System

Compiles and organizes data relating to cost,
revenue, and profit from the customer base for
monitoring the strategies, decisions, and programs
concerned with marketing.
Factors affecting the value of a system:
Data reliability
Data usefulness or understandability
Reporting system timeliness
Data relevancy
System cost
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 Telemarketing
Advantages: Pitfalls:
Receptiveness Poor telephone
Impressions techniques that defeat
More presentations the telemarketing
Unlimited geographic strategy.
coverage Dissension between
Better time management the field sales staff
Immediate feedback and the telephone
Better control sales personnel
Less piracy Rapid turnover of
Lower salary and telephone staff.
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commissions Introduction
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 Internet Marketing

The Internet:
Allows the firm to increase its presence and brand
equity in the marketplace.
Allows the company to cultivate new customers.
Allows Web site visitors to match their needs with
the offerings of the company.
Can improve customer service by allowing
customers to serve themselves.
The greatest potential for the future is in direct
marketing, where catalogs can be offered
online.
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 Table 9.6 Web Design Tips

Source: John H. Lindgren, Jr., Marketing on the Internet Marketing Best

Practices (Fort Worth, TX: Harcourt College Publishers, 2000), 559

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 Pricing Strategies
Factors affecting the pricing decision:
The degree of competitive pressure
The availability of sufficient supply
Seasonal or cyclical changes in demand
Distribution costs
The products life-cycle stage
Changes in production costs
Prevailing economic conditions
Customer services provided by the seller
The amount of promotion
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The markets buying power
Introduction
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 Pricing Strategies (contd)

Psychological factors affecting the pricing decision:

The quality of a product is interpreted by customers
according to the level of the items price.
Customer groups shy away from purchasing a product
where no printed price schedule is available.
Emphasis on the monthly cost of purchasing an expensive
item results in greater sales than an emphasis on total
selling price.
Buyers expect to pay even-numbered prices for prestigious
items and odd-numbered prices for commonly available
goods.
The greater the number of customer benefits the seller can
convey about a product, the less will be the price resistance.
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 Pricing Strategies:
Pricing for the Product Life Cycle
Life-Cycle Stage Pricing Strategy
Introductory Skimming: deliberately setting a high price
Unique product to maximize short-term profits
Nonunique product Penetration: setting prices at such a low
level that products are sold at a loss
Growth Consumer Pricing: combining penetration &
competitive pricing to gain market share;
depends on consumers perceived value of
the product
Maturity Demand-Oriented Pricing: a flexible strategy that bases
pricing decisions on the demand level for the product
Loss Leader Pricing: pricing the product below cost in
Decline an attempt to attract customers to other products
Source: Adapted from Colleen Green, Strategic Pricing, Small Business Reports (August 1989): 2733.
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 Question and Answer Session

Q&A

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 Next Session

Topic and Structure of next session

Corporate Entrepreneurship

CT024 PDT Introduction