EBE Part 3

•  99% of all companies are small and medium sized-­‐ 21million SMEs

•  SMEs defined by EU based on combinations of head-­‐count, balance total and revenues

•  90% of Europe’s SMEs are micro businesses, less than 10 people working there

•  marketing definition-­‐ the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value

for customers, clients, partners and society at large

•  strategic side of marketing involves the organizational issues and element of value towards stakeholders

product, price, place, promotion

•  Anything from a physical product to a service, experience, event, person, place, etc. that can be offered to a market to fulfill a need

•  Different levels to a product: the level of the basic product is what it is, it involves the 4 p’s of marketing

• •  
• the next three levels have to do with the expectations a customer has concerning a product (do i get a refill with my coffee? how hot is it? etc.)

• •  The 5 levels
• of a product: Potential product, augmented product, expected product, basic product, core benefit

•  one of the most difficult elements of marketing

•  a lot of business owners usually follow the market and underprice just to attract  customers

•  Skimming or creaming: setting high prices when entering the market to regain some of initial investments, then later prices are lowered

•  Penetration pricing: setting low prices when entering market in order to get market share, later increase in prices

•  Price discrimination: offering the same products at different prices based on non-­‐transferable customer characteristics

•  Price differentiation: offering the same product at different prices based on non-­‐transferable time or geographic criteria

•  Put-­out or predatory pricing: setting prices so low that competition can’t make a profit, after competition leaves prices are increased

•  Stay-­out pricing: setting prices so low that the market isn’t profitable enough for competition to enter

•  Razor-­blade pricing: offering a product at a low price and selling the complementary product at a premium price

1­. the side of where the company is placed in the supply chain

•  a product or service can be delivered to either the final consumer or to other companies that use the product or service as a part of their own final product

2. How many locations should a company occupy?

•  Intensive distribution involves having offices/stores in as many places as possible

•  Exclusive distribution is the opposite, having one or a few locations where the product is offered

•  can be interpreted as either communicating about a product or service or encouraging the acceptance of a product or service

•  promoting must be well understood-­‐ no room for the message to me misinterpreted by the customer

•  can be interpreted as either communicating about a product or service or encouraging the acceptance of a product or service

•  promoting must be well understood-­‐ no room for the message to me misinterpreted by the custome

• Types of advertising
• •  Personal selling: promoting a product or service to a customer by oral presentation

•  Direct marketing: promoting a product or service using personalized media. message is often addressed directly to a consumer

•  Sales promotion: promoting a product or service for a pre-­‐determined, limited time

•  Exhibitions: promoting a product or service at a trade show, often industry specific

•  Advertising: promoting a product or service using non-­‐personal media

•  Public relations: maintaining the relationship with stakeholders

a function, institution or process in order to create, deliver and exchange value both to customers and stakeholders

•  Research has shown that marketing within SMEs is likely to be haphazard, informal, loose, unstructured, etc.

•  SMEs need to focus on their bottom-­‐line to see if they are offering value to their customers, all efforts effecting the profit can be seen as marketing

•  New definition: “Entrepreneurial marketing is selling more products or services, to more customers, more often, for more money, and at the same time being more efficient in order to create more profit”

•  The Shift-­‐ From Monolinear Information to Polyrhythmic Interactions

• •  today’s increased risk cause a need for change in business structures and management
•  principles

• •  the market is changing, distribution channels
• are being reshaped, and much more

•  arguments over how marketing should be reconceptualized, and extending theoretical frameworks is no longer sufficient to reflect marketplace shifts or guide marketing practice in the new context of this century

•  1. customization, one-­‐to-­‐one approaches, and personal relationships in a more personalized approach

•  2. networking, strategic alliances, integration, and technology in an increasingly global effort

Marketers attempt to blend product, price, promotion, and distribution decisions into an integrated mix that meets the needs of target customers better than competitive  offerings

• •  New market approaches have appeared
• in recent years

• •  Some examples are:
• -expeditionary marketing,
• -guerrilla marketing,
• -radical marketing,
• -convergence marketing,
• -buzz marketing, and
• -viral marketing

• •  All have one thing in common: efficiency in marketing expenditures by leveraging resources, creative and alternative approaches to managing marketing variables, ongoing product and process innovation, customer intensity, and an emphasis on changing the rules of the competitive
• game

• •  A new paradigm suggested
• marketing must replace a focus on short term exchange with an emphasis on acquiring and retaining customers and building customer equity in the long run

•  These emphasized the importance of intra and interorganizational partnerships to acquire and retain desired customers as a part of a market orientation

•  In 2004 marketing was redefined as “an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders”

•  A lot of skeptics refer to the 4 p’s as prescriptive, polemical, permanent, and problematical

• •  New marketing logic requires a fundamental rethinking of the old rules that applied in a world of stability
• and hierarchical control

•  Marketers need to accept that the customer is in control, and drives decisions, not the product and not the marketer

•  From product to co-­‐created solutions/experiences

•  From promotion to communication within communities

•  From price to customizable personal value

•  From place to choice and convenience

•  Definition-­‐ the process of creating value by bringing together a unique package of resources to exploit an opportunity

•  Results in the strategic renewal of existing firms

•  Entrepreneurship is the principal agent of change operating from within any economic system

•  Entrepreneurship. has been viewed as an organizational orientation exhibiting three underlying dimensions: innovativeness, calculated risk-­‐taking, and proactivity

• •  The more successful firms over time are the ones that engage in higher levels of entrepreneurial
•  activity

• •  
• marketing that must rely on creative and often unsophisticated marketing tactics that make heavy use of personal networks

• •  EM is proposed as: an integrative
• construct for conceptualizing marketing in an era
• of change, complexity, chaos, contradiction, and diminishing resources, and will manifest itself differently as time goes on

•  Innovation represents the core marketing responsibility and the key means to sustainable competitive advantage


•  This type of marketing is needed when facing contexts that are more fragmented, dynamic, or hostile, as well as in emerging markets

•  It’s a central concept that integrates the two disciplines of marketing and entrepreneurship

• - Proactiveness
• - Opportunity obsessed,
• - Customer intimacy
• - Innovativeness

• Proactiveness
• redefining external conditions in ways that reduce uncertainty and lessen the firm’s dependency and vulnerability

• marketing variables are used as a means of both creating change and adapting to
• change

• Obsession with Opportunity
• opportunities represent unnoticed
• market openings that are sources of sustainable profit potential
• exploitation of opportunity entails learning and ongoing adaptation by marketers before, during, and after the actual implementation of an innovative concept
• marketer constantly striving to expand the opportunity horizon

• Customer  Intimacy
• a philosophy of customer intimacy produces a dynamic knowledge base of changing customer circumstances and requirements

innovative approach to creating new relationships or using existing relationships to create new markets

emotional connections help successful markets

• involves serendipity, intuition, flair,
• and insight instead of the rational decision making that underlies
• mainstream marketing theory

• Innovativeness
• maintain a flow of internally and externally motivated new ideas that are translatable into new products, services, processes, technology applications,

• and/or markets
• A marketer’s role ranges from opportunity identification and concept generation to technical support and creative augmentation of the firm’s resource base to support innovation

Overt efforts to identify risk factors and then mitigate or share these risks

• Firm’s flexibility must be high to take risks
•   
• Marketer tries to redefine elements of the external environment in ways that reduce environmental uncertainty, essen the firm’s dependency and

Vulnerability, and/or modify the task environment in which the firm operates

• Leveraging at its most basic level means doing more with less

• •  EMs develop a creative
• capacity for resource leveraging

• Needing to recognized a resource not being used optimally, and seeing how it could be used in a nonconventional way

• Ability to use other people’s resources to accomplish the marketer’s purpose

• Innovative value creation, based on the assumption that value creation is a prerequisite for transactions and relationships

•  Marketer needs to discover untapped sources of customer value and creation unique combinations of resource to produce value

•  Increased innovation decreases a firm’s risk profile

•  EM is a matter of degree, and various combinations of the underlying dimensions will result in marketing that is more, or less, entrepreneurial

• •  The different underlying components
• of entrepreneurial marketing will receive more emphasis either in degree or amount and will take different forms depending on the stage of organizational development

•  the nexus of the interface between entrepreneurship and marketing is value creation and value appropriation within the market

•  the market represents a control system that determines the success or failure of entrepreneurs and marketers

•  being market-­‐driven is adapting to markets as they change

•this approach involves learning, understanding, and responding to stakeholder perceptions and behaviors within a given market structure

• •  market driving-­‐ firms that shape the structure, preferences, and behaviors of all market
•  stakeholders

• •  this type of firm creates entirely
• new markets, produces discontinuous leaps in customer value, designs unique business systems, raises service to unprecedented levels and fundamentally changes the rules of the competitive game

• •  market-­‐driven companies are excellent in generating incremental innovation, and market-­‐drivers produce radical innovations in products, business models, or value creation
•  networks

•  Being market driven is adapting to markets as they change

•  This approach involves learning, understanding, and responding to stakeholder perceptions and behaviors within a given market structure

• •  Market driving: firms that shape the structure, preferences, and behaviors of all market
•  stakeholders

• •  This type of firm creates entirely
• new markets, produces discontinuous leaps in customer value, designs unique business systems, raises service to unprecedented levels and fundamentally changes the rules of the competitive game

• •  Market-­driven companies are excellent in generating incremental innovation, and market-­‐drivers produce radical innovations in products, business models, or value creation
•  networks

•  Value generated and made available to venture’s stakeholders: change in the way things are done, change in organizations and change in relationships

• • Vision exists in tension between what is and what  might
• be.

• • Vision specifies a destination rather
• than route to get there.

• Vision defines where entrepreneur wants to go, shed light on why they want to be there and provides signposts for how they might get there.

• Vision is constructed personally, a communication with oneself.

• Vision(picture of the new world)-> How value will be created, who will be involved, why they will be better off ->Information ->Vision

•  Must understand why their vision offers picture of a more valuable world and how it will reward them and stakeholders.

•  Questioning must be a continual process.

Communication not just about relating information but eliciting action from receiver

•      ‘I have a dream…” :explicit about their vision and presented as coherent whole.

Entrepreneurs expect other people to find it attractive.

• •  Talking specific goals: break down vision into specific goals.
•  Choice of what is communicated based on whom vision is being communicated, when, and what situation and with what intention.

•  Talking strategy: the approach that the business will take to achieving its goals and tasks that must be undertaken to create new world.

• Story-­‐telling: stage on which venture is played out.  Personal stories(founding stories and vision stories), Generic stories(marketing and strategy stories), Situational stories(historical and conventional stories)

•  Why things can be better: push people forward using their sense of d issatisfaction. Too much emphasis runs risk of sounding negative though.

•  What’s in it for you: focuses on particular benefits gained by recipient of communication.

•  Be able to project into the future the effects and consequences of a particular action and  think about it in strategic terms:

•  Consequent assessment: assessing implications of present actions, decisions

•  Early warning and guidance: detecting and avoiding problems before they occur

•  Proactive strategy formulation: considering present implications of possible future events

• •  Normative scenarios: envisioning aspects of desired
• futures.

•  Mission defines nature of venture, what it aims to achieve and how it aims to achieve it.

• Missions:
• •  Articulates the entrepreneur’s vision

•  Encourages analysis of the venture

•  Defines the scope for the business

•  Provides a guide for setting objectives

•  Clarifies strategic options

•  Facilitates communication about the venture to potential investors

•  Draws together disparate internal stakeholder groups

•  Provides a constant point of reference during periods of change

• Acts as an aide-­‐memoire for customers and suppliers

• Should encapsulate useful information a be properly developed and articulated.

•   Strategic and philosophical components: describe both what business aims to achieve and values it will uphold.

• •  Product/service scope: specifies
• exactly what the firm will offer to the world. It stipulates the type or range of products or services that the firm will engage in producing and delivering.

•  Customer groups’ served: stipulates which customers and distinct customer groups the firm will address.

•  Specified with 3 things in mind: Total market in which business operates, markets that business currently serves, market sectors, or niches, that business aspires to serve.

•  Other elements in mission statement

o  Benefits offered and customer needs served

o  The innovation on which the business is based and the sources of sustainable  competitive  advantage.

o   The aspirations of the business

Mission must be developed alongside a strategic audit for the business

•  Development through consensus: getting the whole of organization to contribute towards development of mission

•  Development by imposition: Develop the mission themselves or with a small group and impose it on organization as a whole. Used if entrepreneur may be only person with sufficient knowledge of the business

Must emphasise what is distinct about the venture; must be informative; it must be clear and unambiguous; it must have impact; and it must be memorable

• The products to be offered: the markets to be targeted and the approach taken to competing

•  Product range: type and rang of products that the firm supplies to its markets

•  Market scope: the customer groups and market segments addressed by the firm

•   Competitive approach: the way in which the firm competes within its product-­‐ market domain to sustain its business in the face of competitive pressures

• • Deliberate approach: define a strategic
• policy in which the future goals and competitive approach are clearly defined and translated into specific objectives

•  Emergent approach: future goals and strategic approach are left more ambiguous

• Relationship between existing strategy content, the strategy content desired by the business for the future and the strategy content that is actually achieved.

• Decisions in relation to developing and controlling the strategy process:

•  Development of the mission

•  Development of strategy

•  Control of resources

• The way objectives will be set, monitored and rewarded

A  strategy:

• Encourages entrepreneurs to assess and articulate their vision,

• Ensures auditing of the organization and its environment,

• Illuminates new possibilities and latitudes

•  Provides organizational focus

•  Guides the structuring of the organization

•  Acts as a guide to decision making

•  Provides a starting point for the setting of objectives

• •  Acts as a common language
• for stakeholders

vision mission and strategy are intertwined aspects

•  Focused entry: addressing a single well-­‐defined product-­‐defined market.

• Product spread: offering a wide range of products to a single well-­‐defined market

•  Customer spread: delivering a single or narrow range of products to a wide base of customers.

• Adjacency: offering a wide range of products to a broad customer base

• Scatter: a variety of different products offered to a variety of different customers.

•  Offering a new product or service

•  Offering a greater value

•  Creating new relationships

•   Being more flexible

•   Being more responsive

Heuristic: a decision rule based on insight and experience. Are usually general statements, rules of thumb, that reveal the entrepreneur’s attitudes and approaches