Speaker: Jon Worren, MaRS Discovery District
In this session we look at the basic concepts and principles of marketing that are relevant for early stage start-ups. Jon uses real-life examples to illustrate some of the following:
* What is particular about marketing technology products?
* Understanding the language of marketing for start-ups
* Designing the marketing function in early stage companies
* Creating marketing plans for companies with scarce resources
Part of the MaRS CIBC Presents Entrepreneurship 101 lecture series.
http://www.marsdd.com/ent101
3. Contents
• Goal: To Define Key Marketing Concepts
• Introduction
– Defining the field and scope
• Part I: Analytical Foundation
• Part II: Critical Value Factors
• Part III: Strategic Approach
5. Marketing - the definition
• Marketing is 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.
Source: AMA
6. The Marketing Mix
Product Price
• Variety, Quality, Design, • List price, Discounts, Payment
Warranty, Packaging, Brand Terms, Credit
Name, Features
4Ps
Promotion Place (Distribution)
• Advertising, Sales Promotion, • Channels, Coverage, Locations,
Sales Force, Direct Marketing, Assortments, Transportation,
Public Relations Inventory
9. H1: Your Business Idea
• The name of your business/product idea?
• What kind of problem do you solve? Is
this an important problem? Is there a big
potential market?
• How is your competition solving this
problem for their customers today?
• Why are you qualified to solve this
problem better than your competitors? Is
your uniqueness sustainable over time?
15. Customer Pain
• What problem are you solving for your
customer?
• Is the customer aware of the problem or is
it a latent problem?
• Market Analysis: Customer Needs
• C.Christensen: Job-to-be-done
• Avoid: Your reason to sell…..
16. Whole Product
Potential
Align with stage of Adoption Curve
Expected
Extended
Core
Product
19. Competition
• There is always competition!
• Presence of choice is competition:
– Economic: Spend the money on other things
• Compete for product leadership
– Reference: Spend the money with competitor
• Compete through differentiation
– Inertia: Choose not to spend (biggest)
• Compete through FUD (or simply wait….)
20. BOS: The Art of Differentiation
Source: Kim, W. C. & Mauborgne, R. (2005). Blue
Ocean Strategy: How to Create Uncontested Market
Space and Make the Competition Irrelevant.
21. Partnering & Distribution
Partner Distributor
• Offers a part that • Offers an avenue to
complements Core customers
Product • Is determined by
• Implicit part of value complexity of solution
proposition • Cost and availability of
• Role of partners change channel important factors
over time • In some cases: distributor
and partner is the same.
24. Pricing Principles
• Basis: Understand the value for your
customer.
– Nature of Value: One-off or ongoing
– Will pay perceived value – not objective value
• Importance of Customer Relationship
• Critical for Positioning
• Avoid pricing complexity
• Be fair
25. Positioning
• Is in your customer’s mind
• What is the most attractive position to
‘own’?
• Reflects the sum of your Marketing Mix,
but your marketing communication, price
and physical attributes carry the most
weight.
26. Positioning Statement
• For… (your target customer or market)
• Who… (the compelling reason to buy)
• Our product is a… (your placement within a new
or existing category)
• That provides… (the key benefit that directly
addresses your customer’s compelling reason to buy)
• Unlike… (the primary alternatives or competitors)
• We have assembled… (key difference or point of
differentiation in relation to your specific target customer)
28. The TiVo Story
• Established 1997
• Created the world's first digital video
recorder (DVR)
• Potential to “kill” commercial TV
• Launch strategy: “Celebrity Evangelists”
• Revenue in Q3-07: $ 133M (peak)
• Revenue in Q2-09: $ 106M (down 20%)
• Stock price: $ 10.66 (All time high: $ 70)
29. TiVo: Customer Pain
• Time-shifting (need currently filled by
VCR)
• Challenge: People don’t like VCRs
because they don’t understand how to use
them.
• Solution: Avoid positioning TiVo as
alternative to VCR.
30. TiVo Positioning
• Original position:
– “TiVo is like having your own TV network where
you get to decide what's on and when"
• Problem 1: “Personal TV Network” –
customers have no familiarity with term
• Problem 2: Didn’t solve the customer pain
• Problem 3: Wrong type of evangelists
• Problem 4: The life cycle too short