ENTREPRENEURSHIP MANAGEMENT

BY ASHOK KUMAR WADHWANI

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 UNIT 4: MARKETING

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 WHAT IS MARKET?
WHY MARKETING IS IMPORTANT
FOR ANY BUSINESS?

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 BASICS OF MARKETING FOR ENTREPRENEURS
• WHAT IS MARKET?
• MARKET IS A PLACE WHERE
• BUYERS AND SELLERS ASSEMBLE/MEET
• TO EXCHANGE THEIR PRODUCTS FOR MONEY WANTS AND NEEDS?
AND VICE-VERSA. ARE THESE BOTH
• MARKETING CONSIDERS THE WANTS AND NEEDS DIFFERENT
OR
OF CUSTOMERS.
SAME?
• MARKETING FOCUSES ON FUTURE GROWTH.

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 BASICS OF MARKETING FOR ENTREPRENEURS
• MARKETING IDENTIFIES • AS PER PHILIP KOTLER (2010)
• CONSUMER WANTS AND NEEDS AND “MARKETING IS A
• THEN PRODUCING PRODUCTS • SOCIAL AND
MANAGERIAL PROCESS
• THAT WILL SATISFY THE IDENTIFIED WANTS AND NEEDS
BY WHICH
AND ALSO
• INDIVIDUALS AND
• PROVIDE MAXIMUM SATISFACTION TO THE CONSUMERS.
GROUPS OBTAIN
• FOCUS MOVES FROM PRODUCTION TO PRODUCT TO SELLING WHAT THEY NEED
TO CONSUMERS AND WANT
• MARKETING IS THE PROCESS BY WHICH A PRODUCT OR • BY CREATING AND
SERVICE IS CONVEYED FROM THE PRODUCER TO THE EXCHANGING
CUSTOMER PRODUCTS AND
• THE CONSUMER IS THE BOSS OR KING WHO DICTATES THE VALUES WITH
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MARKET. OTHERS”
ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4
 THE MARKETING CONCEPT FOR ENTREPRENEURS
THE MARKETING • FOR THE ENTREPRENEUR, A MARKET IS A GROUP OF
INDIVIDUALS OR COMPANIES (POTENTIAL CUSTOMERS) WHO
CONCEPT FOR
HAVE PURCHASING POWER AND UNSATISFIED NEEDS.
ENTREPRENEURS
• A NEW VENTURE WILL SURVIVE ONLY IF THERE IS SUFFICIENT
INCLUDES KNOWING
DEMAND FOR ITS PRODUCT OR SERVICE FROM A MARKET AND
• WHAT A MARKET THE BUSINESS CAN PRODUCE THE PRODUCTS OR SERVICES
CONSISTS OF ? WITH SUFFICIENT PROFIT MARGIN TO SUSTAIN ITS EXISTENCE
• THE UNDERSTANDING OF • ENTREPRENEURS SHOULD GAIN IN-DEPTH KNOWLEDGE ABOUT
MARKET RESEARCH THE SPECIFIC MARKET, TRANSLATE THIS KNOWLEDGE INTO A
WELL-FORMULATED BUSINESS PLAN AND OPERATIONALIZE A
• THE DEVELOPMENT OF
BUSINESS MODEL.
MARKETING PLAN
• EFFECTIVE MARKETING ANALYSIS CAN ALSO HELP A NEW
• THE PROPER APPROACH
VENTURE POSITION ITSELF AND MAKE CHANGES THAT WILL
TO A PRICING STRATEGY
RESULT IN INCREASED SALES. 6

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 MARKETING SKILLS OF GREAT ENTREPRENEURS
• THEY HAVE UNIQUE ENVIRONMENTAL INSIGHT, WHICH THEY USE TO IDENTIFY OPPORTUNITIES THAT
OTHERS OVERLOOK.
• THEY DEVELOP NEW MARKETING STRATEGIES THAT DRAW ON THEIR UNIQUE INSIGHTS.
• THEY THINK THROUGH THE IMPLICATIONS OF ANY PROPOSED STRATEGY, SCREENING IT AGAINST
THEIR KNOWLEDGE OF HOW THE MARKETPLACE FUNCTIONS. THEY IDENTIFY AND SOLVE PROBLEMS
THAT OTHERS DO NOT EVEN RECOGNIZE.
• THEY ARE METICULOUS ABOUT DETAILS AND ARE ALWAYS IN SEARCH OF NEW COMPETITIVE
ADVANTAGES IN QUALITY AND COST REDUCTION.
• EXECUTING THEIR MANAGEMENT STRATEGIES ENTHUSIASTICALLY AND AUTOCRATICALLY.
• THEY MAINTAIN CLOSE INFORMATION CONTROL WHEN THEY DELEGATE.
• THEY DRIVE THEMSELVES AND THEIR SUBORDINATES. THEY HAVE ATTITUDE OF NOT TO GIVE UP.
• THEY HAVE CLEAR VISIONS OF WHAT THEY WANT TO ACHIEVE NEXT. THEY CAN SEE FURTHER DOWN
THE ROAD THAN THE AVERAGE MANAGER CAN SEE. 7

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 IS MARKETING AND SELLING SAME?

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 DIFFERENCE BETWEEN SELLING AND MARKETING
• “SELLING FOCUSES ON THE NEEDS OF THE SELLER, MARKETING FOCUSES ON THE
WANTS AND NEEDS OF THE BUYER.
• SELLING IS PREOCCUPIED WITH THE SELLER’S NEED TO CONVERT HIS PRODUCT INTO
CASH, MARKETING WITH THE IDEA OF SATISFYING THE NEEDS OF THE CUSTOMER BY
MEANS OF THE PRODUCT AND THINGS ASSOCIATED WITH CREATING, DELIVERING AND,
FINALLY, CONSUMING IT.”
SELLING MARKETING
Emphasis on the product Emphasis on the customer’s Wants and Needs
The producer first produces the product and then The producers first determines the customers’ Wants
figure out how to sell it. and then figures out to produce and deliver the
product to satisfy the wants.
Focus on Need of Sellers Focus on Wants and Needs of Buyer
Planning is short-run oriented in terms of today’s Planning is long-run oriented in terms of new
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products and markets. products, tomorrow’s markets, and future growth.
ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4
 STP – SEGMENTATION, TARGETING AND POSITIONING
MARKET SEGMENTATION
• PHILIP KOTLER: MARKET SEGMENTATION AS
• “THE SUBDIVIDING OF A MARKET
• INTO HOMOGENEOUS SUBSETS OF CUSTOMERS
• WHERE ANY SUBSET MAY CONCEIVABLE BE SELECTED ON A MARKET TARGET TO BE REACHED WITH A
DISTINCT MARKETING MIX”

• MARKET SEGMENTATION CAN BE DEFINED AS THE PROCESS OF DIVIDING THE TOTAL

MARKET INTO ONE OR MORE PARTS (SUB-MARKETS OR SEGMENTS) EACH OF WHICH TENDS
TO BE HOMOGENEOUS IN ALL SIGNIFICANT ASPECTS.
• THE IMPORTANCE OF MARKET SEGMENTATION OR TARGET GROUP IS THAT IT HELPS THE
ENTREPRENEUR IN FINE TUNING HIS/HER EFFORTS TO WHAT THE TARGET GROUP OF
CUSTOMERS WANT.

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 MARKET SEGMENT TARGET AND POSITIONING

• THE SEGMENT OF THE MARKET FOR WHICH YOU DESIGN YOUR OFFERING IS
KNOWN AS YOUR TARGET MARKET.
• THE STARTING POINT FOR SUCCESSFULLY MARKETING YOUR OFFERING IS TO
MAKE SURE THAT YOU PROVIDE SOMETHING THAT IS APPEALING TO YOUR TARGET
MARKET.
• GROUP IS LARGE ENOUGH TO SUPPORT YOUR BUSINESS.
• YOUR OFFERING HAVE TO APPEAL TO ONE OR MORE SEGMENTS OF THE MARKET
• DO MORE EFFECTIVELY THAN THE OFFERINGS OF COMPETITIVE BUSINESSES.

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 BASES OR CRITERIA OF MARKET SEGMENTATION
SOME COMMONLY USED BASES/VARIABLES FOR MARKET SEGMENTATION ARE:
• GEOGRAPHICAL VARIABLE (LOCATION: RURAL/URBAN, CITIES, REGIONS, COUNTIES AND
INTERNATIONAL REGIONS)
• DEMOGRAPHIC VARIABLES
• AGE VARIABLE
• GENDER VARIABLE
• EDUCATION VARIABLE
• INCOME VARIABLE
• MARITAL STATUS
• OCCUPATION
• RELIGION
• PSYCHOLOGICAL / PSYCHOGRAPHIC VARIABLES 12

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 COMMUNICATE YOUR VALUE TO YOUR TARGET MARKET
• ONCE YOU HAVE CREATED A DIFFERENTIATED MARKET OFFERING WHICH PROVIDES
SUPERIOR VALUE TO YOUR SELECTED TARGET MARKETS, THE NEXT STEP IS COMMUNICATION.
• PRESENT YOUR MARKET OFFERING IN SUCH A WAY THAT YOUR TARGET CUSTOMERS
PERCEIVE THE SUPERIOR VALUE THAT YOU ARE OFFERING.
• THE ULTIMATE GOAL OF ALL THIS IS SIMPLY TO GET CUSTOMERS TO BUY PARTICULAR MARKET
OFFERINGS.
1. EVERYTHING YOU DO COMMUNICATES
2. WORD OF MOUTH IS CRITICAL
3. YOU NEVER GET A SECOND CHANCE TO MAKE A FIRST IMPRESSION
4. PUBLICITY IS IMPORTANT
5. KEEP IT SIMPLE
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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 IMPORTANCE OF MARKET SEGMENTATION
• THE MARKETER DOES NOT NEED TO WASTE HIS EFFORTS AND RESOURCES OVER
THE ENTIRE MARKET. INSTEAD, HE/SHE CAN CONCENTRATE ON SPECIFIC SEGMENT
OF MARKET AND CAN GET BETTER RETURNS.
• BY CONCENTRATING ON A SPECIFIC GROUP OF THE CUSTOMERS, THE MARKETER
CAN TAKE BETTER CARE OF THE GROUP.
• THE POLICIES FRAMED BASED ON THE PARTICULAR GROUP BECOME MORE
REALISTIC AND REWARDING.
• THE MARKETER CAN MAKE MORE EFFICIENT USE OF MARKETING RESOURCES.
• THE MARKETING MIX (4Ps OF PRODUCT, PRICE, PROMOTION, PLACE) CAN BE
DESIGNED BETTER KEEPING SEGMENT OF CUSTOMERS IN MIND.

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 STEPS INVOLVED IN SEGMENTING THE MARKET
• ASSESS THE DIFFERENCES BETWEEN GROUPS IN TERMS OF THEIR NEEDS AND
REQUIREMENTS AND THEIR PERCEPTION ABOUT THE PRODUCT TO BE OFFERED.
• FIND OUT THE DESCRIPTIVE CHARACTERISTICS THAT CAN BE USED FOR PARTICULAR
SEGMENT OF A CUSTOMERS.
• SEGREGATE THE CUSTOMERS BASED ON ABOVE CRITERIA.
• ESTIMATE THE VOLUMES OF PURCHASE BY DIFFERENT SEGMENTS. MARKET SIZE
AND SALES.
• FINALLY, SELECT THOSE SEGMENTS WHICH ARE HIGHEST POTENTIAL IN TERMS OF
BUSINESS GROWTH AND REVENUE GENERATION.

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4


WHAT IS “VALUE”
PERCEIVED BY CUSTOMER?
IMPORTANT ROLE OF
VALUE FOR RETAILERS’
BUILDING AND
SUSTAINING
RELATIONSHIPS.
• VALUE - PERCEIVED
BENEFITS RECEIVED
VERSUS THE PRICES PAID.
• PERCEIVED VALUE VARIES
BY TYPE OF SHOPPER.
ALLIANCE
VALUE PROPOSITION
VALUE PROPOSITION:
WTP
• VALUE PROPOSITION = GET – GIVE
• THE CUSTOMER VALUE PROPOSITION = V – P
(THE CUSTOMERS’ PERCEPTION OF HOW MUCH
VALUE THEY
ARE GETTING FOR THE MONEY)
• PROFIT FORMULA: PROFIT = P – C
C = PER UNIT COST
• GREATER THE VALUE DELIVERED ( V ) AND THE
LOWER THE PRICE ( P ), THE MORE ATTRACTIVE IS P = PRODUCT PRICE
THE COMPANY’S VALUE PROPOSITION. (V > P)
V = CUSTOMER VALUE
• THE LOWER THE COSTS ( C ), GIVEN THE
CUSTOMER VALUE PROPOSITION ( V – P ), THE
GREATER THE ABILITY OF THE BUSINESS MODEL TO
BE A MONEY-MAKER (PROFIT MAXIMIZATION).
ENTREPRENEURSHIP MANAGEMENT – UNIT 4 16
 MARKETING MIX
• THE TERM “MARKETING MIX” WAS INTRODUCED BY PROFESSOR NEIL H. BORDEN (1964) OF HARVARD
BUSINESS SCHOOL.
• A LIST OF THE IMPORTANT ELEMENTS OR INGREDIENTS THAT MAKE UP THE MARKETING
PROGRAMMES
• A LIST OF FORCES THAT BEAR ON MARKETING OPERATIONS OF A FIRM WHICH THE MARKETING
MANAGER MUST ADJUST IN HIS SEARCH FOR A MIX OR PROGRAMME THAT CAN BE SUCCESSFUL.
• JEROME McCARTHY DIVIDED THE ‘MARKETING MIX’ INTO FOUR FACTORS UNDER 4Ps:
• PRODUCT
• PRICE
• PROMOTION
• PLACE (PHYSICAL DISTRIBUTION)

• PHILIP KOTLER HAS DEFINED ‘MARKETING MIX’ AS “THE SET OF CONTROLLABLE TACTICAL MARKETING
TOOLS – PRODUCT, PRICE, PLACE AND PROMOTION THAT THE FIRM BLENDS TO PRODUCE THE RESPONSE IT
WANTS IN THE TARGET MARKET” 17

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 PRODUCT
Quality, PRICE
Design, List Price, Discounts,
Features, Payment Period, Credit
Brand Name, Terms
Packaging, Service
MARKETING
MIX MARKETING MIX

PROMOTION
PLACE
Advertisement,
Channels, Coverage,
Personal Selling, Sales
Location, Inventory,
Promotion (Offers),
Transportation
Public Relation
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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 SWOT ANALYSIS
• ENTREPRENEUR ANALYSES EXISTING MARKET AND BUSINESS
ENVIRONMENT TO IDENTIFY THE BUSINESS OPPORTUNITY. SWOT ANALYSIS
• BY ANALYSING MARKET ENTREPRENEUR COMES TO KNOW Internal to the Firm
ABOUT HIS/HER STRENGTH AND WEAKNESSES AS WELL AS
THE OPPORTUNITIES AND THREATS EXISTING IN THE
ENVIRONMENT.
STRENGTHS WEAKNESSES
• WANTS AND NEED OF CUSTOMER / SOCIETY
• POTENTIAL
S W
• EMERGING
• UNSATISFIED O T
• UNSOLVED
OPPORTUNITIES THREATS
• DEMAND OF PRODUCTS OR SERVICES
• COMPETITORS IN THE MARKET
• MARKETING ANALYSIS PROVIDES BASIC AND USEFUL INPUTS
External to the Firm
TO THE MARKETING FUNCTION. 19

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 SWOT ANALYSIS
SWOT ANALYSIS IS A POWERFUL TOOL FOR SIZING UP A FIRM’S: Internal to the Firm
• INTERNAL STRENGTHS (THE BASIS FOR STRATEGY)

• INTERNAL WEAKNESSES (DEFICIENT CAPABILITIES)

STRENGTHS WEAKNESSES
• MARKET OPPORTUNITIES (STRATEGIC OBJECTIVES)
• EXTERNAL THREATS (STRATEGIC DEFENSES)
S W
TWO FACETS OF A COMPANY’S SITUATION ARE:
O T
ITS EXTERNAL ENVIRONMENT— INDUSTRY LEVEL: THE COMPETITIVE
OPPORTUNITIES THREATS
CONDITIONS OF THE INDUSTRY IN WHICH THE COMPANY OPERATES.

ITS INTERNAL ENVIRONMENT— FIRM LEVEL: PARTICULARLY THE COMPANY’S

RESOURCES AND ORGANIZATIONAL CAPABILITIES. External to the Firm

• A firm’s strengths represent its competitive assets.

• A firm’s weaknesses are shortcomings that constitute competitive liabilities.
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 USING SWOT ANALYSIS
• What are the attractive aspects of the firm’s situation?
• What aspects are of the most concern?
• Are the firm’s internal strengths and competitive assets sufficiently strong to
enable it to compete successfully?
• Are the firm’s weaknesses and competitive deficiencies correctable, or could
they be fatal?
• Do the firm’s strengths outweigh its weaknesses by an attractive margin?
• Does the firm have attractive market opportunities that are well suited to its
internal strengths?
• Does the firm lack the competitive assets (internal strengths) to pursue the most
attractive opportunities?

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 THE COMPONENTS OF EFFECTIVE MARKETING
• EFFECTIVE MARKETING IS BASED ON THREE KEY ELEMENTS:
• MARKETING PHILOSOPHY
• MARKET SEGMENTATION
• CONSUMER BEHAVIOR
• MARKETING PHILOSOPHY
• PRODUCTION-DRIVEN: THE PRODUCT-DRIVEN PHILOSOPHY IS BASED ON THE ‘BUILD IT (PRODUCE GOOD
PRODUCTS EFFICIENTLY) AND WORRY ABOUT SALES LATER.
• NEW VENTURES THAT PRODUCE HIGH-TECH, STATE-OF THE-ART OUTPUT SOMETIMES USE A PRODUCT-DRIVEN PHILOSOPHY
• SALES-DRIVEN: A SALES DRIVEN PHILOSOPHY FOCUSES ON PERSONAL SELLING AND ADVERTISING TO
PERSUADE CUSTOMERS TO BUY THE COMPANY’S OUTPUT, REGARDLESS OF THE PRODUCT’S QUALITY.
• NEW CAR DEALERS, FOR EXAMPLE, RELY HEAVILY ON A SALES-DRIVEN PHILOSOPHY.
• CONSUMER-DRIVEN: RELIES ON RESEARCH TO DISCOVER CONSUMER PREFERENCES, DESIRES AND NEEDS
BEFORE PRODUCTION ACTUALLY BEGINS. THIS PHILOSOPHY STRESSES THE NEED FOR MARKETING
RESEARCH IN ORDER TO BETTER UNDERSTAND WHERE OR WHO A MARKET IS AND TO DEVELOP A
STRATEGY TARGETED TOWARDS THAT GROUP. 24

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 THE COMPONENTS OF EFFECTIVE MARKETING
THREE MAJOR FACTORS INFLUENCE THE CHOICE OF A MARKETING PHILOSOPHY:
• COMPETITIVE PRESSURE: MANY TIMES THE INTENSITY OF THE COMPETITION WILL DICTATE A
NEW VENTURE’S PHILOSOPHY.
• FOR EXAMPLE, STRONG COMPETITION WILL FORCE MANY ENTREPRENEURS TO DEVELOP A
CONSUMER ORIENTATION IN ORDER TO GAIN AN EDGE OVER COMPETITORS. IF, ON THE
OTHER HAND, LITTLE COMPETITION EXISTS, THE ENTREPRENEUR MAY REMAIN WITH A
PRODUCTION ORIENTATION IN THE BELIEF THAT WHAT IS PRODUCED WILL BE SOLD.
• ENTREPRENEUR’S BACKGROUND: THE RANGE OF SKILLS AND ABILITIES OF ENTREPRENEURS.
SOME HAVE A SALES AND MARKETING BACKGROUND, OTHERS HAVE PRODUCTION AND
OPERATIONS EXPERIENCE. THE ENTREPRENEUR’S STRENGTHS WILL INFLUENCE THE CHOICE OF A
MARKET PHILOSOPHY.
• SHORT-TERM FOCUS: SOMETIMES A SALES-DRIVEN PHILOSOPHY MAY BE PREFERRED DUE TO A
SHORT-TERM FOCUS ON MOVING THE MERCHANDISE AND GENERATING SALES. 25

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 DEVELOPING A MARKETING PLAN
A MARKETING PLAN IS THE PROCESS OF DETERMINING A CLEAR, COMPREHENSIVE APPROACH TO THE CREATION
OF CUSTOMERS. THE FOLLOWING ELEMENTS ARE CRITICAL FOR DEVELOPING THIS PLAN:

• CURRENT MARKETING RESEARCH – DETERMINING WHO THE CUSTOMERS ARE, WHAT THEY WANT AND HOW
THEY BUY
• SALES RESEARCH AND ANALYSIS – PROMOTING AND DISTRIBUTING PRODUCTS ACCORDING TO MARKETING
RESEARCH FINDINGS
• MARKETING INFORMATION SYSTEM – COLLECTING, SCREENING, ANALYZING, STORING, RETRIEVING AND
DISSEMINATING MARKETING INFORMATION ON WHICH TO BASE PLANS, DECISIONS AND ACTIONS

• SALES FORECASTING – HISTORICAL SALES DATA FROM MARKET, COORDINATING PERSONAL JUDGEMENT WITH
RELIABLE MARKET INFORMATION
• EVALUATION – IDENTIFYING AND ASSESSING DEVIATIONS FROM MARKETING PLANS.

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 DEVELOPING A MARKETING PLAN
1. CURRENT MARKETING RESEARCH
THE PURPOSE OF MARKETING RESEARCH IS TO IDENTIFY CUSTOMERS – TARGET MARKETS – AND
TO FULFIL THEIR DESIRES. THE FOLLOWING AREAS TO BE CONSIDERED CONSIDERED:
• THE COMPANY’S MAJOR STRENGTHS AND WEAKNESSES: THESE FACTORS OFFER INSIGHTS
INTO PROFITABLE OPPORTUNITIES AND POTENTIAL PROBLEMS AND PROVIDE THE BASIS FOR
EFFECTIVE DECISION MAKING.
• MARKET PROFILE: A MARKET PROFILE HELPS A COMPANY IDENTIFY ITS CURRENT MARKET
AND SERVICE NEEDS. HOW PROFITABLE ARE EXISTING COMPANY SERVICES? WHICH OF THESE
SERVICES OFFER THE MOST POTENTIAL? WHICH (IF ANY) ARE INAPPROPRIATE? WHICH WILL
CUSTOMERS CEASE TO NEED IN THE FUTURE?
• CURRENT AND BEST CUSTOMERS: IDENTIFYING THE COMPANY’S CURRENT CLIENTS ALLOWS
MANAGEMENT TO DETERMINE WHERE TO ALLOCATE RESOURCES. DEFINING THE BEST
CUSTOMERS ENABLES MANAGEMENT TO MORE DIRECTLY SEGMENT THIS MARKET NICHE. 27

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 DEVELOPING A MARKETING PLAN
• POTENTIAL CUSTOMERS: BY IDENTIFYING POTENTIAL CUSTOMERS, EITHER GEOGRAPHICALLY OR
WITH AN INDUSTRY-WIDE ANALYSIS OF ITS MARKETING AREA, A COMPANY INCREASES ITS ABILITY
TO TARGET THIS GROUP, THUS TURNING POTENTIAL CUSTOMERS INTO CURRENT CUSTOMERS.
• COMPETITION: BY IDENTIFYING THE COMPETITION A COMPANY CAN DETERMINE WHICH
BUSINESSES ARE MOST WILLING TO PURSUE THE SAME BASIC MARKET NICHE. BY EXAMINING THE
COMPETITOR’S PRODUCTS AN ENTREPRENEUR CAN ESTABLISH HOW DIFFERENT THE PRODUCT
OFFERING WILL BE AND PRE-EMPT THE LEVEL OF COMPETITOR RESPONSE.
• OUTSIDE FACTORS: THIS ANALYSIS FOCUSES ON CHANGING TRENDS IN DEMOGRAPHICS,
ECONOMICS, TECHNOLOGY, CULTURAL ATTITUDES AND GOVERNMENTAL POLICY. THESE FACTORS
MAY HAVE SUBSTANTIAL IMPACT ON CUSTOMER NEEDS AND, CONSEQUENTLY, EXPECTED SERVICES.
• LEGAL CHANGES: MARKETING RESEARCH PERFORMS THE IMPORTANT TASK OF KEEPING
MANAGEMENT ABREAST OF SIGNIFICANT CHANGES IN GOVERNMENTAL RATES, STANDARDS AND TAX
LAWS.
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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 DEVELOPING A MARKETING PLAN
2. CURRENT SALES ANALYSIS
THE FOLLOWING IS A LIST OF POTENTIAL QUESTIONS TO BE ANSWERED BY THIS RESEARCH.

• 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 SALESPEOPLE’S 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 OR DECLINE OF A CUSTOMER’S OR A PROSPECT’S BUSINESS AFFECT THE COMPANY’S
OWN SALES?

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 DEVELOPING A MARKETING PLAN
3. MARKETING INFORMATION SYSTEM
A MARKETING INFORMATION SYSTEM COMPILES
AND ORGANISES DATA RELATING TO COST,
REVENUE AND PROFIT FROM THE CUSTOMER BASE.
THIS INFORMATION CAN BE USEFUL FOR
MONITORING THE STRATEGIES, DECISIONS AND
PROGRAMS CONCERNED WITH MARKETING. AS
WITH ALL INFORMATION SYSTEMS DESIGNS, THE
KEY FACTORS
THAT AFFECT THE VALUE OF SUCH A SYSTEM ARE:
(1) DATA RELIABILITY
(2) DATA USEFULNESS
(3) REPORTING SYSTEM TIMELINESS
(4) DATA RELEVANCE
(5) SYSTEM COST
ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4
4. SALES FORECASTING
SALES FORECASTING IS THE PROCESS OF PROJECTING FUTURE
SALES THROUGH HISTORICAL SALES FIGURES.
5. EVALUATION
THE FINAL CRITICAL FACTOR IN THE MARKETING PLANNING
PROCESS IS EVALUATION. BECAUSE A NUMBER OF VARIABLES
CAN AFFECT THE OUTCOME OF MARKETING PLANNING, IT IS
IMPORTANT TO EVALUATE PERFORMANCE. MOST IMPORTANTLY,
REPORTS SHOULD BE GENERATED FROM AN ANALYSIS OF
CUSTOMER RETENTION OR LOSS AS WELL AS ESTABLISHED
CUSTOMER PREFERENCES AND REACTIONS.
THIS ANALYSIS CAN BE MEASURED AGAINST PERFORMANCE IN
SALES VOLUME, GROSS SALES DOLLARS OR MARKET SHARE. IT
IS ONLY THROUGH THIS TYPE OF EVALUATION THAT FLEXIBILITY
AND ADJUSTMENT CAN BE INCORPORATED INTO MARKETING 30
PLANNING.
 KEY CONSIDERATIONS FOR ENTREPRENEURS IN MARKETING PLAN
MARKETING PLANS ARE PART OF A VENTURE’S OVERALL STRATEGIC EFFORT. TO BE EFFECTIVE, THESE
PLANS MUST BE BASED ON THE VENTURE’S SPECIFIC GOALS.
A FIVE-STEP PROGRAM DESIGNED TO HELP ENTREPRENEURS FOLLOW A STRUCTURED APPROACH TO
DEVELOPING A MARKET PLAN.

STEP 1: APPRAISE STRENGTHS AND WEAKNESSES, EMPHASIZING FACTORS THAT WILL CONTRIBUTE TO
THE COMPANY’S COMPETITIVE EDGE. CONSIDER PRODUCT DESIGN, RELIABILITY, DURABILITY,
PRICE/QUALITY RATIOS, PRODUCTION CAPACITIES AND LIMITATIONS, RESOURCES AND NEED FOR
SPECIALIZED EXPERTISE.

STEP 2: DEVELOP MARKETING OBJECTIVES ALONG WITH THE SHORT- AND INTERMEDIATE-RANGE
SALES GOALS NECESSARY TO MEET THOSE OBJECTIVES. NEXT, DEVELOP SPECIFIC SALES PLANS FOR THE
CURRENT FISCAL PERIOD. THESE GOALS SHOULD BE CLEARLY STATED, MEASURABLE AND WITHIN THE
COMPANY’S CAPABILITIES. TO BE REALISTIC, THESE GOALS SHOULD REQUIRE ONLY REASONABLE
EFFORTS AND AFFORDABLE EXPENDITURES.
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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 KEY CONSIDERATIONS FOR ENTREPRENEURS IN MARKETING PLAN
STEP 3: DEVELOP PRODUCT/SERVICE STRATEGIES. THE PRODUCT STRATEGY BEGINS WITH IDENTIFYING THE
END USERS, WHOLESALERS AND RETAILERS, AS WELL AS THEIR NEEDS AND SPECIFICATIONS. THE PRODUCT’S
DESIGN, FEATURES, PERFORMANCE, COST AND PRICE THEN SHOULD BE MATCHED TO THESE NEEDS.

STEP 4: DEVELOP MARKETING STRATEGIES. STRATEGIES ARE NEEDED TO ACHIEVE THE COMPANY’S
INTERMEDIATE AND LONG-RANGE SALES GOALS AND LONG-TERM MARKETING OBJECTIVES. THESE
STRATEGIES SHOULD INCLUDE ADVERTISING, SALES PROMOTION CAMPAIGNS, TRADE SHOWS, DIRECT MAIL
AND TELEMARKETING. STRATEGIES ALSO MAY BE NECESSARY FOR INCREASING THE SIZE OF THE SALES FORCE
OR MARKETING NEW PRODUCTS. CONTINGENCY PLANS WILL BE NEEDED IN THE EVENT OF TECHNOLOGICAL
CHANGES, GEOGRAPHIC MARKET SHIFTS OR INFLATION.

STEP 5: DETERMINE A PRICING STRUCTURE. A COMPANY’S PRICING STRUCTURE DICTATES WHICH CUSTOMERS
WILL BE ATTRACTED, AS WELL AS THE TYPE OR QUALITY OF PRODUCTS/SERVICES THAT WILL BE PROVIDED. MANY
BUSINESS OWNERS BELIEVE THE MARKET DICTATES A COMPETITIVE PRICING STRUCTURE. BUT THIS IS NOT ALWAYS THE
CASE – MANY COMPANIES WITH A HIGH PRICE STRUCTURE ARE VERY SUCCESSFUL. REGARDLESS OF THE STRATEGIES,
CUSTOMERS MUST BELIEVE THAT THE PRODUCT’S PRICE IS APPROPRIATE. THE PRICE OF A PRODUCT OR SERVICE,
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THEREFORE, SHOULD NOT BE SET UNTIL MARKETING STRATEGIES HAVE BEEN DEVELOPED.

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ALLIANCE
 MARKETING RESEARCH QUESTIONS
SALES
1. DO YOU KNOW ALL YOU NEED TO KNOW ABOUT YOUR COMPETITORS’ SALES PERFORMANCE BY TYPE OF
PRODUCT AND TERRITORY?

2. DO YOU KNOW WHICH ACCOUNTS ARE PROFITABLE AND HOW TO RECOGNIZE A POTENTIALLY PROFITABLE ONE?
3. IS YOUR SALES POWER DEPLOYED WHERE IT CAN DO THE MOST GOOD, MAXIMIZING YOUR INVESTMENT IN
SELLING COSTS?
DISTRIBUTION
1. IF YOU ARE CONSIDERING INTRODUCING A NEW PRODUCT OR LINE OF PRODUCTS, DO YOU KNOW ALL YOU
SHOULD ABOUT DISTRIBUTORS’ AND DEALERS’ ATTITUDES TOWARDS IT?
2. ARE YOUR DISTRIBUTORS’ AND DEALERS’ SALESPEOPLE SAYING THE RIGHT THINGS ABOUT YOUR PRODUCTS OR
SERVICES?
3. 3 HAS YOUR DISTRIBUTION PATTERN CHANGED ALONG WITH THE GEOGRAPHIC SHIFTS OF YOUR MARKETS?

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 MARKETING RESEARCH QUESTIONS
MARKETS
1. DO YOU KNOW ALL THAT WOULD BE USEFUL ABOUT THE DIFFERENCES IN BUYING HABITS AND TASTES BY
TERRITORY AND KIND OF PRODUCT?

2. DO YOU HAVE AS MUCH INFORMATION AS YOU NEED ON BRAND OR MANUFACTURER LOYALTY AND REPEAT
PURCHASING IN YOUR PRODUCT CATEGORY?
3. CAN YOU NOW PLOT, FROM PERIOD TO PERIOD, YOUR MARKET SHARE OF SALES BY PRODUCTS?
ADVERTISING
1. IS YOUR ADVERTISING REACHING THE RIGHT PEOPLE?
2. DO YOU KNOW HOW EFFECTIVE YOUR ADVERTISING IS IN COMPARISON TO THAT OF YOUR COMPETITORS?
3. IS YOUR BUDGET ALLOCATED APPROPRIATELY FOR GREATER PROFIT – ACCORDING TO PRODUCTS, TERRITORIES
AND MARKET POTENTIALS?

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 MARKETING RESEARCH QUESTIONS
PRODUCTS
1. DO YOU HAVE A RELIABLE QUANTITATIVE METHOD FOR TESTING THE MARKET ACCEPTABILITY OF NEW PRODUCTS
AND PRODUCT CHANGES?

2. DO YOU HAVE A RELIABLE METHOD FOR TESTING THE EFFECT ON SALES OF NEW OR CHANGED PACKAGING?
3. DO YOU KNOW WHETHER ADDING HIGHER OR LOWER QUALITY LEVELS WOULD MAKE NEW PROFITABLE
MARKETS FOR YOUR PRODUCTS?

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ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

 STRATEGIC APPROACH TO MARKET ENTRY

CHOOSE
ASSESS THE ASSESS CHOOSE
BUSINESS IMPLEMENT
MARKET COMPETITION ENTRY OPTION
MODEL

SHORT / LONG
TERM GOAL
DOES PRODUCT
SIZE
FRAGMENTED / IS LOCAL OR SERVICE NEED
CONCENTRATED PARTNER TO BE LOCALISE?
GROWTH
NEEDED?
PEOPLE WITH THE
HOW RESOURCES NEED
DEMAND DRIVE RIGHT SKILLS?
DIFFERENTIATED? ACQUISITION/
MERGER IS BUSINESS
GEOGRAPHY
COST MODEL FLEXIBLE
ADVANTAGES JOINT VENTURE TO HANDLE
REGULATIONS
CHANGE?
STRENGTH OF
RELATIONSHIP 37

ALLIANCE ENTREPRENEURSHIP MANAGEMENT – UNIT 4

REFERENCES:
1. KURATKO, D.F. “ENTREPRENEURSHIP: A SOUTH-ASIAN PERSPECTIVE,” CENGAGE LEARNING.
2. DAVID H. HOLT “ENTREPRENEURSHIP: NEW VENTURE CREATION”, PEARSON.
3. ENTREPRENEURSHIP DEVELOPMENT BY VASANT DESAI
4. ENTREPRENEURIAL DEVELOPMENT BY DR. S. S. KHANKA

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