George Miaoulis, Jr. Ph.D. Fulbright Scholar

Report
A Practical Approach to
Marketing of Innovations in
Resource Constrained Firms
By
George Miaoulis, Jr. Ph.D.
Fulbright Scholar - VUZF University, Bulgaria
Professor of Management - Hiram College, USA
Paul Gilson Ph.D.
Assistant Professor of Entrepreneurship
Eastern Connecticut State University, USA
Russell Jones B.S.
Student
Eastern Connecticut State University, USA
A Practical Approach …
“Common Sense”
Common Sense Is Often Lacking …
Common Sense Is Often Lacking …
The Typical Entrepreneurial
Approach to Marketing Is …
“Build it and they will come …”
Little Tolerance for Marketing Planning
Integrated Communications Strategy - Teradyne
Recruiting
Materials
New Product
Launches
Contests
Web Site
Partnerships
Newsletters
Conferences
Media
Relations
Press
Releases
Events
Annual
Report
Advertising
Videos
Signage
Collateral
Brand
Infrastructure
Promotional
Items
Articles
White Papers
CD-ROM
Sponsorships
Database
Marketing
Awards
Trade Shows
E-Mail Marketing
Presentations
Direct Mail
Response
to Crises
How Can We Focus
Marketing Planning ?
Eight [8] Practical Questions
Can Focus Marketing Planning
For the Entrepreneurial Team …
I am not going to tell you
anything you don’t already know …
But, these are questions
entrepreneurial teams typically
don’t know to ask …
In The Resource Constrained Firm …
Financially constrained
Marketing budgets usually do not exist, or are under
funded
Innovative venture often lacks:
Customer base
Recognized branding
Sales force
But most importantly, marketing expertise is
often lacking
1. Who is the competition?
Most entrepreneurial teams believe their
innovation is so unique that there are
no competitors!
This is never true.
Before Smart Phones …
Cell phones
Cameras
PDAs
Email
Fax Machines
Beepers
Pocket Calendars
Land-line Telephones
Telegraph, Post Office, etc.
Innovations Are …
Qualitatively different solutions to
existing problems.
Consumer seek solutions to problems,
thus, there are always competitors.
Understanding the competition and
their marketing strategies is the key
first step …
2. Focus on the Market
The entrepreneurial team focuses on
the product almost exclusively, and
typically not the market.
Yet, the marketplace is …
changing, changing, changing constantly.
Current Marketplace Changes …
Exploding Information - 2013
• 1 million iPhone apps
• 1.7 million books published
• 1 billion websites
• 2 billion websites  2015
• Etc.
http://www.worldometers.info/
Current Marketplace Changes …
• Technology  Exploding
• Social media  Exploding
•
Convergence  Smart phones, iPads …
• Economic restructuring  Global Crisis
• Political dynamics  Mideast ++++
• Etc.
Change is the Only Constant
The entrepreneurial team can be so
product focused they fail to see market
changes during the development process.
3. Is the Innovation
Incremental or Disruptive?
An incremental market entry …
• adds to the existing product offerings,
• is typically better a product, and
• readily accepted as a competitor …
• a new ice cream favor or new Bluetooth
device …
3. Is the Innovation
Incremental or Disruptive?
A disruptive market entry …
• is when the product creates a new category
• technology or design causes the existing
products to become almost obsolete
• this is the true “new product innovation”
Incremental vs. Disruptive
Incremental and disruptive products
• require different strategies and
• entrepreneurial teams often don’t ask
this question – and use incremental
strategies for disruptive products
4. Enhancers vs. Detractors
Enhancers are businesses that can benefit
from the sales of your new product.
Your product in some way complements them
with:
• direct sales,
• image association / enhancement,
• identification of consumers,
• etc.
For Smartphones … Enhancers are …
• Phone service carriers
• Manufacturers of
• Cases
• Screen protectors
• Bluetooth accessories
• Insurance companies
• Etc.
4. Enhancers vs. Detractors
Detractors can often be thought of as
substitutes for your product .
Detractors feel threaten by your product launch
in terms of lost sales, loss of image, loss of
distribution, pricing, etc.
4. Enhancers vs. Detractors
Identifying enhancers can “jump start”
the marketing effort.
5. Market Positioning
Understanding “commonly held perceptions”
of competitive brands provides insights into
identifying market opportunities and / or strong
consumer preferences to overcome.
5. Market Positioning
Most consumers see Nike:
$130 - $350
• trendy athletic shoes,
• associated with famous sport figures, and
• status oriented, and expensive.
5. Market Positioning
As a old, fat runner, with big feet, I see Nike as:
• not sufficiently durable,
• too narrow, uncomfortable big fat feet, and
• overpriced
I have no interest in white and red high
top Michael Jordan’s for $350.
I Wear New Balance
$149
"We don't live by fashion.
Then again, we don't die by it either."
Designed for big feet
for “old men”
Trendy, fashion, status
“youth market”
Marketing positioning allows the innovator
to understand “fit” in the market.
6. Retention Planning
Raising the need for a customer retention
plan before the entrepreneurial team
has its first customer question’s the
marketer’s wisdom
Customer Retention Planning
Marketing
is …
Everything we do to retain our
existing customers, and everything
we do to get new ones.
It takes 16 times less marketing effort to
retain a customer than it takes to acquire a
new customer.
Customer retention is the key to long term
success.
Customer Retention Strategies
Warranty – L.L. Bean – clothing / outdoor retailer
Our products are guaranteed to give 100%
satisfaction in every way. Return anything
purchased from us at any time if it proves
otherwise. We do not want you to have anything
from L.L.Bean that is not completely satisfactory.
7. Innovation Acceptance Criteria
These criteria assist in predicting the rate
adoption of innovations …
•
Relative Advantage
•
Complexity
•
Compatibility
•
Trialability
•
Observability
of
7. Innovation Acceptance Criteria
1. Relative Advantage – does the
innovation have time, cost, convenience,
technology, capacity, or other relative
advantage?
2. Complexity
3. Compatibility
4. Trialability
5. Observability
7. Innovation Acceptance Criteria
1. Relative Advantage – does the innovation
have time, cost, convenience, technology,
capacity, or other relative advantage?
2. Complexity – the customers ability to
understand how the innovation works and
how to use it.
3. Compatibility
4. Trialability
5. Observability
7. Innovation Acceptance Criteria
1. Relative Advantage – does the innovation
have time, cost, convenience, technology,
capacity, or other relative advantage?
2. Complexity – the customers ability to
understand how the innovation works and
how to use it.
3. Compatibility – how compatible is the
innovation with customer usage behaviors
4. Trialability
5. Observability
7. Innovation Acceptance Criteria
• Trialability – can the innovation be tried
or demonstrated on a limited basis?
•
•
In the US Red Bull provided free samples
at universities for 2 years !
Observability
7. Innovation Acceptance Criteria
4. Trialability – can the innovation be tried or
demonstrated on a limited basis?
5. Observability – can the customer
benefits be observed?
8. Segmentation
Process of identifying homogeneous groups
of companies or people called ...
Market Segments
The key issue is identifying and understanding
the key “homogeneous” characteristics
Entrepreneurial View of the Market
(Marketing Myopia)
Market
All Companies or
Customers
Segmentation Perspective
Market Segments
Mass market
1
Small / specialty
segment
5
Service
Overlapping
segments
switching /
dual users
Concentrated
segment
2 3
4
Technology
42
Some Common Segmentation
Approaches
• Seasonality
• Brand preference
• Usage rate
• Media usage
• Occasions of use
• Category Beliefs
• Demographics
• Benefits
• Geography
• Shopping
preferences
I did not tell you anything you don’t
already know … just some …
“Common Sense”
But, these are questions
entrepreneurial teams typically
don’t know to ask …
Thank you …

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