MKTG 350 FINAL
Event Marketing:
can create good feelings about product/service & lead to time-focused set of articles/press interviews to generate buzz. Ex. MetaCreators Corp: small computer graphics software company, desired lots of press at Comdex. CEO held a large party but funded by big industry players as "sponsors"
Proposal
can truly differentiate competition in the sales process. -Develop the proposal template to ensure the company's brand and messaging come through. -Keep in mind that the focus and perspective of the proposal must be the prospect's business, not yours. -Proposal should demonstrate that you have listened and reflected the prospect's specific needs -Establish a collaborative relationship with the prospect prior to proposal.
Case: Anki Building a team:
complex AI robotics-based consumer electronic product company requires a sophisticated combination of: Technology Creative design Manufacturing Supply chain management Sales and marketing The leadership and administrative skills Founders: Boris, Mark & Hanns--provided the compelling product, vision, and culture that attracted and engaged the right team. Led that team to execute on a plan to build and scale the company. Key talents: the founders brought harald belker on board to design the anki drive cars. (designed porsche and benz) Anki ceased its operation April 2019: Anki raised $182 million but only sold 1.5 million robots
Selective distribution:
conceptual middle between exclusive and intensive distribution. -The control mechanism of selective distribution is the implied threat to take away the product from those resellers who do not follow your rules for your product. (ex. amazon)
Business to Consumer:
consumer types in a search engine a (impression)à consumer clicks on one of the first listings (click-through) a link takes consumer to listing's website à (conversion) à web transactionàbilled for the click (pay per click) Entrepreneur will be billed based on the number of clicks, but you should pay attention to the conversion rate too.
Business to Business:
consumer types in search engine à clicks on one of the 1st listings à link takes consumer to listing website à (conversion) à "landing page" attempts to gather info about potential customer à "lead" gets passed to sales rep à sales rep contacts "hot" leadà billed for the click (pay per click)
Customer adoption process
could be simple or complex, depending on nature of product/service. Understand where in the adoption process the customer is. Craft marketing activity to drive to the next phase. Strong personas allow to understand which stage you need to focus on.
Intensive distribution:
extreme opposite of exclusive, anyone who wants to carry your offering is encouraged to do so (ex. impulse purchases like candy or snacks, fad products) -No control mechanism
Exclusive distribution:
gives a retailer or other intermediary the exclusive right to sell your product in a defined area for a defined time period (ex. Anki Drive-exclusive distribution with Apple for 6 months.) You can sell the product easier with exclusivity. In most cases you can extract valuable benefits. You can take advantage of the reputation of the distribution partner, get reliable service from the exclusive distributor, more public exposure. -The control mechanism: contract -Typically, exclusivity is negotiated with either some payment in advance for it or some guaranteed minimum sales that the distributor will have to sell in order to retain the exclusivity.
creative mind:
have the most widely varied copies generated & evaluated. It is much more effective to separate the creative & media functions of ad agencies. It is worth spending $$ to try to find the exceptionally productive campaign!
Give it Away:
in today's internet world, giving away the product has become a long-term strategy, not just a short-term promotion-sales boost (freebies). Give it away promo as a long-term strategy builds customer relationships & is a creative business model creation
For entrepreneurial companies, the
incremental revenue produced by advertising IS worthwhile to measure, so try!
Freebies (Tchotchke):
key factors for a successful tchotchke are longevity, visibility, cleverness
Gurus:
key industry insiders, you have to build personal one-on-one relationships with gurus, it's a 2-way street, the guru can't be a guru without being in on the lasted product entries
Influencers:
key trade and business press, industry analysts, active in social network, have followers. Influencers are not just as targets for getting a message out, but highly knowledgeable users who can help improve the product or service. Influencer marketing is much more effective than traditional advertising or promotion.
Risk-t
rail program--give prospect a chance to see how the product will work and the benefits derived prior to fully committing
Apple App Store:
smartphone software apps are a unique, and extreme example of exclusive distribution. Gain access to 100's of millions of iOS owners, facilitates search & categorization of your app, Apple charges 30% of all app revenue for access to iOS market
Every 'entrepreneurial' marketing tactic should have a clear sense of Audience:
target profile of prospects Objective: in terms of customer adoption and repeat Call-to-action: specific action (calling, visiting a website, redeeming a coupon, purchasing, etc.) Measurable outcome: metric to measure success or failure
Retention Rate:
the proportion of customers you have retained at the end of a period out of your customer base in the beginning of the period (year) Retention Rate= # of retained customers/customer base
Customer life:
the total duration in years that the firm can serve L Years = 1/ (1-retention rate)
Customer Lifetime Value (CLV):
total $ contribution of a customer over the length of relationship with the firm. CLV= m * L - CAC where -m is the contribution margin generated from a customer in a year -L is the expected purchasing life of a customer -CAC is the customer acquisition cost
Free Forever:
users don't pay ex. Google search
Pricing--
you need to know the comparative framework of pricing. Demonstrate the total cost of product, implementation, training, and so on is comparable or cheaper than competitor.
BizCafe--pricing & profit
$ Gross margin= revenue-COGS %gross margin= $ gross margin/ revenue
Growth?
(one transaction) * N (price-unit costs) * N
How would you choose reps?
- first criterion is the rep's market position -second criterion is whether the rep will have enough resources and use them to push your product or service. It is always productive to invest some time and money to find the best rep.
Compensation: Matching incentives
--sales people do what they think will make them the most money for the time they spend at their jobs
Franchising
-1 in 10 businesses are franchises. -Business format franchise is the most popular form. The franchisor provides the franchisee with a name, identity, and a complete "proven" way of operating business. -Many entrepreneurial marketers have used franchising to accelerate their revenue growth. They are franchisors not franchisees.
PR Agencies:
-Creative- helping to define the message -Execution- getting the message out -Rolodex- knowing whom to go to and having the ability to get them to list -Measuring the effectiveness of PR is something that should be done in as quantitative a manner as possible.
Franchisor Advantages
-Enable rapid expansion without large investment -Collective buying power -Scale economies -Franchises are typically more motivated than employed managers -Franchisor can be profitable even though franchisees are not -Franchises are typically easier to sell than the equivalent business that is not a franchise
Rita's Water Ice
-Franchisees invested $135K-$242K to start a new Rita's for initial franchise fee, finding/leasing a site, store layout, working capital. -Rita's collected ongoing franchise & collective advertising fees by adding a charge of 9% of the gross sales for each gallon of Rita's mix. -Rita's found another target customer: the franchisee. Rita's opened in new areas, if successful they recruited franchisees -Rita's has a salesforce to close the franchise investment deal (like a B2B salesforce) -Rita's sold more than a business, they sold a lifestyle -Attempted to have franchisees perceive themselves as part of Rita's family -Positive word of mouth to attract new franchisees -Rob Tumolo held all of Rita's assets privately
Franchisor Disadvantages
-Limited control written explicitly on the franchise agreement -Can't fire bad franchisee who damages firms' image & positioning -Difficult to ensure franchisees pay the correct amount of ongoing fee and royalty -Different incentives for pricing. Franchisor cares more about revenue. Franchisee cares about profit. -You may be creating a new set of competitors that learn the business through your franchise.
Understanding of sales functions:
-Sales= N* x awareness x preference x affordability x availability -Sales= Market potential x market development x market share -Sales= trial sales + repeat sales -Sales= site visits x conversion rates N* is the maximum possible number of demand
Elevator Pitch
30 sec to 2 minutes, focus on your positioning in the most clear, compelling, and concise manner as possible.
Entrepreneurial Promotion?
Crowdfunding campaign give it away, viral marketing, event marketing, product placement. Be creative, be tested & adapted, be a long-term strategy, be consistent with positioning
Inbound lead generation
Direct inquiries on the phone or email for demo requests, requests for proposal (RFP) In MetricStream, 20% of the total leads were hot leads. But over 70% of the qualified opportunities came from these hot leads.
Case: Outback
Each store manager invests $25,000 in his or her store. They get 10% profits that store generations
How PR?
Enter business plan competition & leverage (ex. case: PayMyBills.com began as a project & gained 50,000 customers in less than a year or CSULB Innovation Challenge). Meet people & network. Be ready to give an elevator pitch anytime & anywhere. Focus on gurus (if high tech) and influencers. Or hire PR agency if nothing works.
Looking for the talent
Every employee from the founder down, must keep watch for any good talen and encourage those who qualify to apply, even when a specific job is not open.
Freemium:
Free users don't pay, paying users do pay. Many apps have basic VS premium version. ex. candy crush-entice users into increasing ability to win w/ small purchase
Viral Marketing:
Hotmail was a free email service that added the text "P.S. Get your free email at Hotmail" to the bottom of EVERY email. This is a give-it-away as well as viral. Grew more than 30 mil users, bought by Microsoft for $400 million Viral coefficient: # of new users who sign on each additional user or # of invited * conversion rate Ex. if each person invites 5 people & the conversion rate is 50%, the viral coefficient is 2.5 (=5 * 50%). Instagram has 2.5 viral coefficient. Ways to improve viral marketing: provide incentive to user and friend referred by user
As you begin your operations, experiment with the alternative sales processes You need to improve:
Improve success rate Shorten the sales cycle, and/or reduce activity cost
To fuel high growth:
Increase in number of employees Increase in assets Increase in sales units Increase in profit Improvement of business system
Marketing-enabled Sales strategy: MetricStream Inc.
Inorganic or paid lead-generation----->organic search traffic Find prospects Outbound lead generation Website conversion Social media interaction Customer videos Getting found by prospects Inbound lead generation Metricstream converted to a more organic search traffic which resulted customers easier to find MetricStream
Entrepreneurial Marketing Plan
Keep creating & increasing customer value 1. Product benefits 2. Service benefits 3. Brand benefits Be strategic 1. Targeting & positioning (you need to be able to explain why) 2. Competitive advantages Study Costs 1. Unit Cost 2. Fixed costs for start up 3. Marketing costs
Type of salesforce:
Low control: Reps, Resellers, and distributors High control: direct with salary
What is PR?
Managing the spread of information to public
Case: MetricStream
MetricStream is a market leader in enterprise-wide Governance, risk, and compliance (GRC) and Quality Management Solutions. In early 2013, MetricStream was growing. Their value proposition, target market segments, and positioning were defined/ MetricStream's focus was on growing sales but with a limited budget.
Social media
Monitor the sites, encourage happy customers to participate, and respond to negative feedback.
Email campaign
More than a one-shot-email Dont be a spammer Give recipient ability to subscribe/unsubscribe Address the recipient by name Make the email short and concise Always have a call to action Test it 10% each with: Different subject lines Different calls to actions Different content design
Website
Needs to be simple to navigate, enticing, and interesting/ Meaty--it contains information truly important to prospects Its content should be dynamic, changing content frequently Make it mobile friendly.
Why PR?
No $ required, can build a good impression as the "winner", help fund-raising
Compensation for New vs. Existing customer
Once the salesperson has gotten the territory to the point where her commissions generate a "good living," the sales person will tend to coast with her established accounts and protect them from any management gerrymandering.
Compensation
Pay little or nothing and combine with equity compensation. **avoid paying with equity as much as possible.
Marketing for financial activities Building a profile
Position the company as a winner, leader, most advanced world-class competitor in its space Create a sense of urgency Use crowdfunding Create an investor presentation Build a profile and share it with investors to get funding! Case: Flip Flop Shops
Define all the stages of the sales process
Propose the delivery vehicle Estimate the cost Estimate the success rate each actvitiy
Q: Before one begins business,which of the following is the most difficult estimate to obtain for each activity?
Prospects remaining Elapsed time Activity cost Answer is: A First things to do!
Ch. 9. Marketing-Enabled Sales
Pull vs Push Pull: pull and getting found Push: push and finding clients
Culture
Strong culture espouses the core values of the company in all aspects of the business and helps employees who make decisions consistent with the goals of the company. Culture is set by the founder (vision/mission)
Crowdfunding campaign case:
The Coolest Cooler Used Kickstarter campaign to raise target funding of $125,000. Failed the 1st time but succeeded raising over $13,000,000 non-dilutive in the 2nd campaign from more than 60,000 backers. Reason for success in 2nd campaign: 1. Clearer value proposition, "party in a box", focused on how the features enhance fun 2. Timing, commercial in August 3. Viral marketing: "please share this video now so we can make your coolest!"
Telling a compelling story
The focus of the story should be your customer and his/her problem. The main actor in the story is the customer. How? Facts, functions, features, and the basic commercial pitch are being rejected.
Qualifying & identifying prospects
The sooner prospects are qualified from the sales process, the better/ -fewer resources are consumed -less money is wasted, and -the more realistic the sales pipeline is Marketing needs to provide as clear and precise a definition as possible of the target prospect
Need financing:
To start (start-up equity investment), to survive (operating expenses) and to grow (scale-up investment) the venture.
Free Trials
User needs experience to value product! Many brokerage-only firms give first few trades free AOL gave out CDs for 10 free hours online. AOL knew conversation rate: 1%, customer life: 42 months, CLV: $400, Cost of CD: 75 cents. Giveaways work when low product cost, low switching cost, easy distribution, higher customer lifetime value (CLV) relative to customer acquisition cost (CAC)
Choosing the right talent
You should have the mission statement and position description clearly in mind. -integrity -customer orientation -passion and commitment -accountability, responsibility, trust teamwork, communication
strategic mind:
ad campaign should be supportive and consistent with your positioning strategy. Built with a clear sense of audience, objective, call to action, measurable outcome
scientific mind:
adaptive experimentation in advertising can provide large returns for modest investment. -ex. Synygy Inc. improved its advertising dramatically by testing alternative ads and choosing the best performer, rather than developing & committing to a single campaign.
Product placement:
advertising technique used by companies to subtly promote their products through a non-traditional advertising technique, usually through appearances in film, TV, other media
Case: Pebble Technology:
Angel Funding: Y Combinator $375,000-- (start-up fund) 1st crowdfunding (kickstarter campaign) $10.3 million--test and demonstrate market demand $15 million Series A round funding--to scale its sales and distribution. Continue R&D 2nd Crowdfunding(kickstarter campaign) $20 million---launch its next-generation product. To fund its working capital & create buzz.
Commission:
Based on sales revenue Based on gross margin or based on points.
Field Sales-oriented sales process:
1. New lead 2. Literature fulfillment 3. Quality prospect 4. Initial meeting 5. Follow-up call 6. Demonstration 7. Proposal 8. Additional follow-up 9. approval/purchase 10. Post-sale follow-up
Direct Salesforce:
1. Prospecting-identifying the right clients and opportunities 2. Cultivating--building strong relationship and uncovering client needs. 3. Positioning--demonstrating your value and develop proposal 4. Delivering--closing & post sale follow up
For a successful entrepreneurial ad, you need to have
1. Strategic Mind 2. Creative Mind 3. Scientific Mind
The three key items that fuel high growth are:
1. ideas 2. HR 3. Financial Resources
Managing Reps:
-What makes the rep tick? In general, reps allocate their time to maximize their commission income -Secondly, they also allocate their time if you (principal) have -similar goals -good communication -mutual trust & active involvement in the rep's activities
Handling objections
-if you company is a new or a small, a prospect might be concerned with the companys viability. Then show: Strength of the company: number of customers, financial investors
Getting found by prospects. How?
-online media presence -websites -Social medias, blogs -articles in online newspapers and magazines
What situation favor direct over rep?
-where its difficult to evaluate the salesperson's results "by the numbers" -where product and application knowledge are difficult to learn, important, and/or complex -with highly confidential information -where support activities are critical
Process of SEO
...
Who creates ad for entrepreneurs?
Ad agencies, freelance, advertising & marketing students at local university, local art students, employees, owner
Reps:
Agents, brokers, representatives: Reps are independent companies or individuals who sell your product offering on your behalf, usually do so on a commission basis, and bear all of their own sales expenses.
The importance of keep-track of Ad spending & sales
A better approach to campaign evaluation is using planned experiments. (ex. baseline week & testing week)
What is sales promotion in general?
A short-term tactic to boost sales, ex. free gift, free samples, discounted prices, coupon, BOGO
