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

1. Follow or Tweet: #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

4. Introduction
DEFINING THE FIELD

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

7. A Specialized Field
Our Focus
Marketing
Technology Start-ups

8. Part I
ANALYTICAL FOUNDATION

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?

10. “The Chasm”

11. Are you Disruptive?
Gain
Twilight
Zone
Pain

12. The Analytical Foundation
• SWOT Analysis
– Internal: Strength, Weakness
• Attributes
• Capabilities
• Assets
– External: Opportunity, Threat
• PEST Analysis (Macro)
• Industry Analysis (Intermediate)
• Market Analysis (Micro)

13. Part II
CRITICAL VALUE FACTORS

14. Target Customer
Ideal
80% of Ideal
60% of Ideal

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

17. Value Proposition

18. Part III
STRATEGIC MARKET APPROACH

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.

22. Partnering for Whole Product Solution
Partner
Potential
Expected
Extended
Core
Product

23. Distribution Model: Software

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)

27. Example: TiVo

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

31. Questions?