This document provides an overview of an introductory marketing lecture. It discusses key topics such as defining marketing and how it fits with business strategy, trendspotting, identifying market opportunities, innovation types, and creating customer value. The presentation emphasizes developing a value-driven strategy and positioning a product to meet primary customer benefits. It also covers segmentation, pricing, distribution partnerships, and lessons from successful marketing campaigns like ShamWow. The overall summary focuses on analyzing markets, understanding customer needs, and communicating clear product benefits.

1. Ideas to Income
An Introduction to Marketing (Lecture 2)
MaRS Entrepreneurship 101
January 20, 2010
Peter Evans
Advisor, MaRS Venture Group
pevans@marsdd.com
T: @Techmarketer
HP Garage, Silicon Valley

2. Why Marketing Matters
Definition and fit with strategy
© 2010 Peter M. Evans Slide 1

3. The Innovator’s Paradox
The problem with Ideas, Capabilities & Opportunities
© 2010 Peter M. Evans Slide 2

4. Trendspotting
© 2010 Peter M. Evans Slide 3

5. Market Opportunity
Size
Interactions
Scope
Landscape
Size
© 2010 Peter M. Evans Slide 4

6. Innovation Types
© 2010 Peter M. Evans Slide 5

7. Customer Value/Utility
© 2010 Peter M. Evans Slide 6

8. The Market Actualized Startup
What’s required for market success?
Sustainable
Engaged
Synchronized
Differentiated
Relevant
On-Trend
© 2010 Peter M. Evans Slide 7

9. TREND IS YOUR FRIEND
WHEN YOU LOOK AT THE MARKET IS THERE A WIND AT YOUR BACK ?
BE CAREFUL…EVEN TURKEYS CAN FLY IN A TORNADO…
© 2009 PETER EVANS

10. LESS COWBELL
IT’S TIME TO STOP ADDING “UNRECOVERABLE COSTS” TO MAKE PRODUCT
PERFORMANCE IMPROVEMENTS THAT CUSTOMERS WON’T PAY FOR…
© 2009 PETER EVANS

11. Homework Assignment
© 2010 Peter M. Evans Slide 10

12. Developing a Value Driven Strategy
The Most Important Equation You Should Remember
© 2010 Peter M. Evans Slide 11

13. Creating Buyer Utility
Stages & Utility Levers
Stages of the Buyer Experience Cycle
(1) (2) (3) (4) (5) (6) (7)
Eval./Trial/Reco. Purchase Delivery Use Supplements Maintenance Disposal
*
Customer
Productivity
Simplicity
Utility Levers
Convenience
Safety/Risk
Enterprise Server
Fun and
Image
Environmental
Friendliness
Social*
Responsibility
Source: Blue Ocean Strategy – Kim & Maubourgne * Indicates revision to model
© 2010 Peter M. Evans Slide 12

14. Developing a Value Driven Strategy
The Most Important Equation You Should Remember
© 2010 Peter M. Evans Slide 13

15. Pricing
Think before you set your price
 What’s your fundamental strategic model?
– Premium Price (Product Leadership)
– Lowest Price (Operational Excellence)
– Blended Model (Customer Intimacy)
 What is the Method for Capturing Revenues
– Product sales (Perpetual, Annual/Monthly Sub., One-Time Use)
– Licensing
– Advertising supported
– Brokering Transactions – Cost per acquisition etc.
 Some other Factors Need to be Considered
– What are the total costs? - professional services, sales engineers etc.
– Upfront payments or recurring revenues? (maintenance, upgrade revenue sources)
– Do partners need to be paid? - Sales Channel – Direct, Distributors, VARS
© 2010 Peter M. Evans Slide 14

16. How do you Make Money
Google Knows its Ratios
= Revenue
Users
x Queries x Ads x Clicks x Revenue
User
Query
Ads
Click
© 2010 Peter M. Evans Slide 15

17. Premium Price vs. Non. Consumption
Start with Identifying the REAL Determinants of Value
Functional Spec. = Get your Kid From A-B
$10
$1,200
Free?
© 2010 Peter M. Evans Slide 16

18. CONTRARIANS RULE
MARKET LEADERS WOULD SOONER ZIG THAN ZAG. THE KEY TO THE KINGDOM IS
TO DELIVER DIFFERENTIATE YET “UNEXPECTED VALUE” TO CUSTOMERS
© 2009 PETER EVANS

19. Notable Contrarians
An asymmetric collection of warriors and economists
Vilfredo Pareto Sun Tzu Noriaki Kano Bradley Gale
80/20 Asymmetric Unexpected Customer Value
Rules Warfare Value Design
© 2010 Peter M. Evans Slide 18

20. Case Study:
FAA Light Sport Aircraft Category
Weight
• Maximum gross takeoff weight of not more
than 1,320 pounds (600 kg) or
1,430 pounds (650 kg) for operation on
water
Airspeed
• Max. in level flight of 120 knots (220 km/h;
140 mph);
• Max. stall speed of 45 knots (83 km/h;
52 mph);
Seating
• Max. of 2 persons
Equipment
• Fixed undercarriage
• Fixed-pitch or ground adjustable propeller
• Single electric motor or reciprocating engine
© 2010 Peter M. Evans Slide 19

21. Why Now?
Are these favourable conditions for launching a new aviation venture?
✔ Political
✔ Economic
✔ Sociological
✔ Technology
Legal
✔Capital
© 2010 Peter M. Evans Slide 20

22. You have Competition
It comes in many forms
Direct
Indirect
Substitutes
Potential
Entrants
Non-Consumption
© 2010 Peter M. Evans Slide 21

24. Famous and Not So Famous Flops
Did these crossover products do anything really well?
Pontiac Aztec
RJ Reynolds’
Smokeless Cigarettes
Apple Pipin Microsoft WebTV
© 2010 Peter M. Evans Slide 23

26. Foldable

27. Floatable

28. Portable

29. Easy-to-Fly

30. Safer

31. Affordable
A5 Test Flight 2008

33. Lets go back to primary benefit?
How do you best achieve what the customer (really) wants?
Portable
Floatable
Roadable
Vertical
© 2010 Peter M. Evans Slide 32

34. What’s the Real Opportunity?
And how do you best achieve what the customer (really) wants
Necessary Unique Elements
Requirements
Driving Choice
High
Portable
Floatable
“Fits on a “Amphibiou
Trailer”
s Hull”
Degree of Not Relevant or
Distinctive
Unique Elements but
not Driving Choice
Relevance
Roadable
Vertical
“Drives on “No
Roads”
runway
required”
Low
Degree of
Differentiation
© 2010 Peter M. Evans Slide 33

35. Personal Aircraft
The Market Today
High
Low
Traditional Float Plane
Terrafugia Flying Car
ERRC Framework by Kim & Mauborgne (Blue Ocean Strategy)
Data here is for illustration purposes only and has not been validated
© Peter M. Evans Slide 34

36. A New Product Category
Icon Aircraft: Sample ERRC Grid
Eliminate Reduce
Which factors should be reduced well below the
industry’s standard?
 Facility Requirements  Training (Certification) Time
 Operating Cost
 Payload
 Range
Raise Create
Which factors should be raised well above the Which factors should be created that the
industry’s standard? industry has never offered?
 Performance (Maneuverability)  Driveway Storage
 Safety to Operate  Enhanced Ergonomics & Instrumentation
 Accessibility to Remote Regions  Winch & Tow Transportability
 Design Aesthetic
 Ease of Purchase
ERRC Framework by Kim & Mauborgne (Blue Ocean Strategy)
Data here is for illustration purposes only and has not been validated
© Peter M. Evans Slide 35

37. Personal Aircraft
Strategy Canvas
Eliminate Reduce Raise Create
High
Low
Traditional Float Plane
Terrafugia Flying Car
Icon A5
ERRC Framework by Kim & Mauborgne (Blue Ocean Strategy) Boat
Data here is for illustration purposes only and has not been validated
© 2010 Peter M. Evans Slide 36

38. Creating Buyer Utility
Stages & Utility Levers
Stages of the Buyer Experience Cycle
(1) (2) (3) (4) (5) (6) (7)
Eval./Trial/Reco. Purchase Delivery Use Supplements Maintenance Disposal
*
Customer
Productivity
Simplicity
Utility Levers
Convenience
Risk
Fun and
Image
Environmental
Friendliness
Social
Responsibility
* Indicates revision to model
© 2010 Peter M. Evans Slide 37

39. Segmentation Model (Example)
Customers cluster on key dimensions of value
© 2010 Peter M. Evans Slide 38

40. Customer Segmentation
Learn this slide!
 A Segment is a Sub-Set of Buyers:
– Within a market who share similar needs
– Demonstrate similar buyer behaviour
 Emphasis is on identifying clusters of buyers who are:
– Attractive
– Unattractive
– Non-addressable
 Good Segmentation Reveals Clusters that satisfy the following criteria:
1. Identifiable - The differentiating attributes of the segments must be measurable so that
they can be identified
2. Accessible - The segments must be reachable through communication and distribution
channels.
3. Substantial - The segments should be sufficiently large in order to justify the resources required
to target them
4. Unique Needs - To justify separate offerings, the segments must respond differently to
the different elements of the marketing mix
5. Durable - The segments should be relatively stable to minimize the cost of frequent product
changes
© 2010 Peter M. Evans Slide 39

41. Segment Scoring (Sample Template)
Developing a Objective Model to Find the Right Targets
Segment G
Segment D
Segment C
Segment A
Segment B
Segment E
Segment F
Market Size [$] $.6 B $1.2B $5.0 B $.16 B $1.5B $0.3B $0.2B
Value Chain Ownership 1 5 8 6 3 2 1
Market Potential $ $0.2B $75M $10M $35M $80M $15M $10M
Time to Market [years] 4 2 1 3 2 4 7
Barriers to entry [#] 6 2 2 5 4 3 9
Differentiation [#] 7 4 5 4 3 5 9
Competitive Threats [#] 2 2 2 4 7 4 2
Investment required [#] 6 5 3 7 9 5 9
© 2010 Peter M. Evans Slide 40

42. Marketing to B2B Buyers
Parinelli’s Influence & Authority Network
Functions Users What to ask:
 Salesperson What are you using for a system now?
 Clerical Staff How are you using it?
 Database Admin. Any serious problems?
 Call Center Sales/Support Who’s who in the org.?
Features Seymours What to ask:
 IT Manager What are the technical criteria?
 Marketing Manager How much? How long?
 Director How big?
How would you design the perfect solution
to this problem?
Benefits VITO’s What to ask:
 CEO/President What are the specific goals for your
organization over the next (quarter, year?)
 Executive Director (Assoc.)
What new markets is your organization
 Executive VP (Industry)
looking to grow in?
 COO/CFO/CMO
What are the criteria for establishing a
business relationship?
© 2010 Peter M. Evans Slide 41

43. Sir. James Dyson
(1986)
Dr. Helen Greiner
James Spangler (2002)
Hoover (1908)
© 2010 Peter M. Evans Slide 42

44. Positioning Aligned with Primary Benefit
New Growth in a Mature Category Requires Focus
= Automation
Trade Off: May miss the tight
corners
= Performance
Trade Off: Doesn’t clean the house
automatically
= Portability
Trade Off: Performance
© 2010 Peter M. Evans Slide 43

45. Simplicity of Function & Design
Marissa Mayer
VP of Search
Products & User
Experience, Google
"Google has the functionality of a really
complicated Swiss Army knife, but the home
page is our way of approaching it closed.
It's simple, it's elegant, you can slip it in
your pocket, but it's got the great doodad
when you need it. A lot of our competitors
are like a Swiss Army knife open--and that
can be intimidating and occasionally
harmful."
© 2010 Peter M. Evans Slide 44

46. Google: Simplicity Sells
The importance of a focused product
Google Yahoo!
66%
Search Market Share
vs. 17%
Search Market Share
comScore Nov. 2009 Estimates
© 2010 Peter M. Evans Slide 45

47. Sustainable
Credible
Engaged
Synchronized
Differentiated
Relevant
On-Trend
© 2010 Peter M. Evans Slide 46

48. iSYNCHRONIZE
WHAT RESEARCH, SUPPLY AND DISTRIBUTION PARTNERSHIPS GIVE
YOU AN UNFAIR ADVANTAGE IN THE MARKET?
© 2009 PETER EVANS
© 2010 Peter M. Evans Slide 47

49. Customers want Whole Products
How will you build, buy, partner and connect to be a synchronizer?
Consulting
Hardware
Post-sales
Service & Software
Support
The
Complementary Complementary
Services
Core Products
Pre-sales Product
Services
Peripherals
Legacy
Connectivity
Interfaces
Source: Chasm Group
© 2010 Peter M. Evans Slide 48

50. CONVERSUATION
WHAT IS THE ONE KEY THING YOU ARE GOOD AT?
REMEMBER: CLEAR BENEFIT + DRAMATIC DIFFERENCE + REASONS TO BELIEVE & U Value
© 2009 PETER EVANS

52. Key Lessons from ShamWow
Can you can’t argue with success
Clear Benefits
Utility Driver 1: Absorbency (Acts like a vacuum..works twice as hard)
Utility Driver 2: More Uses (Doesn’t Disintegrate like paper towels)
Utility Driver 3: Reusable (Can wash and reuse)
Dramatic Difference
• Functional: Holds 12x it’s weight in liquid = Get More Done
• Financial: 10x Cheaper (Assumes Paper Towels $20/Mo.?) = Save Money
Reasons to Believe
• Personification: “Hi it’s Vince”
• Tone: Smooth talking condescension
• Visuals: Product demos – see it in action
• Authenticity: Association with German quality
• No Financial Risk: Money-back guarantee
• Exclusive Offer: Use of scarcity of supply (“call now” tactics)
Unexpected Value
• Extra set of towels free (call within 20 min.)
• Free ShamWow mop (supplies are limited)
© 2010 Peter M. Evans Slide 51

53. Engagement: A 360-Degree Exercise
The way we were
PR &
Investor Advertising
Relations
Promotional Behaviour
Materials
Physical People
Environments
Brand
Corporate &
Investor Products
Communications
Customer
Trade Shows Service &
& Events Support
Online Identity/
Presence Logos
Source: Interbrand
© 2010 Peter M. Evans Slide 52

54. © 2010 Peter M. Evans Slide 53

55. Think about Visual Thinking
It pays to “Disnify” your solution to engage visual thinkers
 Process Driven Visualization
– Forces a disciplined approach to
mapping the value proposition in a
sequential/parallel process-driven
way (i.e. Diagram by XPLANE)
 Benefits
– Taps in to the high percentage of
visual thinkers
– Mitigates the compressed
timeframes people have to learn
– Great for VITO’s (many are big
picture people)
– Creates a richer story for analysts
and media
© 2010 Peter M. Evans Slide 54

56. What is your Product?
Example of a Core Platform (Infrastructure) - “Disnified”
© 2010 Peter M. Evans Slide 55

57. What Does it do?
Functionality - “Disnified”
© 2010 Peter M. Evans Slide 56

58. Visual Thinking Works Everywhere
Even SEC filings ought to be in pictures
NASDAQ: F-1 Filing Prospectus
© 2010 Peter M. Evans Slide 57

59. Sustainable
Engaged
Synchronized
Differentiated
Relevant
On-Trend
© 2010 Peter M. Evans Slide 58

60. The Value Creation Cycle
Category: Online Search/Advertising
3. Sustain 1. Create
Search Technology
Market
Value
2. Capture
© 2010 Peter M. Evans Slide 59

61. The Value Creation Cycle
Category: Recorded Music
3. Sustain 1. Create
MP3 Standard
Market
Value
2. Capture
© 2010 Peter M. Evans Slide 60

62. The Value Creation Cycle
Category: CRM Software (ASP Model)
3. Sustain 1. Create
CRM Platform (ASP)
Market
Value
2. Capture
© 2010 Peter M. Evans Slide 61

63. Fail Tales
From blunders to boo-yas!
V1.0 = Fail
V2.0 = Boo-Ya!
2007
1995
1983 1993
1993
2007
© 2010 Peter M. Evans Slide 62

64. How Markets Adopt Technology
How markets move and your position changes with it
Customer Goal:
Competitive Solve Problem
Adopt Obvious
Extend Paradigm
Advantage
Customer Need:
Potential of Complete Solution
Safe Choice
Better Value
Technology
Vendor Goal:
Validate Technology
Segment Share
Market Share
Profitability
Strategy:
Demo the Technology
Show ROI
Gorilla Power!
Segment Focus
Skills:
Technology Proficiency
Customer Intimacy
Closing Deals
Relationship Mgmt.
“The Chasm Companion” Paul Wiefels “Crossing the Chasm” by Geoffrey Moore
© 2010 Peter M. Evans Slide 63

65. Sustaining your Market Position
The Teeth Whitening Market: A Case Study in Value Migration
_____
Teeth Whitening Market: Channel Options
High
Professional
Multi-Level
Retail Kiosk
Cost
Retail Store
Low
Convenience High
© 2010 Peter M. Evans Slide 64

66. Connecting your Ideas to Income
Think Big Picture ….But get out there and build something!*
• Go beyond products
Set a course for market • Use multiple innovation types
success • Engage the whole org.
• Study customers & non-customers
Look to the edges for the • Identify changing trends
best ideas • Look for converging trends
Build fewer, bolder • Focus on massive shifts in buyer utility
• Solve big problems vs. incremental improvements
concepts
• Focus on Prototypes (not just analysis)
Commit to • Remember the importance of failure
implementing quickly • Build with cross-functional teams
• Identify quick victories
• Celebrate collective success
* Inspired by Larry Keeley, Doblin Group (Division of Monitor)
© 2010 Peter M. Evans Slide 65

67. Thank You
Peter Evans,
Advisor, MaRS Venture Group
E pevans@marsdd.com
T: @techmarketer