MKTG 143 ORALS
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MKTG 143 ORALS - Leaderboard
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| Entrepreneur | An owner of a business who invests his/her resources to bring an idea to life, setting the direction that transforms that idea into reality, thus providing and gaining value that balances effort, purpose, and profit An entrepreneur creates an enterprise that is innovative, value-creating, and potentially paradigm-shifting. They dare to challenge the way things are done via new products, services, technologies, and markets. They are excited by the prospect of changing the world around them. |
| The Complete Entrepreneur Model | This model discusses the various roles that a complete entrepreneur has to fulfill. The Complete Entrepreneur Model is envisioned as a triangle that includes all the roles an entrepreneur has to play. |
| Opportunity | An Opportunity is a favorable set of circumstances that create a need for a new product, service, or business The key to opportunity recognition is to identify a product or service that people need and are willing to buy, not one that an entrepreneur wants to make and sell. Some might seem like good ideas, yet turned into failures in the marketplace. Note how many of them did so because they failed to address a real market opportunity. An Opportunity is characterized by four essential qualities. It is: 1. Anchored in a product, service, or business that creates or adds value for its buyer or end-user 2. Attractive 3. Timely 4. Durable |
| Voice of the Enterprise | This refers to identifying new opportunities based on the needs and possibilities of the entrepreneur or his/her own company. Entrepreneurs can identify opportunities by looking inwardly, and seeking possibilities in: - Products that are similar or related to what the business offers. - Capitalizing on the distribution channels that the business is strong in. - Geographical locations that the business already has a strong presence in or makes synergistic sense to expand into. - Processes that the business can leverage. |
| Voice of the Market | This refers to identifying opportunities by capturing the changing needs of consumers. This can be done through three general ways: 1. Observing Trends 2. Solving a Problem 3. Finding Gaps in the Marketplace |
| Trends | Trends are general directions in which something is developing or changing. Observing trends could indicate to the entrepreneur many opportunities that one can pursue. The key is to look at these factors, and analyzing them, be able to find business, product, or service gaps: differences between what is available, and what is possible. This then can give rise to a new business, product, or service idea for the entrepreneur. There are five categories of trends to observe, often referred to as the STEEP factors. These are: - Socio-Cultural Factors - Technological Factors - Economic Factors - Environmental Factors - Political Factors * It is best to build a business based on trends, which have a much longer life-span than a fad. |
| Porter's Generic Competitive Business Strategies | Michael Porter posits that an organization must decide on how it will compete against other companies’ offerings in the same marketplace. He says that an organization has three basic strategic options. These are: - Cost Leadership - Differentiation - Focus |
| Cost Leadership | Establishing a competitive advantage by having the lowest cost of operation in the industry. This strategy can be specially effective when: - Price competition among rival sellers is especially vigorous. - Products of rival sellers are essentially identical and supplies are readily available from any of several eager sellers - There are few ways to achieve product differentiation that have value to buyers - Most buyers use the product in the same ways - Buyers incur low costs in switching their purchases from one seller to another - Buyers are large and have significant power to bargain down prices Industry newcomers use introductory low prices to attract buyers and build a customer base. A refinement to the concept of Cost Leadership is that we now consider two versions of cost leadership, which an organization may choose to employ, as follows: Overall Cost Leadership Strategy: offering products or services at the absolute lowest price available in the market. Best Value Strategy: offering products or services at the best price-value on the market. |
| Differentiation | Strategy that aims to distinguish a product/service from other similar products in the market. Differentiation strategy is most applicable when: - There are many ways to differentiate the product or service and many buyers perceive these differences as having value. - The buyer’s needs and uses are diverse. Few rival firms are following a similar differentiation approach. - Technological change is fast paced and competition revolves around rapidly evolving product features. |
| Focus | Method of developing, marketing, and selling products to a niche market A Focus strategy is most attractive when: - The target market niche is large, profitable, and growing - Industry leaders do not consider the niche to be crucial to their own success. - Industry leaders consider it too costly or difficult to meet the specialized needs of the target market niche while taking care of their mainstream customers. - The industry has many different niches and segments, thereby allowing a focuser to pick a competitively attractive niche suited to its own resources. - Few, if any, other rivals are attempting to specialize in the same target segment. |
| Opportunity Screening: The R-W-W Screen | Having identified many more possible opportunities than one can pursue, one has to assess and screen opportunities and ideas, until one is able to identify that one opportunity that he/she will devote his/her self and resources. R-W-W Screen - Is the opportunity Real? Will consumers really want the product/service? Will they be willing to pay for it? Is there a clear product concept and will it satisfy the market? Do I have the resources to pursue this opportunity? - Can I Win in the marketplace? Does the opportunity offer a sustainable competitive advantage over competitors and alternatives? Do I have, or can I raise, the resources to make such a business a success? - Is it Worth doing? Does the opportunity fit my overall personal goals and strategies? Does it offer sufficient profit potential to make it worth the effort and risk for me? |
| Context Map Canvas | A framework to help you understand the context of your potential venture. Use this template to map out the trends with your team, and share different perspectives. It will help you to look for drivers outside your company and recognize the forces that will shape your business now and in the future. The Context Map Canvas helps you and your team expand your thinking beyond the boundaries of your product and organization, to fully understand what’s going on in the world around you and what’s changing that will affect your business in the future. Parts: Demographic Trends Rules & Regulations Economy & Environment Competition Technology Trends Customer Needs Uncertainties |
| Customer Development | Customer development is the formal process of identifying potential customers and figuring out how to meet their need. Many startups spend too much time on their product or service, which is important too, but not more so than the needs of their target audience. A successful startup needs to create a business plan that satisfies their target market and establishes themselves as useful and unique in the marketplace. Customer development is a process that can be used to discover, test and validate many business assumptions. These assumptions include whether a product solves a problem for a specific group of users, if the market is large enough to support such a product, and whether or not the business can scale to meet demands. Key points of Customer Development: 1. Customer Development minimizes the risk of failure - Although there is a lot of time spent talking about failure in the first two steps of the process, Customer Development actually minimizes the risks associated with failure. - It is easier to fail a product and re-develop it before it hits the market. Selling to new customers is hard enough without having to re-sell a product that failed publicly. 2. You need to understand the market you are in. - Understanding the market that you are in grows in importance with every step of the process. - You need to find the minimum feature set that you need to gain early customers. - Avoid spectacular failures in execution by learning before you launch and not after |
| Customer Discovery | First step of the Four Step Framework. This step is for teams to figure out exactly who their customers are and it is not about determining the features of a product or testing the product on focus groups. The customer discovery phase is all about the vision behind the product. You need to develop a full understanding of the problem that the product solves. This vision is more emotional than practical. This is where people can envision themselves using the product to solve the problem, not where customers can picture themselves enjoying certain features. The problem is the real point of departure for customer discovery. |
| Customer Validation | Second step of the Four Step Framework. This step is designed to help you create the map that you need to reach those customers. The unique aspect of the customer validation process in the Customer Development model is that if it doesn’t work, the team must start over again with customer discovery. Iteration is actually built into the model. |
| Customer Creation | Third step of the Four Step Framework. This step acknowledges that not all businesses enter similar markets. Four primary types of startup markets: - Some businesses enter markets that are pre-existing. - Some businesses enter markets that are completely new. - Some businesses enter the existing market as a low cost alternative. - Some businesses aim to carve a new segment in an existing market as a niche. Customer Creation encourages businesses to avoid over-spending on marketing until after the first customers are already acquired. This prevents teams from continuing to spend on markets and customers that do not exist and cannot be created. |
| Company Building | Four step of the Four Step Framework .This step signals the transition from an informal learning experience into a fully-fledged department that works to formally take advantage of any early success the company has had in its market. This is also the part of the process when the business can begin to spend more money on marketing and driving customer sales. It is important that this scaling happens at the end of the process because premature spending can put the company in a vulnerable financial position. If the development team starts spending huge amounts of money on customers they haven’t identified yet, it will struggle to keep up financially and physically if and when business does pick up. |
| Timmons Model | This model highlights the essential components in the entrepreneurial process: 1. Opportunity Evaluation 2. Resource Marshalling 3. Entrepreneurial Team Formation The model thus identifies three controllable components of the entrepreneurial process that can be assessed, influenced, shaped and altered. The three components are the opportunity, the resources, and the team. |
| Opportunity Evaluation | The entrepreneurial process begins with more than an idea; it requires an opportunity. How do you distinguish mere ideas from opportunities? One system for identifying bona fide opportunities (an not ideas) is The Three Ms: 1. Market Demand 2. Market Size and Structure, 3. Margin Analysis. |
| Market Demand | Market Demand is the quantity of a good that consumers are willing and able to purchase at various prices during a period of time. Market Demand key factor in assessing opportunity. There are many ways to gauge market demand; start with market share and growth potential. Companies that grow, succeed. Understanding the nature of market demand requires identifying the target audience. Shaping existing demand into a steeply inclined demand curve creates an attractive entrepreneurial environment. Growth separates an entrepreneurial business from a small business. Another aspect of market demand to consider is the durability of the product to enable a sound return. The amount and nature of return is a market function. What return do the capital providers (e.g. stockholders, investors, creditors, etc.) require? Another factor of market demand is customer reachability: Are the channels of distribution established or projected? What is the access to these channels or the costs to establish them? Finally, how will the customer perceive the price-value relationship? For example, computer programs and other productivity applications help customers complete tasks in a drastically reduced amount of time. This time-saving value may, in turn, win them new clients and revenues. That’s value creation. |
| Market Size and Structure | Market Size Structure refers to the distribution of shares of different size classes of local market participants. There are three important questions to consider when gauging market size and structure: 1. Is the market emerging and/or fragmented**? In other words, envision the big picture of an industry lifecycle. A fragmented market that can be consolidated around a superior product or service is rich entrepreneurial territory. For example, prior to the emergence of Jiffy Lube in the U.S., the concept of an oil change was the domain of small, full-service gas stations. The founders of Jiffy Lube identified the unmet need of fast, on-demand oil changes, which quickly evolved into a new market for automotive preventive maintenance for busy consumers. 2. Are there proprietary barriers to entry or excessive costs of exit? Even in a potentially fruitful market, there may be little opportunity if the field is dominated by a few competitors who control intellectual property or other key ingredients needed for the product. Clearly, the allure of technology companies is the competitive advantage provided by patents or technological secrets. No venture is a sure thing, but a close examination of the market size and structure will help minimize risk. 3. What is the stage of the product lifecycle? Look at the product on the lifecycle curve. The high-growth stage represents the greatest potential for success, as well as the lowest risk. Of course, that doesn’t mean that money can’t be made on other parts of this curve. Many entrepreneurs have discovered opportunities by mining emerging or mature markets for hidden potential. |
| Margin Analysis | Margin Analysis is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity. Margin analysis is key to differentiating ideas from opportunities. Analyze the idea to identify the strengths of the venture. After pinpointing those strengths, ask, “What are the financial manifestations of those competitive advantages?” In other words, if the service is best, what will be the result? If fixed costs are low, how will that manifest? Are the gross margins reasonable and comparable to others in the industry? When will the venture break even? An ideal break-even point is one to two years. Finally, if the opportunity is to be implemented within a corporate organization, what is the value added to the overall corporate price-earnings ratio? That is, will the new venture’s launch affect the markets’ perception of the entire corporate price-earnings ratio? |
| Resource Marshalling | Resource Marshalling is the process of controlling ones resources for maximum benefit. After assessing an opportunity, resources are required to get started. It is important to minimize and control resources rather than maximizing and owning them. Entrepreneurs are highly creative in how they exploit and maximize their resources; this is often termed “bootstrapping”. Entrepreneurs must not be consumed by the need for cash because cash is often unavailable. How, then, do you start something with nothing? Entrepreneurs find a way… Conventional thinking about resource marshalling is very cash-oriented, and the scarcity of cash in a new venture will often inhibit the risk-averse investor. To offset this potential for investor skepticism, as well as to decrease dependence on predictable cashflow, consider creative resource marshalling, such as: - Leasing equipment and property instead of burning through cash by purchasing everything. - Recruiting employees on a variable cost or incentive basis. Alternatively, many entrepreneurial firms conserve cash by offering equity to attract employees. - Negotiate the longest terms possible from suppliers to be able to use incoming cash from sales to pay them. Understand and use your resources; don’t be driven by them. |
| Entrepreneurial Team Formation | Forming the team of strong entrepreneurs for the success of the venture. Developing a strong entrepreneurial team requires understanding the nature and extent of the opportunity and matching those characteristics with human resources. The attributes of a strong entrepreneurial mindset are similar for both leader and team, and include the willingness to tolerate risk and inspire creativity. The quality of the entrepreneurial team is a key to a venture’s success. It is very rare for an entrepreneur to build a high-growth venture solo. The entrepreneurial team can successfully fill competency and experience gaps to assist the venture in raising capital and successfully navigating the challenges inherent in fast-growing ventures. The most successful entrepreneurs are experienced in the field; tolerant of risk, ambiguity and uncertainty; motivated to excel; committed and determined; creative; adaptable; and possess leadership and communication skills. The lead entrepreneur is the key to attracting a management team capable of moving the venture to the next level. |
| The Lean Startup | Paradigms and processes by which startup entrepreneurs can continually develop winning products and services faster, without wasting too much resources. The Lean Startup avoids wasted effort by building preliminary products and presenting them to target customers to measure their behavior. Addresses the Core Question: How can I build an innovative product without wasting a bunch of time and effort? Steps in the Lean Startup Method: 1. Create a Vision - Write out a brief, high-level description of your product or service. 2. Identify Critical Assumptions - Ask yourself: “What value assumptions have I made, which if wrong, would result in a significant amount of wasted time and effort?” 3. Build MVPs to Test Critical Assumptions - An MVP is a lean version of your final product, but is still functional and valuable to customers. 4. Release MVP and Measure Behavior - Once MVP is built with enough functionality to test critical assumptions, its time to release to a small segment of potential customers. After, evaluate key metrics to validate your product. 5. Pivot or persevere - make tweaks to MVP to get desired customer behavior |
| Concept Testing | This is done when a product/service idea is finally developed to a point where its benefits can be communicated to target consumers in order to assess their reactions. Concept testing is a quality check between the description of an idea and actual product development. A variety of approaches are available for concept testing. All methods involve a group of potential consumers rating one or more concept statements in which each concept is presented with specific focus on consumer needs or benefits. Consumers are presented with a stimulus (the concept) and measures of reaction are taken which the researcher believes are predictive of the behavioral response, such as eventual purchase Purposes of practical concept testing: - to develop the original idea further - to estimate the concept's market potential - to eliminate poor concept(s) - to identify the value of concept features - to help identify the highest potential customer segment(s) - to generate an estimate of sales or trial rate |
| Concept Stimuli Design | Concepts can be presented in many forms, from a simple factual statement with minimum description of the product's attributes, to a commercialized concept making persuasive claims, or even to a full mock advertisement. Whatever the final result of the design looks like, the concept statement should be clear and realistic and should not oversell the concept |
| Measuring Customer Response | Up-to-date and constant contact with customers and participants provides an excellent source of information and can act as a check to see if your ideas are working in the way they are supposed to. One way to do this is to use a questionnaire, or a discussion guide. |
| The Minimum Viable Product (MVP) Approach | The MVP is a product with enough features for garnering validated learning about the product and its continuous development. The MVP is the most basic version of the product you want to launch in the market. These products are then tested with customers, the results of which are measured to yield data. This data is then mined so the entrepreneur may learn and develop new ideas which in turn will feed the cycle over and over again. The goal of the startup entrepreneur is to speed up the process of the feedback loop (Build-Measure-Learn), he/she needs to build and measure faster so they may learn faster. In exposing test products to the market, you want to gauge the response from the buyer’s perspective. By applying this method, you can make your product much better before its final launch. You will get to know about its strengths or weaknesses, so that you can improve it according to their desires before the launch of the final product. |
| Validated Leaning | When testing your MVPs, you are essentially starting out with a hypothesis about your customers, their problems, need and wants, and then the solution you are offering. Obviously you need to talk to people to confirm or reject your assumptions. One way to keep track of your research and the way your findings influence your hypothesis is to use a Validation Board. On this board you start out with your first hypothesis, you list your major assumptions, and then you determine your research strategy to validate your assumptions. You then proceed to test and validate those assumptions. As a result of your validation, your hypothesis on customer, problem and solution may eventually be adjusted. When this happens, we call it a pivot. When you keep track of your pivots, it is easy to illustrate your learning experience and convince yourself about the validity of your value proposition. |
| Strategic Management | The art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives. It focuses on integrating an organization's individual operating areas (marketing, finance and accounting, human resources, operations, research and development, and information systems) to achieve success. The purpose of strategic management is to ensure that the organization finds and maintains competitive advantage, and knows the opportunities it can exploit in the future. Ultimately, Strategic Management is all about gaining and maintaining Competitive Advantage which can be defined as: - any activity a firm does better than its rival firms, OR - any resource a firm possesses that rival firms desire The discipline and process of strategic management is critical in achieving this for an organization. |
| Strategic Plan | A strategic plan is, in essence, a company’s game plan to compete successfully. A strategic plan results from management making deliberate choices among many alternatives, all of which could be good and attractive. In making those choices, the organization commits to specific markets, policies, procedures, and operations. |
| Strategic Management Framework | The strategic management process, critical to achieving success in business, begins with Strategy Formulation but has to be followed through with good Strategy Implementation, then consistently monitored and course-corrected by sound Strategy Evaluation. |
| Strategy Formulation | As an organization’s strategic plan is basically its game plan. Strategy Formulation could include making many types of decisions such as: - What new businesses to enter - What businesses to abandon - Whether to expand operations or diversify - Whether to enter international markets - Whether to merge or form a joint venture - How to avoid a hostile takeover To formulate a strategic plan, an organization takes the following steps: - developing a vision and mission - identifying an organization’s external opportunities and threats - determining internal strengths and weaknesses - establishing long-term objectives - generating alternative strategies, then - choosing particular strategies to pursue |
| Strategy Implementation | In the Strategy Implementation stage, the organization takes the strategic plan and operationalizes it. This is often called the action stage. Here, the organization should: - establish annual objectives - devise organizational policies - motivate employees - allocate resources Strategy implementation therefore includes developing a strategy-supportive culture, creating an effective organizational structure, redirecting marketing efforts, preparing budgets, developing and using information systems, and linking employee compensation to organizational performance. |
| Strategy Evaluation | Strategy Evaluation is how the organization determines which strategies are working well, and which are not. All strategies are subject to modification because external and internal factors constantly change. Strategy evaluation involves three fundamental activities: 1. Reviewing external and internal factors that are the bases for current strategies 2. Measuring performance 3. Making corrective actions |
| Vision and Mission Statements | Vision and Mission Statements encapsulate its overall direction and reason for being. It sets for an organization what it dreams of and aims for (and in doing so, implicitly states what it does not), what it does as a business (and what it does not), and how it does what it does (and how not). As such, it serves as an organization’s “true north.” -A Vision Statement answers the basic question: "What do we want to become?” - A Mission Statement is a declaration of an organization’s “reason for being.” It answers the question: “What is our business?” Taken together, the vision and mission statements reveal what an organization wants to be and achieve, whom it wants to serve, what business it is in, and how it conducts its business. As it establishes all these “true north” elements for an organization, the vision and mission statements become essential for effectively establishing objectives and formulating strategies. |
| Business Model Canvas (BMC) | The Business Model Canvas (BMC) is a strategic tool that helps you to understand the different components necessary for your enterprise to take off. It illustrates what a business does, for and with whom, the resources it needs to do that and how money flows in and out of the business. Your business model essentially covers 4 areas: Customer, Offers, Infrastructure, and Financial Viability. There are 9 building blocks that make up the BMC: Customer Segments, Value Propositions, Customer Relationships, Channels, Revenue Streams, Cost Structure, Key Partners, Key Resources, and Key Activities. These building blocks can be used to develop opportunities and ideas into new business models. The following video series demonstrates how the BMC may be used in enterprise development: The BMC not only allows you to visually represent your business model in one-page, it also allows you to conceptually experiment with different business models by varying the contents of each box. |
| Value Proposition Canvas (VMC) | Value Proposition Design is about achieving product-market fit. In this vision of value-based innovation, products and services only have value to the degree they assist in helping people get their job(s) done. Your goal is to develop relevant and realistic value propositions for your target market. The Value Proposition Canvas (VPC) is a necessary tool in building your Business Model Canvas (BMC). It can help you to: - Precisely define your customer profiles: Identify your customer's major Jobs-to-be-done, the Pains they face when trying to accomplish their Jobs-to-be-done and the Gains they perceive by getting their jobs done. - Visualize the value you create: Define the most important components of your offering, how you relieve pain and create gains for your customers. - Achieve Product-Market fit: Adjust your Value Proposition based on the insights you learned from customer evidence and achieve Product-Market fit. The VPC is actually an expansion of the BMC's Value Proposition and Customer Segments portions. |
| Product Design | Product Design is the Connection of Materials and Technology. Product design transforms ideas into real products. It combines design + science into products and concepts that improve everyday life. Properly designing your product means identifying a market opportunity, clearly defining the problem, developing a proper solution for that problem and validating the solution with real users. Great product design leads to brand loyalty and repeat business. For consumers, it means frustration-free, intuitive , and efficient experiences, and more. |