Stephen Lawrence Leeds School of Business University of Colorado Boulder, Colorado 1 ESSAM 2011

 How competitive is our industry?  Where do we fit in the global value chain?  What do we need to know about our target customers?  How should we segment our customers?  How should we distribute to our customers?  What is our target market?  How will we communicate with our customers?  What are symptoms of poor marketing?  Who are our competitors?  What barriers to entry can we erect?

 Industry: “Group of sellers that offer product/services that are similar and close substitutes for one another.”  Market: “group of current and potential customers having the willingness and ability to buy product/services to satisfy a need.” 3

Power of Suppliers Power of Customers Ease of Substitution Barriers to Entry Industry Industry Rivalry Five Forces Model Michael Porter

5 VendorsCustomersOur Firm

 Current numbers  Future trends  Demographics ◦ Age, gender, location, …  Psychographics ◦ Interests, opinion, activities 6

 What groupings & subdivisions make sense?  Geography  Demographics  Psychographics  Culture  Product attributes ◦ Features, benefits, prices  Distribution channels  Sector – industrial, consumer, government  Objective is to identify your entry point 7

 Who actually does the selling?  Direct sales  Manufacturers representatives  Retailers  Distributors  Wholesalers  Dealers  Internet  System integrators  Original equipment manufacturer (OEM) 8

 Combination of ◦ Customer type(s) ◦ Market segment(s) ◦ Distribution channel(s)  Attributes of a good target market ◦ Easily identified and addressed ◦ Similar messaging to all within the target ◦ Similar channels of distribution ◦ Similar purchasing habits and frequency  Three critical questions ◦ Is the market large enough to support multiple competitors? ◦ What are predictions for short term growth? ◦ What are predictions for longer term growth? 9

 How will target market find us? Us them?  Advertising (fliers, print, radio, TV, …)  Internet search  Public relations  Direct selling  Trade shows & conferences  Through trusted intermediaries  Blogs, social networking  Get creative!

 Sales are driven mostly by price  Products indistinguishable from competition  Disconnected sales gimmicks  Marketing messages not unified  Sales leads only from sales staff  Customers unaware of product line breadth  No customer or prospect database Levinson, Guerrilla Marketing, 3 rd edition, 1998.

Attribute 1 Attribute 2 You Competitor 2 Competitor 3 Competitor 1

 Economies of scale ◦ Manufacturing, marketing, technological  Customer loyalty ◦ Well established brands, long established relationships  Agreements with customers, suppliers, strategic partners  Control of the distribution channel  Create switching costs  High initial capital requirements  Access to distribution channels ◦ Exclusive distribution agreements  Intellectual property ◦ Patents, trade secrets, copyrights, trademarks, know-how  Government regulations ◦ Defense contracts, import restrictions  Brand recognition and loyalty  Innovate faster than the competition! 13

 Undertake an industry analysis  Identify your target market ◦ Why this one?  Explain how you will communicate with your target market. Why?

Stephen Lawrence Leeds School of Business University of Colorado Boulder, Colorado 15 ESSAM 2009