1. Entrepreneurial Marketing: An Effectual Approach
Prof. Dr. E.J. Nijssen,
Eindhoven University of Technology
Available from Routledge at:
Session 11: Review

2. Basic concept underlying the course
Difference between startup and large corporation
Execute business model
Search for business model
Transition process
Large corporation (>100 mio $)
Start up
Vision, faith
(assumptions)
Facts
(validation)
Repetition
(exploitation, expansion)
(Blank 2007)

3. Basic concept underlying the course
Execute business model
Search for business model
Transition process
Large corporation (>100 mio $)
Start up
Execute:
–Current customers/market
–Known features
–Proven business model and sales model
–unknown customer
–unknown features
So search for:
–Product/market fit
–Scalable business model
–Repeatable sales model
(Blank 2007)

4. Basic concept underlying the course
Execute business model
Search for business model
Transition process
Large corporation (>100 mio $)
Start up
Traditional accounting:
–Cash flow
–Balance sheet
–Income statement
–Break even
–Profits per customer
Measures:
–Customer acquisition cost
–Viral coefficient
–Average selling price/order size
–Monthly burn rate
(Blank 2007)

5. Basic concept underlying the course
Execute business model
Transition process
Search for business model
Large corporation (>100 mio $)
Start up
Sales:
–Large sales organization
–Marketing support/dept.
–Scalable
–Price list/data sheets
–Revenue plan
Customer validation process:
–Early adopters/venturous customers
–Minimal feature set
–Experimenting/iterations
–Agile development
–Lack of price list
(Blank 2007)

6. Proposed solution
More start-ups fail because of lack of customers than from failure of product development
Focusing customer development
Develop and test hypotheses
Use systematic and scientific approach/cocnepts
Link with business model idea
Make customer development separate process, tasks, and team

7. Entrepreneurial marketing in 9 key concepts
Effectual marketing
Serial entrepreneurs like bowling
Mapping new technologies in the marketplace
Crossing the chasm
Building and validating assumptions
Customer development process
Marketing levers to translate value proposition
The sales learning curve
M/S capabilities for growth and survival

8. Traditional vs. effectual marketing
Traditional marketing
Identify latent need
New product
Satisfaction
Assumptions
Predictable future
Linear process
Effectual marketing
New product
Discover application/ customer link
Satisfaction
Unpredictable future
Iterative process with experimentation
Leverage netwerk
Affordable loss

9. Explanation: Close vs. distant search
Close search
New technology
Search scope
Most obvious applications
Distant search
Less obvious applications
So, traditional marketer and sales person of large company probably not a good idea

10. Perceived customer value (based on means-end chain): Features’ role
Desired customer value
Customer satisfaction with this value
Goals-based satisfaction
Consequence-based satisfaction
Atribute-based satisfaction
Customer’s goals and purposes
Goals (end)
Desired consequences in use situation
Benefits
Attributes
(means)
Desired product attributes and attribute peformance
Woodruff (1997)

11. Developing hypotheses about market and product/market fit
Customer needs
No-print
Convenience
Speed
First target segment is the customer segment with highest fit with technology’s current performance
Manual adjustment
Professional photographers
Excellent quality image
Amateurs
Leisure/fun
Analog/chemical
Customer segments
Digital
Technologies

12. Venturous customers and potential chasms
Innovators
Early adopters
Early majority
Late majority
Laggards
Time
Venturous customers

13. The competitive field Porter (1980) Industry boundaries SUPPLIERS
Internal competitors
Rivalry among
existing firms
Potential entrants
Buyers
Threat of new entrants, including entrepreneurs
Bargaining power
of buyers
of suppliers
Threat of substitute
products or services
Industry boundaries
Substitutes
=Brand competition
=Need competition
Porter (1980)

14. Customer development process
Customer development = serious business
So, use a formal process
Customer discovery
Customer validation
Customer creation
Company building
Search  Transition  Execution and Repetition
Blank (2006)

15. Relationship customer and product development with business model
Information exchange
Business model development process
Model identification
Model optimisation
New product development process
Customer development process

16. Test hypothesis:
–Agile development
–Customer development team
Test hypothesis:
–Demand creation
Test hypothesis:
–Problem
–Customer
–User
–Payer
Test hypothesis:
–Superiority of technology
–Solution
Test hypothesis:
–Channel
Test hypothesis:
–Size of opportunity/market
validate business model
Test hypothesis:
–Pricing model

17. Low cost marketing program
Develop a 1–2-page plan as initial sales/marketing roadmap
Affordable loss requires lean approach of marketing and sales activities
Use creativity to compensate for limited resources
Account for both marketing and sales activities
Developing marketing and sales competencies in a timely fashion

18. Additional tactical marketing and sales concepts
AIDA communication model
Pricing models
Sales model
Branding and augmented product model

19. We enjoyed working with you and hope you enjoyed the ride too!
Questions?

20. The end
Good luck with the exam!!!