Preface of Textbook
About the Textbook
About the Authors
Book Website at McGraw-Hill
DVD Contents
Stanford 1e Book Website
McGraw-Hill 1e Book Website
Book Contents
Table of Contents
Venture Opportunity, Concept and Strategy
Venture Formation and Planning
Functional Planning of the Venture
Financing and Building the Venture
  Business Plans (App. A)
  Case Studies (App. B)
Online Sources (App. C)
Sample Syllabus
Course Overview
Calendar of Sessions
Entrepreneurial Perspective
Idea or Opportunity
Gathering Resources
Managing Ventures
Entrepreneurship and You
Additional Resources
Schools Using This Textbook
Authors Blog

This activity, called marketing, is critical to the success of a new firm since the firm normally starts without any customers. A new business must create a marketing and sales plan, which describes its target customers for its product offering. A sound marketing plan is built on solid information obtained through market research. The new firm creates a product position and a mix of price, product, promotion, and distribution channels that will attract and satisfy the customer. Gaining recognition and acceptance in a target market requires the following steps in sequence:

  • Describe the product offering
  • Describe the target customer
  • State the marketing objectives
  • Gather information through market research
  • Create a marketing plan
  • Create a sales plan
  • Build a marketing and sales staff In this chapter, we describe each of these activities.

Sycamore Networks
Founders Desh Deshpande and Dan Smith reflect on Sycamore's sales strategies and consider how going public might affect the morale of its key employees. In the optical networking sector, technological change and exploding demand has created a market for talent in which many capable employees strike out on their own to found new competitors--taking their important sales relationships with them. Sycamore needed to learn how it could continue to attract--and retain--the brightest in the business. Teaching Purpose: Provides an introduction to a framework for thinking about the sales process, and serves as a good introduction to the optical networking market.
Orange Gum Pty. Ltd.
Orange Gum wanted to become Asia's leader in providing high quality content for wireless carriers to offer to their subscribers as value-added services. Orange Gum had established relationships with all the leading wireless carriers with Hong Kong, Taiwan, China, Singapore, Philippines and Malaysia. In the short term, Orange Gum needed to make decisions in three areas. First, how could they increase the supply of high quality content in their pipeline to their customers? Second, how could they accelerate the adoption of Orange Gum's mobile entertainment products by customers in China? Third, how could Orange Gum promote its products and build its brands with only a shoestring budget for marketing?
Pixim (A): August 2001
Pixim, Inc., a start-up founded in 1999 by two electrical engineering graduate students and an electrical engineering professor, made semiconductors for digital imaging devices. The 38-employee company's core technology, the Digital Pixel System platform, or DPS, was a digital imaging system based on technology that two of the founders had developed at Stanford University, which licensed the technology to Pixim. In August 2001, Rob Siegel, vice-president of business development, considered the company's position. Hired to lead strategy and help with large corporate relationships, Siegel had conducted an internal review and organized some key meetings during the previous three months. His analysis helped the company narrow its focus to its first market. Teaching Purpose: To discuss the challenges a small start-up faces in selecting the best market and applications for its nascent technology.
(DVD Section 11.7) Vic Verma: Passion and the Customer
When listing his first two lessons for aspiring entrepreneurs, Vic says you must love what you're doing, and you must listen to the customer -- the customer is always right.
(DVD Section 11.9) Guy Kawasaki: Seed the clouds and watch the sales grow
There are typical ways to approach sales, but Guy has three other ideas. These include the unintended users, allowing test drives, and the suck down theory - chances are the CEO is not going to be the one buying your product, but rather the people at lower levels.
Jeff Hawkins: Importance of Customers and Testing
I never had a technology company, says Jeff Hawkins. He believes that products come out of product marketing people who really love products, understand products, tear apart products. He asks his employees to use competitor products to learn something from them. The focus should be on what people want and what they need rather than only on technology.To build a successful product one has to innovate continuously focusing on what people do and not what they say. And if you build a product, use the thing yourself.
Elon Musk: Viral Marketing
The essence of viral marketing is making one customer sell to the other. Instances of this include Friendster, hotmail, PayPal. The customer must love the product experience to recommend it.
Jeff Hawkins: Role of Market Research
What is the role of market research? How do you know when to listen to customers, and when to follow your intuition and vision for the future? Hawkins shares the story of graffiti, handwriting recognition and intuitive leap of using keyboard analogy to show that users can and will adopt to a technology.
Matt Hershenson: Marketing and the Hiptop Brand
The success and genius of the Hiptop brand is arguably in its marketing. Danger actually gave carriers the choice of whether to use the Hiptop name and artwork or whether to use their own. Out of 9 carriers, T-Mobile is the only one to have used their own name and, therefore, the Hiptop brand has become valuable.
Ann Winblad: Customers are Key
VCs spend a lot of time with the leaders of major technology companies to find out what they are looking for. It is important to talk to consumers early rather than late. Today's leaders are technologically-savvy, know what they need, and are willing to tell you if you ask.
Geoffery Moore: Customer Intimacy Zone
Geoff delves into the Customer Intimacy zone to explain the innovations that comprise this zone: line extension, enhancement, marketing, experiential innovations.
Guy Kawasaki: Lower the barriers of adoption
A successful product is easy for everyone to use, immediately. Flatten the learning curve, never ask someone to do something you would not, and recruit evangelists to spread your message.
Marc Fleury: The Importance of Establishing Critical Mass
Marc talks about establishing and maintaining a critical mass within the market. Without it, he explains, you will find yourself in a very difficult situation and VCs will view you differently.
Geoffery Moore: Fractal Markets
Geoff explains the concept of fractalization of markets when markets get out of the growth phase.

Contextual Marketing: The Real Business of the Internet
The painful truth is that the Internet has been a letdown for most companies--largely because the dominant model for Internet commerce, the destination Web site, doesn't suit the needs of those companies or their customers. Most consumer product companies don't provide enough value or dynamic information to induce customers to make the repeat visits--and disclose the detailed information--that make such sites profitable. Instead of trying to create destinations that people will come to, companies need to use the power and reach of the Internet to deliver tailored messages and information to customers. Companies have to become what the authors call "contextual marketers." Delivering the most relevant information possible to consumers in the most timely manner possible will become feasible, the authors say, as access moves beyond the PC to shopping malls, retail stores, airports, bus stations, and even cars. The authors describe how the ubiquitous Internet will hasten the demise of the destination Web site--and open up scads of opportunities to reach customers through marketing "mobilemediaries," such as smart cards, e-wallets, and bar code scanners.

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