Entrepreneurship:

Theory, Process,
Practice, 12e
Chapter 10: Marketing
Challenges for
Entrepreneurial Ventures

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1
 Chapter Objectives
1. Explain the new marketing concept for entrepreneurs.
2. Discuss the importance of marketing research for new ventures.
3. Identify the key elements of an effective market survey.
4. List the factors that inhibit the use of marketing.
5. Explain the emerging use of social media marketing and mobile marketing for
entrepreneurial firms.
6. Identify the components of effective marketing.
7. Summarize the marketing concept: philosophy, segmentation, and consumer
orientation.
8. Identify the areas vital to a marketing plan.
9. List the key features of a pricing strategy.
10. Discuss pricing in the social media age.

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 The New Marketing Concept for
Entrepreneurs (1 of 2)
• Shift from the 4Ps to the 4Cs:
− From Product … to Cocreated
− From Promotion … to Communities
− From Price … to Customizable
− From Place … to Choice
• The Era of Generation C (as in Content)
− Connected, creative, collaborative, and contextual
− Customer central to all effective marketing activity

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 The New Marketing Concept for
Entrepreneurs (2 of 2)
New marketing concept includes:
• Knowledge of what the market consists of
• Understanding of marketing research
• Development of a marketing plan
• Understanding and application of social media marketing
• Proper approach to a pricing strategy

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 Common Elements in the Marketing Skills
of Great Entrepreneurs
1. They possess unique environmental insight, which they use to spot opportunities that others overlook or view as problems.
2. They develop new marketing strategies that draw on their unique insights. They view the status quo and conventional wisdom as something
to be challenged.
3. They take risks that others, lacking their vision, consider foolish.
4. They live in fear of being preempted in the market.
5. They are fiercely competitive.
6. They think through the implications of any proposed strategy, screening it against their knowledge of how the marketplace functions. They
identify and solve problems that others do not even recognize.
7. They are meticulous about details and are always in search of new competitive advantages in quality and cost reduction, however small.
8. They lead from the front, executing their management strategies enthusiastically and autocratically. They maintain close information control
when they delegate.
9. They drive themselves and their subordinates.
10. They are prepared to adapt their strategies quickly and to keep adapting them until they work. They persevere long after others have given
up.
11. They have clear visions of what they want to achieve next. They can see further down the road than the average manager can see.

Source: Peter R. Dickson, Marketing Management, 1st ed. © 1994 Cengage Learning; see also Barry J. Babin and William G. Zikmund, Essentials of
Marketing Research, 6th ed. (Mason, OH: Cengage Learning, 2016).

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 Marketing Terms
• Market
− A group of consumers (potential customers) who have purchasing
power and unsatisfied needs.
− A new venture will survive only if a market exists for its product or
service.
• Marketing Research
− The gathering of information about a particular market, followed by
analysis of that information.

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 Defining the Research Purpose and
Objectives
• Where do potential customers go to purchase the good or
service in question?
• Why do they choose to go there?
• What is the size of the market? How much of it can the business
capture?
• How does the business compare with competitors?
• What impact does the business’s promotion have on customers?
• What types of products or services are desired by potential
customers?

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 Gathering Information
• Secondary Data
− Information that has already been compiled.
▪ Advantage: Less expensive and available
▪ Disadvantages: Outdated, lacks specificity, questionable validity
▪ Sources: Internal and/or external sources

• Primary Data
− New information that is gathered specifically for the research at
hand.
▪ Surveys
▪ Experimentation

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 Developing an Information-Gathering
Instrument
• Make sure each question pertains to a specific objective that is in line
with the purpose of the study.
• Place simple questions first and difficult-to-answer questions later in
the questionnaire.
• Avoid leading and biased questions.
• Ask yourself: “How could this question be misinterpreted?” Reword
questions to avoid misunderstanding.
• Give concise but not complete directions in the questionnaire.
• Use scaled questions rather than simple yes/no questions
to measure intensity of an attitude or frequency of an experience.

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 Quantitative versus Qualitative
Marketing Research
• Quantitative Research • Qualitative Research
− Involves empirical assessments that – Requires smaller sample size as it
work from numerical measurements involves the researcher in the
and analytical approaches to compare process and is able to delve deeper
the results. into the questions with the
respondents.
− The researcher is an uninvolved – Relies less on analytical testing, and
observer so that the results are the researcher is engaged in the
“objective.” process; the results are considered
− Requires larger samples to be able to “subjective.”
perform the statistical analyses.

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 Comparison of Major Survey Research
Techniques
Door-to-Door Personal Mall Intercept Personal Telephone Interview Mail Survey Internet Survey
Interview Interview
Speed of data collection Moderate to fast Fast Very fast Slow; researcher has no control over Instantaneous; 24/7
return of questionnaire
Geographic flexibility Limited to moderate Confined; possible urban bias High High High (worldwide)
Respondent cooperation Excellent Moderate to low Good Moderate; poorly designed questionnaire Varies depending on website; high from
will have low response rate consumer panels
Versatility of questioning Quite versatile Extremely versatile Moderate Not versatile; requires highly Extremely versatile
standardized format
Questionnaire length Long Moderate to long Moderate Varies depending on incentive Moderate; length customized based on
answers
Item nonresponse rate Low Medium Medium High Software can assure none
Possibility for respondent Low Low Average High; no interviewer present for High
misunderstanding clarification
Degree of interviewer High High Moderate None; interviewer absent None
influence on answer
Supervision of Moderate Moderate to high High; especially with central Not applicable Not applicable
interviewers location interviewing
Anonymity of respondent Low Low Moderate High Respondent can be either anonymous or
known
Ease of callback or Difficult Difficult Easy Easy, but takes time Difficult, unless e-mail address is known
follow-up
Cost Highest Moderate to high Low to moderate Lowest Law
Special features Visual materials may be Taste tests, viewing of TV Fieldwork and supervision of data Respondent may answer questions at Streaming media software allows use of
shown or demonstrated; commercials possible collection are simplified; quite own convenience: has time to reflect on graphics and animation
extended probing possible adaptable to computer technology answers

Source: Peter R. Dickson, Marketing Management, 1st ed., © 1994 Cengage Learning; see also Barry J. Babin and William G. Zikmund, Essentials of Marketing Research, 6th ed.
(Mason, OH: Cengage Learning, 2016).

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Interpreting and Reporting the Information
• Data organized and molded into meaningful information.
− Tables, charts, graphs
− Descriptive statistics—mean, mode, median
• Market research subject areas:
− Sales
− Distribution
− Markets
− Advertising
− Products

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 Inhibitors to Marketing Research
• Mistaken beliefs that inhibit the use of marketing research:
− Cost: Research is too expensive.
− Complexity: Research techniques rely on overly complex sampling,
surveying, and statistical analysis.
− Strategic Decisions: Only major strategic decisions need to be
supported through marketing research.
− Irrelevancy: Research data will contain either information that
merely supports what is already known or irrelevant information.

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 Social Media Marketing
• Social Media Marketing
− The use of social networks, online communities, blogs, wikis, and
other online collaborative media tools for marketing purposes.
• Effective Social Media Marketing
− Create value with an event, video, tweet, or blog entry that attracts
attention and becomes viral.
− Enable customers to promote a message themselves with multiple
online social media venues.
− Encourage user participation and dialogue that fully engages
customers with online conversations.

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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Key Distinctions of Social Media Marketing
• Control versus Contributions
− Social medial marketing emphasizes audience contribution and
relinquishes control over large parts of the content.
• Trust Building
− Firms cannot fully control the content users create; development of
trusting relationships is required.
• Two-Way Communication
− Social media creates an ongoing interactive conversation between
the new venture and the customer.

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Developing a Social Media Marketing Plan

• Listen • Collaborate
• Identify • Contribute
• Categorize • Convert
• Appraise • Monitor
• Implement

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 Traditional versus Entrepreneurial
Marketing
Conventional Marketing Entrepreneurial Marketing
Basic premise Facilitation of transactions and market control Sustainable competitive advantage through value-creating
innovation
Orientation Marketing as objective, dispassionate science Central role of passion, zeal, persistence, and creativity in
marketing
Context Established, relatively stable markets Envisioned, emerging, and fragmented markets with high levels of
turbulence
Marketer’s role Coordinator of marketing mix; builder of the brand Internal and external change agent; creator of the category
Market approach Reactive and adaptive approach to current market situation with Proactive approach, leading the customer with dynamic innovation
incremental innovation
Customer needs Articulated, assumed, expressed by customers through survey Unarticulated, discovered, identified through lead users
research
Risk perspective Risk minimization in marketing actions Marketing as vehicle for calculated risk taking; emphasis on finding
ways to mitigate, stage, or share risks
Resource Efficient use of existing resources, scarcity mentality Leveraging, creative use of the resources of others; doing more
management with less; actions are not constrained by resources currently
controlled
New product/service Marketing supports new product/ service development activities Marketing is the home of innovation; customer is coactive
development of research and development and other technical departments producer
Customer’s role External source of intelligence and feedback Active participant in firm’s marketing decision process, defining
product, price, distribution, and communications approaches.

Source: Minet Schindehutte, Michael H. Morris, and Leyland F. Pitt, Rethinking Marketing (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), p. 30.

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 Mobile Marketing
• Mobile Marketing
− Use of portable wireless devices to connect to the Internet.
− People can access data and interact on the social web while on the
move.
• Mobile Social Media Strategy: The Four I’s
− Integrate
− Individualize
− Involve
− Initiate

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Entrepreneurial Tactics in Market Research

• Guerrilla marketing • Focus groups

• Insights in ordinary patterns • Lead user research
• Technological tools • Blog monitoring
• Customer observation • Archival research
• Web-based surveys

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 The Components of Effective Marketing
(1 of 2)
• Marketing Philosophies
− Production-driven philosophy
− Sales-driven philosophy
− Consumer-driven philosophy
• Factors in Choosing a Marketing Philosophy
− Competitive pressure
− Entrepreneur’s background
− Short-term focus

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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 The Components of Effective Marketing
(2 of 2)
• Market Segmentation
− The process of identifying a specific set of characteristics that
differentiate one group of consumers from the rest.
− Demographic variables
▪ Age, marital status, sex, occupation, income, and location
− Benefit variables
▪ Convenience, cost, style, and trends (depending on the nature of the
particular new venture)

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 Consumer Behavior
• Consumer Behavior
− The types and patterns of consumer characteristics
▪ Personal characteristics
▪ Psychological characteristics

• Major Types of Consumers

1. Innovators
2. Early adopters
3. Early majority
4. Late majority
5. Laggards

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 Contemporary consumers are:
Informed about your company, industry, and events
Eager for solutions
Social with other customers
Connected to various devices and channels
Opinionated and vocal
Willing to be self-sufficient
Critical of competitive customer experiences
Expecting businesses to be proactive
Contemporary consumers want:

Keys to
Solutions on the Internet
To avoid excessive ads
To compare different brands

Understanding The best value for the money

To make purchases with no bureaucracy

Consumer
To feel part of a community
Other people’s opinion of a product
New market trends

Behavior To be influenced by people they admire

Eco-friendly products and avoid waste
Contemporary consumers’ Spheres of influence:
Reciprocity. The need to return a favor or reciprocate kind gestures (free samples and discounts)
Commitment. Cultivating brand loyalty (return customers)
Consensus. Popularity across a wide customer base (increases customers)
Authority. Relevant experts on the effectiveness of a brand (convert new consumers)
Liking. Similar demographics—whether in terms of ethnicity, socioeconomic class, religious inclination, or even
shared interests (persuade customers)
Scarcity. Exclusivity or short supply (increases the likelihood of purchase)
Source: Peter R. Dickson, Marketing Management, 1st ed., © 1994 Cengage Learning; see also William M. Pride and
O. C. Ferrell, Marketing 18th ed. (Mason, OH: Cengage Learning, 2016).

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 Channels of Distribution
• Types of Distribution Channels: Direct channels, Indirect channels, Hybrid
channels
• Selecting a Distribution Channels
− How long is the products shelf life”
− How large is the market for this product?
− How large is the company and what is its product mix?
− What is the cost of a specific channel of distribution?
− Are you in the right channels for your target customers?
− Are they stocking sufficient inventory?
− Are they giving your product proper location(s)?
− Are they supporting you with knowledge salespeople if point-of-purchase “selling”
is needed?
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 Drivers of Channel Support for Retail
• Gross margin return on inventory investment (GMROI)
− (retail units * volume) / (average inventory investment)
• Helping channel with investment management results in greater
support and sales for entrepreneur’s product.
• Classification of consumer products
− Convenience, shopping, specialty, unsought, and new products

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 Developing a Marketing Plan (1 of 2)
• Marketing Plan
− The process of determining a clear, comprehensive approach to the
creation of customers.
• Elements of the Marketing Plan
− Current marketing research
− Current sales analysis
− Marketing information system
− Sales forecasting
− Evaluation
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 Developing a Marketing Plan (2 of 2)
• Current Marketing Research
− The purpose of marketing research is to identify customers—target
markets—and to fulfill their desires.
• Areas of Market Research
− The company’s major strengths and weaknesses
− Market profile
− Current and best customers
− Potential customers
− Competition
− Outside factors
− Legal changes
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 Current Sales Analysis
• Sales Research Questions:
− Do salespeople call on their most qualified prospects on a proper priority and
time-allocation basis?
− Does the sales force contact decision makers?
− Are territories aligned according to sales potential and salespeople’s abilities?
− Are sales calls coordinated with other selling efforts, such as trade publication
advertising, trade shows, and direct mail?
− Do salespeople ask the right questions on sales calls? Do sales reports contain
appropriate information? Does the sales force understand potential customers’
needs?
− How does the growth or decline of a customer’s or a prospect’s business affect
the company’s own sales?

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 Marketing Information System
• Marketing Information System
− Compiles and organizes data relating to cost, revenue, and profit
from the customer base for monitoring the strategies, decisions, and
programs concerned with marketing.
• Factors affecting the value of a system:
1. Data reliability
2. Data usefulness or understandability
3. Reporting system timeliness
4. Data relevancy
5. System cost

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 Market Planning
• Sales Forecasting
− The process of projecting future sales through historical sales
figures and the application of statistical techniques.
• Evaluation
− Evaluating marketing plan performance is important so that
flexibility and adjustment can be incorporated into marketing
planning.

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 The Market Plan: A Structured Approach
1. Appraise marketing strengths and weaknesses, emphasizing
“competitive edge” factors.
2. Develop marketing objectives, along with short- and
intermediate-range sales goals.
3. Develop product/service strategies.
4. Develop marketing strategies to achieve intermediate- and long-
range sales goals and long-term marketing objectives.
5. Determine a pricing structure.

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 Pricing Strategies (1 of 2)
• Factors affecting the pricing decision:
− Degree of competitive pressure
− Availability of sufficient supply
− Seasonal or cyclical changes in demand
− Distribution costs
− Product’s life-cycle stage
− Changes in production costs
− Prevailing economic conditions
− Customer services provided by the seller
− Amount of promotion
− Market’s buying power
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 Pricing Strategies (2 of 2)
• Psychological factors affecting the pricing decision:
− The quality of a product is interpreted by customers according to
the level of the item’s price.
− Customer groups shy away from purchasing a product when no
printed price schedule is available.
− Emphasis on the monthly cost of purchasing an expensive item
results in greater sales than an emphasis on total selling price.
− Buyers expect to pay even-numbered prices for prestigious items
and odd-numbered prices for commonly available goods.
− The greater the number of customer benefits the seller can convey
about a product, the less the price resistance.
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 Views of Pricing
• Pricing can be viewed as:
− Value: amount customer will pay
− Variable: components of paying, such as time
− Variety: using price to influence sales
− Visible: customers can see prices
− Virtual: easiest and quickest to change

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 Pricing for Product Life Cycle
Customer demand and sales volume will vary with the development of a product. Thus, pricing for products needs to be adjusted at each stage of
their life cycle. The following outline provides some suggested pricing methods that relate to the different stages in the product life cycle. With
this general outline in mind, potential entrepreneurs can formulate the most appropriate pricing strategy.

Product Life Pricing Strategy Reasons/Effects

Cycle Stage
Introductory
Stage
Unique product Skimming—deliberately setting a high price to Initial price set high to establish a quality image, to provide capital to
maximize short-term profits offset development costs, and to allow for future price reductions to
handle competition
Nonunique Penetration—setting prices at such a low level that Allows quick gains in market share by setting a price below
product products are sold at a loss competitors’ prices
Growth stage Consumer pricing—combining penetration and Depends on the number of potential competitors, size of total market,
competitive pricing to gain market share; depends on and distribution of that market
consumer’s perceived value of product
Maturity stage Demand-oriented pricing—a flexible strategy that Sales growth declines; customers are very price sensitive
bases pricing decisions on the demand level for the
product
Decline stage Loss leader pricing—pricing the product below cost in Product possesses little or no attraction to customers; the idea is to
an attempt to attract customers to other products have low prices bring customers to newer product lines

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 Pricing in the Social Media Age
• Freemium Model
− Basic services provided free while charging for premium.
• Affiliate Model
− Sellers rely on traffic from affiliated sites.
• Subscription Model
− Users pay a fee to access a product.
• Virtual Goods Model
− Users pay for virtual goods: upgrades, points, gifts.
• Advertising Model
− Advertisement is sold based on traffic on the website.
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 Summary
Click the link to review the objectives for this presentation.

Link to Objectives

Donald F. Kuratko, Entrepreneurship: Theory, Process, Practice, 12th Edition. © 2024 Cengage. All Rights Reserved. May not be
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