1. Entrepreneurial Marketing: An Effectual Approach
Prof. Dr. E.J. Nijssen,
Eindhoven University of Technology
Available from Routledge at:
Session 9: Developing the new firm’s marketing and sales capabilities

2. Objectives
Timely development of sales and marketing capabilities for a start-up firm
Distinguishing capabilities for firm survival vs. growth
Marketing and sales contribute to important business processes
Linking marketing and sales capabilities to the customer development process

3. What are the capabilities?
Resources, applied in business processes which are the basis for competitive advantage
Resource-based view of the firm
Rather than directly affecting performance, the effect is generally mediated by process outcomes
Capabilities are unique and hard to copy  explain advantage and sustainability of advantage

4. 12 Dimensions of the Bell-Mason Diagnostic

5. Four stages of growth

6. Bell and Mason framework
Intensified attention for marketing/ sales; shift from marketing/sales to sales/marketing
At initial stage attention for marketing and sales not very high
Stages:
In product development stage pay as much attention to commercial as technical

7. Commercial competencies
New business building experience, specifically needs
Creative segmentation and targeting
Pricing (based on business model)
Creative advertising and buzz marketing
Building channel access
Setting up market and customer database
Stimulating complementary products
Building and motivating sales force focusing on explorative selling (selling-in)
Generating leads/networking
Developing excellent sales arguments and materials

8. Different marketing/sales capabilities for different stages of development
Effectual marketing
Survival (customer discovery & validation)
+/0 + − + − + − +
Market probing and experi- menting
Prospecting, networking to get channel access
Buzz marketing, leverage reference customer
Basic pricing skills
Start-up’s commer-cialization
efforts
Product- line develop- ment
Account management & multi- channel
Regular market research
Brand concept and brand community management
Growth (customer creation & company building) + + + − +
+/0 +
+/0
Traditional marketing

9. Marketing and sales’ contribution to business processes
Opportunity recognition
Development
Technical testing
Improvement
New product development process
Customer discovery
Customer validation
Customer creation
Business building
Customer development and relationship process
Supplier management
Manufacturing
Delivery/ logistics
Service
Supply chain management process
Adapted from Srivastava, Shervani and Fahey (1999)

10. Integrated view Marketing & sales capabilities Experimentation,
Opportunity recognition
Development
Technical testing
Improvement
New product development process
Customer discovery
Customer validation
Customer creation
Business building
Customer development and relationship process
Marketing & sales capabilities
Experimentation,
feedback
Lean operations and initial launch
Supplier management
Manufacturing
Delivery/ logistics
Service
Supply chain management process

11. Customer development team
Use a team to manage the customer development process
Too important and sensitive to leave to hired hand
So, founding members/entrepreneur him/herself
Preferrably also a person with marketing/sales background and affinity for technology
Linking pin to engineers/NPD
Relentless energy/motivating people and stong network building capabilities
(Blank 2007)

12. Lessons
Entrepreneurial firms face many challenges and need to build their organization
Danger of neglecting commercial side; need to develop commercial capabilities
Different marketing and sales capabilities are required for survival and growth
Cannot speed up by hiring more staff
Sales learning curve
Experimentation
Use lean approach (affordable loss)
Important to understand that marketing contributes to several important busines processes

13. General reflection
As Drucker explained, a firm needs R&D and marketing to create and deliver (exchange) innovations
For entrepreneurs with radical new ideas effectual rather than traditional marketing is required
Techology changes market boundaries and creates uncertainty; makes things unpredictable
Need to educate customers
Need to discover best target segment using experimentation
Effectual marketing can help turn your start-up into a success

14. Classical vs effectual approach
Classical approach
Identify latent need
New product
Satisfaction
Assumptions
Predictable future
Lineair process
Effectual approach
New product
Discover application/ customer link
Satisfaction
Unpredictable future
Iterative process with experimentation
Leverage netwerk
Affordable loss

15. General reflection (2)
Important to complement new product development process with a new customer development process
Build effectual marketing and sales capabilities
Account for the sales learning curve; first discover, validate then develop roadmap and add more sales staff (not the other way around)
Make sure to involve customers at an early stage, and focus on venturesome, lead user customers

16. The end
© 2017 Edwin J. Nijssen