1. Entrepreneurial Marketing: An Effectual Approach
Prof. Dr. E.J. Nijssen,
Eindhoven University of Technology
Available from Routledge at:
Session 1: Successfully bringing your radical new idea to market

2. Objectives Introduce entrepreneurship
Explain the marketing challenge and need for a sound business model
Juxtapose traditional and effectual marketing
Define marketing and sales

3. Entrepreneurs Entrepreneurs are people who
See the opportunity for a new product or service
Decide to pursue their dream
Many focus on their product and hope that in the end customers will line up to buy what they created
If it was only that simple…

4. The challenge entrepreneurs face
Level of newness of the idea affects the size of the challenge ahead
Changing market categories
Customers that first need to get familiar with the new idea and change their behavior to be able to use the product/service efficiently
Many new products are – in the eyes of customers – not as good as entrepreneurs claim they are…
Healthy skepticism as a customer logic
Identify customers that are
Interested
Willing to cocreate and thus can help determine the right product and features

5. To succeed you need a business model
A business model explains how and why a firm will make money
You need
A product or service,
that is a solution to a problem,
customers willing to pay for it (or other sustainable funding, e.g., advertising)

6. Value exchange process Sustainable sales and profits
Business model
Selling
Manufacturer
Customer
Needs and wants
Consumption process
Money exchange
Value exchange process
Purchasing
Validation of value by customer
Value creation and delivery process
Customer loyalty
Sustainable sales and profits
R&D, product concept

7. Core elements of a business model
Customer value model
Resource and network model
Profit model
Adapted from Sorescu, Frambach, Singh, Rangaswamy and Bridges (2011)

8. Testing your business model
Narrative test
Does the story stick (consistent, logical)?
Number test
Do the numbers add up? (Are anticipated reveneus higher than costs? What evidence do you have for cost structure, cooperation of middlemen and willingness of customers to pay?)

9. Traditional marketing
Juxtaposing
Traditional marketing
Effectual marketing
Customer- and market-driven product development; outside-in
Stable market boundaries; predict change and adapt
Top-down segmentation, targeting, positioning; linear
Formalized research and intelligence systems
Growth-oriented capabilities
Well-planned budgets and anticipated effects
Product riven; discover and drive the market; inside-out
Changing boundaries; embrace uncertainty
Iterations in segmentation, positioning
Informal networking and feedback via experimentation
Survival-oriented capabilities
Creative and low cost to allow for affordable loss

10. Defining marketing and sales
Marketing: analyzes the market and makes sure to identify and develop customers based on manifest and latent needs (creating need)
So, it is not just promotion or market research
Sales: makes the case why our product is the best choice and then aims to make a transaction (filling the need)
It involves maintaining and fostering relationships and understanding (and anticipating) customer problems/needs
Sales and marketing are complementary functions

11. Market orientation Implementation of the marketing concept
It requires making market-informed decisions based on customer and competitor data that is systematically collected, distributed and used throughout the organization
Market orientation drives innovation and has been shown to benefit firm performance, but should be used in a proactive way

12. Lessons
Marketing for radical new products and ideas is difficult because of their impact on product categorizations and required changes in customer behavior
Consequently, predictive traditional marketing should be replaced by effectual marketing, embracing uncertainty
Marketing and sales are necessary and complementary functions
Your new product/service requires a business model, which includes that the product/service offers superior customer value