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Katz Esb 6e Chap009
Katz Esb 6e Chap009
Chapter Nine
Small Business Marketing:
Customers and Products
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Education.
The Marketing Process
The customer
development The product
process focuses development
specifically on process perfects the
meeting the needs of product or the
the customer, innovation within the
hopefully leading to a product.
new product/service.
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Customer Roles
• When you buy a product/service and use it yourself, you are the end
user, and the purchaser.
• In organizations, a person or office is the purchaser for other end users.
• Yet another person may be the decision maker who determines what
will be bought for end users, then the purchaser places the order.
• For individuals or organizations, an additional role is the influencers
making suggestions/recommendations to people in any of these roles.
Understand these roles to better understand your customers.
• Use the roles to help map out the purchasing process.
• Closely related to this is the idea of the customers’ budget cycle, or
for major purchases the capital budgeting cycle.
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Initial Customer Profiles
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Target Market
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Target Market – The Target Customer
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Target Market – Finding First Customers
First customers are a key challenge for a start-up and though sales for
cash are good, there are other nonfinancial benefits.
• Feedback.
• Testimonials.
• Sharing on their social media accounts.
Three ways to find first customers are:
• Family and friends – they may not need or use the product.
• Early adopters – likely to impulse buy but more difficult to find them.
• People in pain – they appreciate your product the most and provide
feedback but they are even harder to find.
Connecting with the people in pain is the most useful and may be worth
discounting, or giving away, your product to obtain a chance at follow-up.
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Target Market – Thinking about Customer Service
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Segmenting Your Market
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A Segmentation Example
You live in Phoenix, are bilingual in English and Spanish, and want to
start a day-care with a bilingual focus.
• You create a customer profile and find interest but are unsure about
where to locate the day-care center.
• You’ve segmented your market to a life cycle position – parents of
small children – and want a location central to your demographic.
• Using the website zipwho or city-data, find the zip code with the
biggest target demographic in the area.
• With your target zip code, go to PRIZM to identify the five largest
market segments within a specific zip code.
The main reason for targeting a market segment is so you do not waste
effort and money targeting the wrong customers.
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Marketing Research
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Primary Research
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Secondary Research
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The Basics: Crafting Your Value Proposition
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Planning for Marketing
The goal is to create the specifics of the marketing strategy you will use
to generate sales for your business.
• Marketing is one of the building blocks for your business plan, it
cannot be set in concrete.
• In preparing the marketing section of the business plan, you will be
doing most of the work for a stand-alone marketing plan.
• For start-ups, a marketing plan helps a firm build its brand and
relationship with customers.
• You can get help creating a marketing plan at the SBA or SCORE.
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Product: The Total Product Approach
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Product: New Product Development Process
Developing a simple me-too product may only take hours and steps
may be skipped. Regardless of the pace, this is a necessary process.
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Product Life Cycle
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Service Life Cycle
Services go
through the same
four stages, but it
is easier to extend
the life cycle and
eliminate the
decline stage.
On-the-run
changes mean
your service starts
a new life cycle
with each tweak of
its offering.
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Using the Product Life Cycle
The product life cycle shares challenges with firm or industry life cycles.
• It is hard to know exactly where in a cycle a product/service might be.
• You must be aware of the product cycle and consider where your
product might be and what that means.
• You should understand that the determination can be imperfect and
unpredictable.
• Knowing where your product stands in the life cycle gives you a way
to think about your product, customers, and competition.
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