E/ME 105

Lecture 3 Marketing
October 3, 2006
Mission Statement
2 minute Team Mission
Presentations
Due on Thursday.
Send in ppt 1 hour before class
Since last week
Friday phone conversation with Landivar
They are working on the developing world barriers
thought process
We will meet with them by Skype on Thursday
mornings
They may be one lecture behind at the end of the week but
they will have seen the Tuesday Lecture and the Thursday
ppt.
Tried Adobe collaboration product
Not impressed
Teams formed?
What is Marketing?
What is Marketing?
4 Ps of Marketing
Process of pIanning and executing
Product
Promotion
Pricing
PIace (or distribution system)
of ideas, goods and services to satisfy
customers
True for developing world as well
mportance of Marketing
Perhaps the single most important failure mode in the
product development process
Sloppy research (confirm prejudices)
n development, not really understanding the customer
Poor communication
The "Margaret Mead effect
Ephemeral nature
Not in an equilibrium state
(right wrong)
Poorly coupled to design
Treated as a separate activity
Too well coupled into design
Constant changes in specifications
Some good attributes
Strong Customer involvement
Customer cares
Customer has "pain
Can define market segment (to be
discussed)
Market growing
Competitive advantage
Others
Techniques
nterviewing
Polling
Working together to a common purpose
Filming
Other?
Consider in turn
P1 Product
Needs identification
How product wouId actuaIIy be used
Context discovery
Brainstorming of concept
"ChiIero" or cooIness
Modification of existing product for new
market
Consider in turn
P2 Pricing
What the customer can afford
What vaIue does the product bring
What financing arrangements are
possibIe?
What is the price of a competitive product?
What price is necessary to return a profit?
What is the reason for keeping the
price as Iow as possibIe?
How does the cost effect the price
(don't confuse!)?
Is it "immoraI' to earn a "fat" profit?
Consider in turn
P3 Promotion
How do you make the customer aware of the existence of
the product?
Word of mouth
Brochures pictures?
Demo at market
Someone use it for free
Product advertises itseIf
Radio
EvangeIicaI stations
Use Saturday Ioudspeakers
Door to Door
Use IocaI Ianguages
How can you generate excitement about the product?
Pizzazz
PersonaI experiences- testimoniaIs
Promotion Iower price
CeIebrity endorsements footbaII pIayers, community Ieaders,
church Ieaders
What are the costs of Promotion
Need to budget
Consider in turn
P4 PIacement (Distribution)
How do you get the product to the
customer?
Consider where it wiII be
manufactured
Consider who wiII seII it? (effect on
price!)
Consider how you get it to the
person who wiII seII it
Consider how it wiII be maintained
Marketing Research
Primary Research
riginal research - data coIIected from the
target market
Secondary Research
eta research- data coIIected from Iiterature,
internet
We have defined a third research
classification
Proxy research
#esearch through knowledgeable third parties
People with first hand experience in the specific
market
Marketing Research
Primary Research
riginal research- data coIIected
from the target market
andivar students Iead here
Use in-country contacts (NGOs, professors,
other students)
Use teIeconferencing
Interview peopIe from indigenous
viIIages in ?
Other?
Marketing Research
eta research- data coIIected from
Iiterature
trade association data
industry pubIications and databases
"Economist" and other pubIications
government databases (e.g., US Dept of
Commerce, State Dept, GuatemaIan
trade)
UN, NGO databases
Other?
Go quickIy from generaI to particuIar
Marketing Research
Proxy research- data coIIected
from peopIe with first or second
hand information
Mentors
Returning Peace Corps voIunteers
Returning NGOs
andivar partners
Others?
Target Markets
Who are the peopIe who wiII use your product?
Geographic
ocation, cIimate, popuIation size and growth rate
Demographic
ge, sex, ethnicity, income, occupation, education
Psychographic
ife-styIe, activities, interests, opinions
How wiII they use product (use patterns)?
What benefits wiII they derive?
Do for
Primary market- the first market addressed
Secondary market- the next market(s)
Segmentation- continued
Psychographic variabIes
Iife-styIe
ctivities
Interests
Opinions
product use patterns
and product benefits
arriers
What are some of the reasons why your
customer won't adopt your product?
What can you do to mitigate this risk?
After approval of your Mission
Statement. . .
Research Market
egin Research
Write script
Script
egin with Market hypotheses (3-6)
Examples?
Design questions to test these hypotheses
Keep short- you are using up people's
time!! 30 minutes tops. 10 minutes better
Can your customers use internet?
http://www.surveymonkey.com/
http://www.zoomerang.com
Market segmentation
Market "strategy
%here are 1.3B Chinese. Even if we got only
1% of the market. . .
What's wrong with this?
The Technology Adoption Model
as the asis for Segment Focus
measure of the rate of adoption of a cluster of new
technologies by a community over time
Ear|y Vajor|ly
lrrovalors
R
a
l
e

o
l

A
d
o
p
l
|
o
r
Laggards
Lale Vajor|ly
Ear|y Adoplers
T|re
Where are you on this curve?
The ew Idea Adoption Model in
the developing world
as the asis for Segment Focus
measure of the rate of adoption of a cluster of new ideas
by a community over time
Ear|y Vajor|ly
lrrovalors
R
a
l
e

o
l

A
d
o
p
l
|
o
r
Laggards
Lale Vajor|ly
Ear|y Adoplers
T|re
Where is your target segment on this curve?
The ew Idea Adoption Model in the developing
world
as the asis for Segment Focus
Ear|y Vajor|ly
lrrovalors
R
a
l
e

o
l

A
d
o
p
l
|
o
r
Laggards
Lale Vajor|ly
Ear|y Adoplers
T|re
Consider age, sex, Ieadership position in viIIage, respect,
income, poIiticaI savvy, entrepreneuriaI spirit, etc.
Generate Hypotheses & Identify UnderIying ssumptions
EVU%ION
QUES%IONS:
For Which
Customers Do
I SoIve
Important
ProbIems?
Does %he
VaIue vs.
Competitive
Iternatives
Justify
Change?
How Many
Customers &
What WiII
%hey Pay?
Requirements
to ttract, SeII
& Support
%hese
Customers?
State your
assumptions
regarding
what your
product is,
what it does,
and the
impIications
for reIated
technoIogies
Quantify the
probIem you
soIve vs.
aIternatives in
each target
segment
By Industry
By ppIication
(Use the
product to.)
By other
segment
variabIe
Quantify totaI
cost of
adoption/
switching vs.
current
methods or
aIternatives for
each target
segment
Is it worth it to a
customer?
Consider the
cuIturaI issues
that are barriers
to change!
Why wiII soIving
this probIem be
important to
more
customers over
time?
What wiII
customers be
wiIIing to pay &
what are the
impIications for
your business
modeI?
What wiII it take
to generate
word-of-mouth
and "brand"
awareness?
What kind of
distribution
modeI does the
business modeI
require?
What support
wiII customers
need to evaIuate
and use the
product?
Recruit nterview Targets
How do I get them to taIk to me?
Use your personaI, student and other GuatemaIan
contacts!
Remember 6 degrees of separation! Do you know
someone who knows someone?
EmaiI addresses and numbers often on the web
%ap your network for contacts, kiss frogs
With IPOs, you are a credibIe student group
buiIding products and services for GuatemaIa. --
meeting is a chance to infIuence those
investments
With merican Universities use the CaItech name!
Be shameIess!
From GuatemaIan company names get HQ city,
find phone number.
For the real customer
Develop relationships in the village
through multiple contacts
Socialize
Help them with what they are doing
Use influencers (heads, other volunteers)
Others
(Landivar! Help!)
nterview
How do I approach them?
Use your 30-second pitch for in-person
caIIs
E-maiI, foIIow-up phone caIIs work weII
Send them a 2-pager on what you know to
date
Provide agenda and generaI topics in
advance -- gives the target a chance to
think
Open Ended nterview Questions
FIow from generaI to increasingIy specific, but
aIways open ended
Question "DOs"
Why? How do you measure that? How do you define
that term? What's working, what isn't? Can you
draw a diagram of that so I can see where it fits in
your overaII probIem? How did you determine the
vaIue of that? How wouId you make tradeoffs among
those things? How wiII you remove barriers to your
success? What wouId the ideaI situation Iook Iike?
Question "DON'%s"
Don't you think if.? WouId you Iike it if.? BIack or
white, yes or no.? We think, what do you think? If
we do this, wiII you do that? What do you want?
What wiII you pay for it? What shouId we do?
Competition
The competitive landscape
Provide an overview of
product competitors, their
strengths and weaknesses
Position each competitor's
product against new product
o competition is also
competition i.e., 'doing
nothing" is an alternative
A

C
D
Performance
P
r
i
c
e
Note: Size of circIe
can represent market share
"Competition
Why have previous attempts at
development products failed in your
marketplace
How are you going to do better?
Why should you succeed?
Write as hypothesis and test in your
market study
Stakeholders
Who has to touch the product and the
process for it to be successful?
Consider everyone involved
Everyone who can help
Everyone who can get in the way
Important part of understanding market
-people you ignore at your peril