Entrepreneurial Marketing
Handbook topic · Entrepreneurial Marketing — leveraging innovative marketing to drive entrepreneurial growth
New ventures have little money, little market power and no reputation, so they cannot market like a large firm. This week shows how entrepreneurial marketing works around those limits: learning what customers need, choosing and positioning for a target segment, building a brand, setting the marketing mix and promoting creatively. The tutorial applies the 4Ps to the JD case and introduces the Gibbs Reflective Cycle for the reflection in your Individual Report.
The big question
How can a small, unknown venture with limited resources win customers in a new market against established competitors?
By the end of this week you can
- Explain the three characteristics of entrepreneurial firms that shape their marketing, and compare entrepreneurial with traditional marketing using Stokes (2000).
- Choose suitable market research methods for a start-up with a small budget.
- Apply segmentation, targeting and positioning to a venture and write a positioning statement.
- Explain how branding helps a new venture overcome customers’ lack of trust.
- Build a marketing mix (product, price, place, promotion) and justify a pricing strategy.
- Design innovative, low-cost promotion drawing on the JD case and earlier module cases.
- Structure a reflection with the six stages of the Gibbs Reflective Cycle.
Why entrepreneurial firms market differently
Marketing textbooks are usually written for large firms. A start-up faces three constraints that change what marketing can realistically look like.
| Characteristic | What the lecture says | Marketing consequence |
|---|---|---|
| Limited capital | A shortage (paucity) of capital is one of the main problems entrepreneurial firms face. | Large advertising campaigns and formal research are usually unaffordable, so the firm needs cheaper, more creative methods. |
| Small size | Smallness leads to a low market share and a lack of marketing power. | The firm cannot outspend competitors, so it has to out-think them: focus on a segment it can serve better than anyone else. |
| Not known to the customer | New ventures are unknown entities, so customers lack trust in their abilities and offerings. | Early marketing must build trust and recognition, which is why branding, recommendations and word of mouth matter so much. |
A strategic approach to marketing used by start-ups and small businesses. It involves the innovative and proactive use of marketing techniques to identify and capitalise on emerging opportunities, often with limited resources.
The lecture suggests the clearest way to understand entrepreneurial marketing is to set it against traditional marketing. Stokes (2000) compares the two on four principles. Traditional marketing starts with formal research into what the market wants and then develops products; entrepreneurial marketing often starts with an idea or innovation and estimates market needs intuitively.
Read the table as two ends of a range rather than a strict either/or. A growing venture will add formal tools such as the 4Ps and structured research as it gains resources, as the JD case later shows.
| Marketing principle | Traditional marketing | Entrepreneurial marketing |
|---|---|---|
| Concept | Customer-oriented and market-driven; product development follows market research. | Innovation-oriented and idea-powered; market needs are estimated intuitively. |
| Strategy | Top-down segmentation, targeting and positioning. | Bottom-up, aimed at customers and other important groups. |
| Methods | The marketing mix and the four Ps. | Collaborative marketing methods, using word-of-mouth marketing. |
| Market intelligence | Formalised research and intelligence systems. | Informal networking and information collection. |
“Bottom-up” means the venture starts from a few customers it knows well and grows outwards, instead of dividing a whole market from above.
To overcome limited capital, small size and anonymity, entrepreneurial firms must take a proactive approach to marketing. The lecture lists six features that reflect this approach.
Acting ahead of the market instead of reacting to competitors; the firm creates demand rather than waiting for it.
Using new ideas both in the offer and in the way it is marketed, because copying large firms’ methods is too expensive.
Staying close to a small group of customers and learning directly from them.
Spotting and exploiting emerging opportunities quickly, which a small firm can do faster than a large one.
Taking calculated risks and reducing them, for example by testing an idea on a small part of the market first.
Marketing is about creating value the customer recognises, not only about communicating an existing product.
Start the Individual Report’s marketing section by naming the constraints your venture faces in the new market (limited capital, small size, unknown to customers). Then justify each marketing choice as a response to them. This turns a generic marketing list into reasoning, which the rubric rewards.
Market research on a small budget
Before you can choose a segment you need to know who the customers are and what they need.
The process of obtaining information about an organisation’s target market and its customers: who they are and what they need. Any reliable information that improves a marketing decision counts as market research.
| Method | What it involves | Why a start-up might use it |
|---|---|---|
| Systematic observation | Watching how consumers buy in shops, or how customers actually use a product. | Cheap and shows real behaviour rather than what people say they do. |
| Focus group | A random or selected group of individuals discusses a topic the researcher is interested in. | Gives rich reasons behind customer choices; useful for testing a concept or a positioning idea. |
| Secondary sources | Information from published sources such as magazines, journals and statistical outlines. | Low cost; good for sizing a segment in a foreign market you cannot visit. |
| Test marketing | Releasing a product to a small part of the target market to see how customers react. | Reduces the risk of a full launch; fits the risk-management feature of entrepreneurial marketing. |
The lecture stresses the list is not exhaustive. Stokes (2000) adds that entrepreneurs gather much of their intelligence informally, through networks.
The Individual Report rubric gives 20% to Evidence. When you name a target segment, say how you know it exists and wants your product: secondary statistics about the target country, a planned test market, or information from your network. Name the method using the lecture’s terms.
Segmentation, targeting and positioning
A small firm cannot serve everyone. STP is the sequence for deciding whom to serve and what you want those customers to think of you.
Divide the market into groups with similar needs, choose the group(s) your product can serve better than competitors, then define the unique reason those customers should choose you.
- 1Segmentation
Divide the whole market into smaller groups that share one or more characteristics that give them similar product needs. The lecture’s bases are geographical location, age, gender, income and ethnicity.
Example — A sportswear retailer might segment by age and find a group of 13–20 year olds who wear sportswear as everyday fashion.
- 2Targeting
Match the product’s attributes to the benefits each segment seeks. Ask whether the product delivers the value the segment wants better than the competition, then judge attractiveness: can the segment be easily identified, is it large enough in potential revenue, and how easy is it to reach?
Example — JD’s key audience is 13–20 year olds, reachable quickly through radio advertising (The Times 100, 2011).
- 3Positioning
Express, in a statement, why a customer should buy your product rather than a competitor’s. Positioning rests on the product’s unique differentiating characteristics.
Example — A handbag maker positions itself as a luxury status symbol; a TV maker as the most innovative and cutting-edge; a fast-food chain as the provider of cheap meals.
Three positioning examples from the tutorial
- Positioned as a luxury status symbol.
- Supports a high, premium price and selective places of sale.
- Positioned as the most innovative and cutting-edge.
- Promotion stresses new features; early buyers may accept a skimming price.
- Positioned as the provider of cheap meals.
- Needs low costs so it can sustain economy pricing.
The tutorial’s video (Kauffman Founders School, 2014) explains that a positioning statement consolidates what you know about your customers, competitors, industry and product into one document. When founders ask friends, customers and employees what makes the product special, they often get many different answers. Trying to market everything to everybody ends up saying nothing, so the statement forces one clear message.
Building a positioning statement (Geoffrey Moore’s template, as presented by Anita Newton in the tutorial video)
- 1Target
List every segment that might want the product, prioritise them, and pick the one most likely to be interested.
- 2Problem
Describe the real pain that target customer feels, as specifically as possible.
- 3Product
State what your product or service is.
- 4Breakthrough capability
Say what makes it different and better: faster, cheaper, more effective or more efficient, described in the customer’s terms.
- 5Competition
Name what the customer currently uses instead, and compare yourself with it.
- 6Emotional benefit
Describe how using the product makes the customer feel.
The video suggests a simple grid: list the customer’s needs across the top, put an X under each need your product meets and describe how, then repeat the row for each major competitor. The gaps show your differentiating characteristics, and the competitor rows give you material for the competitor analysis the report also asks for.
Name the segment with at least two of the lecture’s bases (for example, age and income in a named city of the target country). Then answer the three targeting questions with evidence: how you will identify these customers, why the segment is large enough to be worth it, and how you will reach them. Finish with a one-sentence positioning statement.
Branding, the marketing mix and pricing
Once you know whom you serve and how you want to be seen, the brand and the 4Ps turn that position into concrete decisions.
A distinguishing name and/or symbol intended to identify the goods or services of one seller from those of competitors. It is a set of mental associations held by the customer that adds perceived value to a product or service.
How brands help the consumer
- Easier to identify at the point of sale.
- Helps in product evaluation.
- Communicates product features and benefits.
- Reduces risk in purchasing.
- Suggests quality.
Customers do not trust a venture they have never heard of. A brand that reduces purchasing risk and suggests quality is how a start-up builds the confidence and loyalty the lecture describes. That is why brand building sits inside entrepreneurial marketing, not after it.
The four key elements of a marketing strategy. Paying attention to all four maximises the chance that a product is recognised and bought. The JD reading describes the aim as the right product, sold in the right place, at the right price, with the most suitable promotion, all built around consumers’ needs.
The function and features of a good or service, including quality, design, after-sales service and branding.
Example — JD sells lifestyle sportswear, and its buying power leads manufacturers to make ranges exclusive to JD, such as adidas Forest Hills.
Depends on cost, required profit, competitor prices and what consumers will pay. Price directly generates income, so it must be seen as value for money relative to quality.
Example — JD keeps prices in line with rivals for branded goods and uses bulk buying to keep unit costs low.
Making products available to the customer in the most convenient way: locations, channels and the shopping experience.
Example — JD sells on the high street, in out-of-town locations, in shopping centres and online.
Creating awareness, interest and desire to buy; it can also create or change a brand image and maintain market share.
Example — JD mixes paid advertising with direct, below-the-line promotions such as email, competitions and celebrity events.
| Strategy | How it works | When it suits a venture |
|---|---|---|
| Price skimming | Set a high price at first and lower it over time. | A genuinely new product that early buyers value highly. |
| Penetration pricing | Start below competitors’ prices and raise them gradually once the product gains traction. | Introducing a new product into a competitive market, or gaining market share quickly. |
| Cost-plus pricing | Take the production cost and add a small percentage. | Simple to calculate when costs are well known. |
| Premium pricing | A high price builds perceived value; buyers are seeking high quality. | A brand positioned on quality or status. |
| Value-based pricing | Set the price according to the value customers perceive in the brand; charge as much as customers are willing to pay. | Ideal for subscription-based businesses. |
| Competitive pricing | Set the price based on what competitors charge. | Well-known products in high demand, where customers compare prices easily. |
| Economy pricing | Low overhead costs allow prices below competitors’. | A lean firm positioned on low price. |
The JD reading adds strategic pricing: pricing an exclusive product or brand to make it more desirable, generate demand or demonstrate value (The Times 100, 2011).
The tutorial slide says competitive pricing is “known as strategic pricing”, while the JD reading treats strategic pricing as a separate tactic for exclusive products. In your report, define the term you use in one clause and cite the source, so the marker knows which meaning you intend.
Name one pricing strategy and justify it from your positioning and the target segment’s income. A venture positioned as premium but priced for penetration sends a mixed message; if you plan to start with penetration and move up, say so and explain the trigger for raising prices.
Innovative promotion with limited resources
The report asks how you will “promote and advertise your business innovatively”. The JD reading and earlier module cases show a range of tools; the skill is choosing the ones a small firm can afford.
Above-the-line and below-the-line promotion (The Times 100, 2011)
- Promotion through advertising: TV, radio, internet, press.
- JD examples: adverts in high-circulation magazines, product placements, TV and radio; radio reaches its 13–20 year old audience quickly.
- Reaches a wide audience but can be costly, and response rates are hard to measure.
- Promotion other than advertising that communicates directly with consumers, e.g. price promotions and point-of-sale displays.
- JD examples: emails to its customer database, sales incentives and competitions, celebrity sponsorship and endorsement, arena partnerships, strong in-store displays.
- Because the contact is direct, it can be aimed at a chosen group, which suits a small budget.
JD’s term for paid outdoor advertising placed where its customers already are: poster sites, sides of public transport and areas of high footfall around key stores. JD also positions itself alongside professional football clubs through kit deals and ground advertising, which establishes the brand within local communities.
Stokes (2000) says entrepreneurial marketing relies on collaborative methods and word of mouth rather than the full 4Ps machinery. People trust recommendations from those around them, so a customer who talks about you does the promotion for you. The JD reading makes the same point about social media: consumer recommendations spread information, and it estimates that each person viewing a page may pass it on to another 150 people.
Earlier module cases show start-ups turning this into a deliberate strategy. Uber relied on word of mouth when launching in new cities and staged unusual events, such as kitten deliveries, to “give them a story to tell”. Airbnb built a referral programme that rewarded users with travel credit when a friend they invited made a first booking.
| Tool in the JD case | What JD did | Low-budget version for a new venture | Entrepreneurial marketing link |
|---|---|---|---|
| Partnership (co-promotion) | Partnered with adidas to offer VIP tickets to an exclusive music event. | Co-host an event or bundle offers with a complementary local business. | Collaborative methods; uses the network |
| Sponsorship | Kit deals and ground advertising with professional football clubs such as Blackpool FC. | Sponsor a community team or event your target segment attends. | Builds trust and local presence for an unknown firm |
| Endorsement | Celebrities and music artists promoted new ranges. | Recruit respected people within the target segment to use and talk about the product. | Word of mouth |
| Direct email | Regular promotions and product news to a customer database. | Collect contacts from the first customers and keep in touch at almost no cost. | Focus on the customers |
| Social media recommendations | Used consumer recommendations on social platforms. | Encourage customers to share; add a referral reward. | Word of mouth; proactive orientation |
| Store experience | Award-winning store design and eye-catching displays to increase footfall. | Make the point of sale (stall, pop-up, website) memorable and easy to use. | Innovativeness; value creation |
The left-hand columns are from The Times 100 (2011). The right-hand columns show how to apply the lecture’s ideas; they are suggestions, not facts from the case.
Avoid a generic list such as “social media and Google ads”. Choose two or three tools, name the target segment each one reaches, say why it fits your limited budget, and link at least one to your networks (Week 8). For example: a partnership with a named type of local business, a referral reward, and sponsorship of a community event the segment attends.
Reflecting with the Gibbs Reflective Cycle
The handbook schedules a formative session on Gibbs this week to prepare you for the reflection in the Individual Report, which is worth 30% of the marks.
A six-stage structure for learning from experience. Because it is a cycle, it suits repeated experiences: you learn from what went well or badly and plan for the next time.
- 1Description
Describe what happened in detail. Feelings and conclusions come later.
Example — What happened? When and where? Who was present and what did each person do? What was the outcome? Why were you there and what did you want to happen?
- 2Feelings
Explore your feelings and thoughts during the experience and how they may have affected it.
Example — What were you feeling before, during and after? What do you think others felt then and now? What do you think about the situation now?
- 3Evaluation
Judge what worked and what did not, as objectively and honestly as possible, covering both positives and negatives.
Example — What was good and bad? What went well and what did not? What did you and others contribute, positively or negatively?
- 4Analysis
Make sense of the situation by asking why things went well or poorly. This is the natural place to bring in academic literature.
Example — Why did things go well or badly? What knowledge, your own or from the literature, helps you understand it?
- 5Conclusion
Summarise what you learned and what you could have done differently; it should follow naturally from the earlier stages.
Example — What did I learn? How could it have been more positive for everyone? What skills do I need to develop? What else could I have done?
- 6Action plan
Plan what you will do differently in a similar situation, and how you will make sure it actually happens.
Example — What would I do differently next time? How will I develop the skills I need? How can I make sure I act differently?
What the handbook asks the reflection to cover
- Your learning throughout the module, based on the Gibbs Reflective Cycle.
- The case studies discussed in tutorials and how they helped you complete the report.
- Difficulties you encountered and lessons learned.
- Steps you will take to improve your learning and performance in similar future tasks.
A common weakness is spending most of the words on Description and Feelings. The top rubric band asks for “deep insight into learning and clear future strategies”, which come from Analysis, Conclusion and Action plan. Keep description brief and bring module theory into the Analysis stage.
Anchor each stage in something specific you did: the JD marketing mix discussion, the positioning statement exercise, the COIL pitch or the feasibility work. Then say exactly how that experience shaped a section of your report, for example how the JD case changed the way you chose your promotion tools.
Tutorial activities
JD: creating a winning marketing mix
Read the JD case (The Times 100, 2011). JD was founded in 1981 in Mossley, Manchester, with a single shop and grew to 335 stores as the UK’s leading retailer of fashionable sports and casual wear, expanding organically for 20 years. Discuss the three tutorial questions in your group.
- 1.Reflect on your learning on sources of finance and the use of venture capital funding for expansion. What are the pros and cons of expanding organically, and of expanding using venture capital funding?
- 2.Evaluate JD’s pricing strategies and how effective they are in boosting sales.
- 3.Examine JD’s positioning strategy and explain how it has given JD a competitive edge in the industry.
Writing a positioning statement
Watch the positioning statement video linked in the tutorial slides (Kauffman Founders School, 2014). Then draft a positioning statement for the venture you plan to take abroad in your Individual Report.
- 1.Who is your single priority target segment in the new market? Describe it using at least two segmentation bases.
- 2.What specific problem does that customer have, and what does your product do about it?
- 3.What is your breakthrough capability, and who or what is your competition?
- 4.What emotional benefit will customers feel?
- 5.Combine the answers into one positioning statement and test it: is it clear, easy to understand, and does it show how you are different from and better than competitors?
Case questions from the JD reading
The JD reading ends with four questions. Answer them briefly as self-study practice for the marketing section of your report.
- 1.Using an example of a product known to you, describe the four main elements of its marketing mix.
- 2.Explain why an organisation would use “ambient marketing”.
- 3.Analyse how an organisation manages the place element within the marketing mix.
- 4.Evaluate why organisations use the marketing mix to position their products within the minds of consumers.
Assignment 2 briefing: practising the Gibbs Reflective Cycle
The final part of the tutorial (Part 3) briefs you on the Individual Report and introduces the Gibbs Reflective Cycle for its reflection section. Choose one module experience so far (a tutorial case discussion, the COIL pitch, or preparing the Learning Diary) and draft a short reflection using all six stages.
- 1.Description: what happened, when and where, who was involved, and what was the outcome?
- 2.Feelings: what were you feeling and thinking before, during and after?
- 3.Evaluation: what went well, what did not, and what did you and others contribute?
- 4.Analysis: why did things go well or badly, and which module theories help explain it?
- 5.Conclusion: what did you learn, and what skills do you need to develop?
- 6.Action plan: what will you do differently next time, and how will you make sure you do it?
Cases
Key terms
- Entrepreneurial marketing
- The innovative and proactive use of marketing techniques by start-ups and small firms to identify and capitalise on emerging opportunities, often with limited resources.
- Traditional marketing
- Customer-oriented, market-driven marketing that uses top-down STP, the 4Ps and formal research systems (Stokes, 2000).
- Market research
- Obtaining information about the target market and its customers: who they are and what they need. Any reliable information that improves a marketing decision.
- Test marketing
- Releasing a product to a small part of the target market to see how customers react before a full launch.
- Segmentation
- Dividing a market into smaller groups that share characteristics giving them similar product needs, e.g. by location, age, gender, income or ethnicity.
- Target market
- The segment chosen because the product delivers the value it seeks better than competitors, and it is identifiable, large enough and reachable.
- Positioning
- The unique differentiating characteristics that explain why a customer should buy your product rather than a competitor’s, expressed as a positioning statement.
- Brand
- A distinguishing name and/or symbol that identifies one seller’s goods or services and adds perceived value through customers’ mental associations.
- Marketing mix (4Ps)
- Product, price, place and promotion: the four key elements of a marketing strategy.
- Penetration pricing
- Entering below competitors’ prices to gain market share quickly, then raising prices once the product gains traction.
- Above-the-line / below-the-line
- Above-the-line is advertising through mass media; below-the-line is direct promotion other than advertising, such as price promotions and point-of-sale displays.
- Ambient marketing
- JD’s term for outdoor advertising (posters, transport sides) placed in high-footfall areas where customers already are.
- Organic growth
- Growth through the expansion of a firm’s own sales rather than through mergers or takeovers.
- Gibbs Reflective Cycle
- A six-stage reflection structure (description, feelings, evaluation, analysis, conclusion, action plan) developed by Gibbs in 1988.
Check your understanding
According to Stokes (2000), how does entrepreneurial marketing approach strategy?
Flashcards
References and sources
As cited in the module materials. Check each against the original before using it in an assignment.
- Gibbs, G. (1988) Learning by doing: a guide to teaching and learning methods. Oxford: Further Education Unit, Oxford Polytechnic.
- Kauffman Founders School (2014) Entrepreneurial marketing: modern marketing strategy [Video]. YouTube. Available at: https://youtu.be/yeIM5IxvY-o
- Stokes, D. (2000) ‘Putting entrepreneurship into marketing: the processes of entrepreneurial marketing’, Journal of Research in Marketing and Entrepreneurship, 2(1).
- The Times 100 (2011) Creating a winning marketing mix: JD Sports. The Times 100 and Wilson and Wilson Publishing Ltd. Available at: www.thetimes100.co.uk
- Zucchella, A., Hagen, B. and Serapio, M.G. (2018) International entrepreneurship. Cheltenham: Edward Elgar.
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