Monday, December 21, 2009

Useful Startup Marketing Concepts: The Short List

In my post Myths About Marketing, I promised to present my short list of the most useful marketing concepts and framework for startups.  So here it is along with brief descriptions.  To put the evolution of ideas into context, I've listed the "inventor" and year of introduction, as best I've been able to determine.  Corrective comments are welcome.

Basic Marketing Concepts 
  • 4Ps Marketing Mix (Neil Borden 1953, E. Jerome McCarthy 1960) - The foundation of all marketing strategy.  The 4Ps are product, price, promotion, and place (channel).
  • Marketing Segmentation (Wendell Smith 1956) - The concept that markets are not homogeneous but are made up of distinct, separate niches.
  • Positioning1 (Al Ries & Jack Trout 1969) - The concept that a company or brand should have a distinct identity compelling to its target customers.
Competitive Strategy
  • 3Cs (late-1950's/early-1960's?) - The 3Cs are customer, competition, and company.  Combined with the 4Ps, they form the basis for competitive strategy.  Consultants have since expanded this to 7Cs, but honestly, I haven't found the expansion to add much, except confusion, to the original.
  • SWOT Analysis (Albert Humphrey 1960's) - A framework that analyzes a company's Strengths, Weaknesses, Opportunities, and Threats relative to the competition.
  • Five Forces Analysis2 (Michael Porter 1980) - A framework that looks at an industry's competitive dynamics and the implications for a company's strategy.  The five forces are rivalry, barriers to entry, threat of substitutes, supplier power, and buyer power.
  • Value Disciplines3 (Michael Treacy & Fred Wiersema 1995) - A concept that asserts that for a company to dominate its industry, it must focus its resources to create unfair advantage in one of three areas:  product leadership, operational excellence, or customer intimacy.
Product Planning & Management
  • Product Life Cycle Theory (Raymond Vernon 1966)  - The concept that new products progress through different life phases of introduction, growth, maturity, and decline.  The phase in which the product resides affects the competitive strategy.
  • BCG Product Portfolio Matrix (Bruce Henderson 1968) - A framework developed by the Boston Consulting Group for looking at a portfolio of products.  Products are classified into a two-dimensional grid with relative market share on one axis and growth rate on the other as either cash cows, stars, dogs, and question marks.  Internal resources are supposed to be allocated between products in the portfolio in accordance with their classification.
  • Gartner Hype Cycle (Jackie Fenn 1995) - A concept developed by the Gartner Group describing the technology adoption cycle in terms of awareness.  The hype cycle states that all technologies go through the stages of technology trigger, peak of inflated expectations, trough of disillusionment, slope of enlightenment, and plateau of productivity.  Where your industry is in the hype cycle has implications for strategy.
Product/Customer Fit
  • Diffusion of Innovations4 (Everett Rogers 1962) - A framework categorizing customers by their willingness to adopt new ideas, technologies, and products.  Customers are classified as innovators, early adopters, early majority, late majority, and laggards with appropriate implications for strategy.
  • Economic Buyer Model5 (Robert Miller & Stephen Heiman 1970's) - A framework that identifies buying roles in a complex selling situation such as that commonly found in business-to-business sales.  The roles are economic buyer, specifier, consultant, vetoer, and gatekeeper.
  • Crossing the Chasm6 (Geoffrey Moore 1991) - A framework that focuses on the transition from early adopter to early majority customers per the Diffusion of Innovations framework.
  • Customer Development7/Lean Startup (Steve Blank 2005, Eric Ries 2008?) - A methodology used to facilitate customer/product fit and the development of a repeatable sales process for acquiring customers via rapid, iterative prototyping and feedback.  The methodology focuses on the innovator and early adopter stages of the Diffusion of Innovations framework.

1.  Ries, Al and Trout, Jack, Positioning:  The Battle for Your Mind, New York: McGraw-Hill, 1981.
2.  Porter, Michael, Competitive Strategy, New York: Free Press, 1980.
3.  Treacy, Michael and Wiersema, Fred, The Discipline of Market Leaders, New York: Harper Collins, 1995.
4.  Rogers, Everett, Diffusion of Innovations, New York: Free Press, 1962.
5.  Miller, Robert and Heiman, Stephen, Strategic Selling, William Morrow, 1985.
6.  Moore, Geoffrey, Crossing the Chasm, New York: Harper Collins, 1991.
7.  Blank, Steven, The Four Steps to the Epiphany,, 1995.

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