Entrepreneurial Marketing CBMED6T06

Syllabus topics (RTMNU)

• Introduction to Entrepreneurial Marketing: Meaning
• Characteristics
• Functions
• Marketing Challenges
• Marketing Mix
• Identifying entrepreneurial marketing opportunities
• Market research
• Demand forecasting

Meaning of Entrepreneurial Marketing

Entrepreneurial marketing (EM) is the marketing done by new and small firms (and by innovative units of big firms) with limited money, using creativity, risk-taking and close contact with customers to find and use market opportunities.

In simple words, traditional marketing studies the market first and then plans; entrepreneurial marketing often acts first, tests ideas cheaply and learns from customers. Example: a Nagpur orange-barfi maker selling first on Instagram and WhatsApp before opening a shop.

Characteristics

1. Proactive – the firm acts before competitors and shapes the market.
2. Opportunity-focused – always looking for unmet needs and gaps.
3. Innovation-led – new products, new ways of selling or communicating.
4. Calculated risk-taking – risks are reduced by small tests and partnerships.
5. Resource leveraging – doing more with less: borrowing, sharing, bartering, using free tools.
6. Customer intensity – close, personal relationships with customers.
7. Value creation – new combinations of resources to create value for customers.
8. Networking – uses personal contacts, suppliers and communities.

Functions

1. Opportunity identification – spotting a need or problem worth solving.
2. Market research – collecting information about customers and competitors.
3. Product development – designing the product or service around customer feedback.
4. Pricing – fixing prices that cover cost and attract early buyers.
5. Promotion – low-cost communication: social media, referrals, events.
6. Distribution – choosing channels such as online marketplaces, retailers or direct sale.
7. Customer relationship building – getting repeat purchases and referrals.
8. Brand building – creating a name customers trust.

Marketing Challenges for Entrepreneurs

1. Limited finance – cannot afford TV or newspaper ads.
2. No brand recognition – customers do not know or trust a new name.
3. Lack of market information – little data about demand.
4. Strong competition – from big firms with economies of scale.
5. Limited skills – the owner does everything, often without marketing training.
6. Distribution problems – retailers prefer known brands; high margins demanded.
7. Fast-changing technology and customer tastes.
8. Uncertainty – new products have no sales history.

Marketing Mix

The marketing mix is the set of controllable tools a firm uses to get the desired response from its target market. The 4 Ps (E. Jerome McCarthy) are:

1. Product – what is offered: quality, design, features, brand, packaging. For a start-up: a minimum viable product (MVP) improved through feedback.
2. Price – the amount the customer pays; start-ups use penetration, value or freemium pricing.
3. Place – how the product reaches customers: online, direct, through dealers.
4. Promotion – communication: social media, influencers, word of mouth, events.

For services, 3 more Ps are added: People, Process and Physical evidence (7 Ps).

Identifying Entrepreneurial Marketing Opportunities

A marketing opportunity is an area of buyer need that a firm can profitably satisfy. Sources:

• Unmet needs and problems – e.g. lack of clean drinking water led to water-purifier start-ups.
• Changes in technology – UPI created opportunities for small digital payment and lending firms.
• Changes in society and lifestyle – working couples created demand for food delivery and ready-to-cook foods.
• Government policies – Startup India, Make in India, PLI schemes.
• Gaps in existing products – poor service or high prices by current sellers.

Steps: scan the environment → generate ideas → screen ideas → test with a few customers → evaluate size and profit → act.

Market Research

Market research is the systematic collection, recording and analysis of data about customers, competitors and the market to make better marketing decisions.

Steps: (1) define the problem; (2) plan the research; (3) collect data – primary (surveys, interviews, observation, focus groups) and secondary (government reports, trade journals, websites); (4) analyse data; (5) report findings and act.

Low-cost methods for entrepreneurs: Google Forms surveys, talking to customers, studying competitors' websites and reviews, test-selling at exhibitions or on Amazon/Meesho.

Demand Forecasting

Demand forecasting means estimating the future demand for a product for a given period, based on past data and expected conditions.

Importance: planning production, purchase of materials, finance, staffing, pricing and expansion.

Methods:

1. Survey of buyers' intentions – asking customers what they plan to buy.
2. Expert opinion / Delphi method – experts give forecasts in rounds until they agree.
3. Sales force opinion – salespersons estimate demand in their areas.
4. Trend analysis – projecting past sales into the future.
5. Test marketing – selling in a small area first.
6. Analogy – for new products, using the sales pattern of similar products.

Likely exam questions

1. (Long, 8/16 marks) What is entrepreneurial marketing? Explain its characteristics and functions.
2. (Long, 8/16 marks) Explain the marketing challenges faced by entrepreneurs. How can they identify marketing opportunities?
3. (Short, 4 marks) Distinguish between traditional marketing and entrepreneurial marketing.
4. (Short, 4 marks) What is the marketing mix?
5. (Short, 4 marks) State the methods of demand forecasting.

Syllabus topics (RTMNU)

• Concept of Enterprise Growth
• Forms, types, structures of organisational growth
• Growth Objectives
• Operative and strategic targets
• Growth Analysis
• Portfolio analysis
• SWOT-analysis
• Raising entrepreneurial finance

Concept of Enterprise Growth

Enterprise growth means an increase in the size and strength of a business over time – in sales, profits, assets, employees, products, markets or market share.

Measures of growth: sales turnover, number of employees, total assets, profit, market share, number of branches/outlets, number of products. Example: Haldiram's grew from one Bikaner shop to a national FMCG brand.

Why firms grow: economies of scale, higher profit, survival against competition, prestige, wider market, attracting investors and talent.

Forms, Types and Structures of Organisational Growth

Forms (by method):

1. Internal (organic) growth – growth using the firm's own resources: new products, new outlets, more capacity.
2. External (inorganic) growth – mergers, acquisitions, takeovers.
3. Co-operative growth – joint ventures, strategic alliances, franchising, licensing.

Types (by direction):

• Expansion – more of the same product in the same market.
• Diversification – adding new products or new markets (related or unrelated).
• Vertical integration – backward (towards suppliers) or forward (towards customers).
• Horizontal integration – joining firms at the same stage.
• Geographical growth – local → regional → national → international.

Structures as the firm grows: (1) simple structure – owner controls all; (2) functional structure – departments for production, marketing, finance; (3) divisional structure – divisions by product or region; (4) matrix structure – project and functional managers together; (5) network structure – core firm with outsourced partners.

Growth Objectives

Growth objectives are the goals a firm sets for its growth. They should be SMART – Specific, Measurable, Achievable, Relevant and Time-bound.

1. Market objectives – increase market share, enter new markets.
2. Financial objectives – increase sales, profit, return on investment.
3. Product objectives – launch new products, improve quality.
4. Resource objectives – more capacity, technology, skilled staff.
5. Social objectives – employment, community development.

Example: "Increase sales from ₹50 lakh to ₹80 lakh and open 3 new outlets in Vidarbha within two years."

Operative and Strategic Targets

Operative targets must add up to the strategic target, so progress can be checked regularly.

Growth Analysis

Growth analysis is the study of the firm's present position, past growth and future potential to choose the right growth path. It includes:

• Analysis of past sales, profit and market share trends (growth rate = (current − previous) ÷ previous × 100).
• Gap analysis – the gap between the desired target and the expected position if nothing changes.
• Environment analysis (PESTEL) and competitor analysis.
• Resource analysis – money, people, technology.
• Portfolio and SWOT analysis (below).

Example: sales rose from ₹40 lakh to ₹50 lakh, so growth rate = 10 ÷ 40 × 100 = 25%.

Portfolio Analysis (BCG Matrix)

Portfolio analysis evaluates all the products or business units of a firm to decide where to invest, hold or withdraw. The best-known tool is the Boston Consulting Group (BCG) matrix, based on market growth rate and relative market share.

The GE–McKinsey matrix (industry attractiveness vs business strength, 9 cells) is another portfolio tool.

SWOT Analysis

SWOT analysis studies a firm's internal Strengths and Weaknesses and external Opportunities and Threats.

Example for a small Nagpur website-design start-up: S – low cost, quick service; W – no brand, small team; O – many shops going online, export clients; T – free website builders, big agencies.

Uses: matching strengths with opportunities (SO strategy), using strengths to face threats, removing weaknesses, and avoiding danger zones (WT).

Raising Entrepreneurial Finance

Growth needs money. Sources for Indian entrepreneurs:

1. Own funds / bootstrapping – savings and reinvested profits.
2. Family and friends.
3. Bank loans – term loans and working capital; government schemes like PMMY (MUDRA), Stand-Up India, and the CGTMSE credit guarantee (check latest limits).
4. Angel investors – wealthy individuals investing in early start-ups for equity.
5. Venture capital – funds investing in high-growth firms (e.g. SIDBI's Fund of Funds for Startups).
6. Crowdfunding – small amounts from many people online.
7. Private equity and IPO – for grown firms; SME platforms of NSE (Emerge) and BSE.
8. Government grants – Startup India Seed Fund Scheme, state start-up policies.
9. Trade credit and leasing.

Likely exam questions

1. (Long, 8/16 marks) What is enterprise growth? Explain its forms, types and organisational structures.
2. (Long, 8/16 marks) Explain portfolio analysis (BCG matrix) and SWOT analysis as tools of growth analysis.
3. (Short, 4 marks) Distinguish between strategic and operative targets.
4. (Short, 4 marks) State the growth objectives of an enterprise.
5. (Short, 4 marks) State any four sources of entrepreneurial finance.

Syllabus topics (RTMNU)

• Growth Strategies - concept and forms
• Internal, External and Co-operative growth strategies
• Growth models: the life-cycle and Phase model
• The integrated life-cycle model (evolutionary)
• Greiner's growth model (revolutionary)
• The complexity management (process) model

Growth Strategies: Concept and Forms

A growth strategy is a long-term plan by which a firm increases its sales, market share, products or markets.

Ansoff's Product–Market Growth Matrix gives four forms:

By method of growth, strategies are internal, external and co-operative.

Internal Growth Strategies

Internal (organic) growth uses the firm's own resources and profits.

• Increasing capacity, opening new branches, launching new products, entering new markets, improving technology, R&D.

Merits: full control, lower risk, builds own skills and culture. Demerits: slow, limited by own funds. Example: D-Mart opening its own stores one by one.

External Growth Strategies

External (inorganic) growth is growth by combining with or buying other firms.

1. Merger – two firms join to form one (e.g. HDFC Ltd merged into HDFC Bank, 2023).
2. Acquisition / takeover – one firm buys control of another (e.g. Tata Motors acquiring Jaguar Land Rover, 2008).
3. Horizontal, vertical and conglomerate combinations.

Merits: fast growth, instant market share, technology and brands. Demerits: costly, cultural clashes, integration problems, legal approvals (Competition Commission of India).

Co-operative Growth Strategies

Co-operative growth means growing by working with other firms while keeping separate identity.

1. Joint venture – two firms create a new jointly owned company (e.g. Maruti Suzuki began as a JV).
2. Strategic alliance – agreement to share resources without a new company (e.g. co-branded credit cards).
3. Franchising – franchisee uses the brand and system for a fee (e.g. Amul parlours, Domino's).
4. Licensing – permission to use a patent, trademark or technology for royalty.
5. Clusters and co-operatives – small units sharing facilities and marketing.

Growth Models: The Life-cycle and Phase Model

Growth models explain the stages a firm passes through as it grows. The life-cycle model compares a firm to a living being: birth (start-up) → growth → maturity → decline or renewal.

• Start-up: owner does everything; focus on survival and finding customers.
• Growth: sales rise fast; staff, systems and finance needed.
• Maturity: sales stable; competition high; focus on efficiency.
• Decline / renewal: sales fall unless the firm innovates.

Phase models divide growth into clear phases with typical problems. A well-known example is Churchill and Lewis (1983): Existence → Survival → Success → Take-off → Resource maturity. Each phase needs different management styles, structures and goals.

The Integrated Life-cycle Model (Evolutionary)

The integrated life-cycle model sees growth as evolutionary – a gradual, continuous development in which the firm's strategy, structure, systems, people and culture change together through the stages of the life cycle. It "integrates" the product life cycle, market development and organisational development into one picture.

Key ideas: growth is smooth and step-by-step; each stage builds on the previous one; management adapts slowly; the model helps plan what the firm will need at the next stage (e.g. professional managers, more capital).

Limitation: real firms do not always grow smoothly – they face sudden crises, which Greiner's model explains.

Greiner's Growth Model (Revolutionary)

Larry Greiner (1972) said that firms grow through periods of calm evolution, each ending in a revolution (crisis). Solving each crisis takes the firm to the next phase.

Greiner later added a 6th phase: growth through alliances (extra-organisational solutions).

Lesson for entrepreneurs: crises are normal; the owner must change management style as the firm grows.

The Complexity Management (Process) Model

The complexity management model sees growth as a process rather than fixed stages. As a firm grows, its complexity increases – more products, customers, staff, locations, suppliers and information. Growth succeeds only if the firm builds matching capacity to manage this complexity.

Main ideas:

1. Growth increases internal and external complexity.
2. Managers must reduce unnecessary complexity (standard processes, simple product range) and absorb the necessary complexity (better systems, IT, trained people, delegation).
3. Growth is a continuous cycle: grow → complexity rises → build systems → stabilise → grow again.

Example: a restaurant opening its fifth outlet needs standard recipes, central purchasing and billing software to stay in control.

Likely exam questions

1. (Long, 8/16 marks) Explain internal, external and co-operative growth strategies with merits and demerits.
2. (Long, 8/16 marks) Explain Greiner's growth model. How does it differ from the integrated life-cycle model?
3. (Short, 4 marks) Explain Ansoff's product–market growth matrix.
4. (Short, 4 marks) What is the life-cycle model of enterprise growth?
5. (Short, 4 marks) Write a short note on the complexity management model.

Syllabus topics (RTMNU)

• Positioning
• Segmentation
• Targeting
• Entrepreneurial communication strategy
• Entrepreneurial pricing strategy
• Entrepreneurial distribution strategy
• Building customer relationships
• Marketing plan

Segmentation

Market segmentation is dividing a large market into smaller groups of buyers with similar needs, so that each group can be served with a suitable marketing mix.

Bases of segmentation:

1. Geographic – region, city, rural/urban, climate.
2. Demographic – age, gender, income, education, occupation, family size.
3. Psychographic – lifestyle, personality, values.
4. Behavioural – benefits sought, usage rate, loyalty, occasion.

Benefits for entrepreneurs: a small firm cannot serve everyone; segmentation helps find a niche where big firms are weak. Example: organic baby food for urban working parents.

Targeting

Targeting is choosing one or more segments to serve. Strategies:

• Undifferentiated – one offer for the whole market.
• Differentiated – different offers for different segments.
• Concentrated (niche) – focus on one segment; best for start-ups with few resources.
• Micro-marketing – local or individual marketing.

A good target segment is measurable, large enough to be profitable, reachable and matches the firm's strengths.

Positioning

Positioning is creating a clear, distinct and desirable place for the product in the minds of target customers compared with competitors.

Steps: identify possible advantages → choose the right ones (unique selling proposition) → state a positioning statement → communicate it consistently.

Bases: price/quality ("value for money"), benefit ("kills 99.9% germs"), user ("for students"), use/occasion, against competitors. Example: Paper Boat positioned on nostalgia – "drinks and memories".

Entrepreneurial Communication Strategy

This is how a new firm informs and persuades customers with little money. Tools:

1. Word of mouth and referrals – satisfied customers tell others; referral rewards.
2. Social media marketing – Instagram, YouTube, Facebook, WhatsApp Business.
3. Content marketing – useful blogs, videos, tips that attract customers.
4. Influencer marketing – local or micro-influencers.
5. Guerrilla marketing – low-cost, surprising, creative campaigns in public places.
6. Public relations – local news stories, events, start-up competitions.
7. Personal selling and networking – trade fairs, exhibitions, business groups.
8. Search engine optimisation and Google Business Profile listing.

Ads and influencer posts must not mislead (Consumer Protection Act, 2019 and ASCI guidelines).

Entrepreneurial Pricing Strategy

1. Penetration pricing – low price to enter the market quickly and win customers.
2. Skimming pricing – high price for an innovative product, lowered later.
3. Value-based pricing – price based on value seen by the customer.
4. Cost-plus pricing – cost + fixed margin. Example: cost ₹80 + 25% margin = ₹100.
5. Freemium – basic version free, paid premium (apps and software).
6. Psychological pricing – ₹99 instead of ₹100.
7. Bundle pricing – products sold together at a lower total price.
8. Subscription pricing – fixed monthly or yearly payment.

Entrepreneurial Distribution Strategy

Distribution is getting the product to the customer at the right place and time.

• Direct channel – own shop, own website, D2C (direct-to-consumer) brands.
• Indirect channel – wholesalers, distributors, retailers.
• Online marketplaces – Amazon, Flipkart, Meesho; and the government's ONDC network and GeM portal for selling to government.
• Quick-commerce and delivery partners.
• Franchising and agents for expansion.
• Omnichannel – combining online and offline.

Choice depends on product type, customer location, cost, control needed and competition.

Building Customer Relationships

Customer Relationship Management (CRM) is the process of building and keeping profitable customer relationships by delivering superior value and satisfaction.

Ways: personal attention and quick service; loyalty programmes and discounts for repeat buyers; collecting feedback and acting on it; after-sales service; personalised messages on birthdays/festivals; customer communities; simple CRM software or even a WhatsApp customer list.

Why it matters: keeping an old customer costs less than getting a new one; loyal customers buy more and refer others.

Marketing Plan

A marketing plan is a written document stating the firm's marketing objectives and the strategies and actions to achieve them in a given period.

Contents:

1. Executive summary.
2. Situation analysis – market, customers, competitors, SWOT.
3. Marketing objectives – SMART targets (e.g. sales of ₹30 lakh in year 1).
4. Target market and positioning.
5. Marketing mix strategies – product, price, place, promotion.
6. Action programme – who does what and when.
7. Budget – expected sales, costs and profit.
8. Control – how progress is measured and corrected.

Likely exam questions

1. (Long, 8/16 marks) Explain segmentation, targeting and positioning as entrepreneurial market development strategies.
2. (Long, 8/16 marks) Explain entrepreneurial pricing and distribution strategies.
3. (Short, 4 marks) What is entrepreneurial communication strategy?
4. (Short, 4 marks) How can an entrepreneur build customer relationships?
5. (Short, 4 marks) State the contents of a marketing plan.