On Tuesday night Silicon Flatirons hosted a Crash Course on “Marketing for Web-based Startups,” featuring Leeds School of Business Assistant Professor of Marketing Laura Kornish. Professor Kornish teaches both the Product Strategy and Marketing of High Technology classes at the business school, and had the formidable task of boiling down a term’s worth of material into the ninety minute session.
Kornish began by making a distinction between marketing strategy and marketing activities, emphasizing the importance of determining the former before embarking on the latter. She identified marketing strategy as “defining what you are providing to whom and why they would want it.” Of critical importance in this decision is identifying the characteristics of your core customer, which is often done through market segmentation. This process requires that a business’ potential clients be targeted or grouped on the basis of demographics, behavior, attitude, and/or profession, so a picture emerges of who is most likely to buy or use the product. For example, a company selling virtual Facebook gifts might recognize its target customer as ‘fourteen year old girls who text incessantly, have reduced the English language into a series of cryptic acronyms, and like to chew gum.’ The second element to developing a marketing strategy is creating a positioning statement, concise verbiage that “explains how the company (or product) is better than competitors.” While sharing elements with a tagline or branding message, the positioning statement is meant primarily for internal purposes to help the company understand its competitive advantage. To use the virtual Facebook gift company as an example, a positioning statement might be, “We carry an aspirational line of virtual products – such as make-up and automobiles – while the rest of the competitive set is catering to the age-appropriate desires of the female pre-teen market.”
With a strategy in place a company is now prepared to consider marketing activities, commonly referred to as the “four Ps”. Consideration of each of these activities should consistently reference the strategy, keeping in mind the core customer and competitive advantage:
- Product: What does the company offer its customers, and what features should it include? If Netflix caters to middle age professionals, should they expand into video games or attempt to bolster their inventory of recent DVD titles?
- Price: For anyone who has paid four dollars for a cup of coffee, it will come as no surprise that price is part of the marketing package. Kornish effectively used the example of Apple deciding that, upon launching iTunes, 99 cents a song was an acceptable cost to its core customer.
- Place: Where is the product available? Depending upon the strategy distribution channels can be very important, as the perception of the product or service can be impacted by the perception (or reputation) of the reseller (e.g. Wal-Mart versus Nordstrom).
- Promotion: How, and where, is the marketing message communicated? If marketing over the web there are myriad resources available to locate platforms that cater to one’s specific customer group.
Kornish ended the evening with a few words on SEO, or Search Engine Optimization, which has become an obsession of sorts for web-based marketers. SEO is a tactic by which a company attempts to improve its position among search results when a term or phrase is typed into Google, or another search engine. Yet instead of offering tricks or shortcuts to improve position, Kornish once more emphasized strategy: What key words both represent the product as well as resonate with the core customer? Identification of these keywords – and then leading with them on the website – will likely drive more web traffic than attempting to fool Google.
Know your customer. Know what you do for them better than anyone else. Let this knowledge drive your decision making in determining the features of the product, where it is sold, how the message is communicated, and its price point. Technology may have changed enormously over the last fifteen years, but the fundamentals of marketing have largely stayed the same.
Silicon Flatirons, in administering the CU New Venture Challenge (CUNVC), will be hosting a number of programs, crash courses and workshops leading up to the final competition, held the week of April 13-17. The next event, entitled “Writing a Business Plan: Promoting your Business,” will be held on February 5th. Application for competition must be submitted by March 2nd, and every team must include at least one member with a CU ID. More information can be found at www.cunvc.org.
