Enterprise Marketing: Notes | Entrepreneurship Class 12 - Commerce PDF Download

Introduction

In the earlier chapters, we discussed about an entrepreneur's journey to identify a viable business opportunity and prepare an effective business plan to ensure a sense of direction to the project he or she has undertaken. It should be noted that the initial phase of an entrepreneur's business project is very critical and complex to handle. The reason is that there are a lot of unforeseen situations and events which he or she would not have thought of but they do come. This means that an effective business plan will not be sufficient work for the success of the project but a more scientific approach is required to overcome the hurdles that might come in his or her way. The most important of all of this is marketing. The success of marketing effort will determine the height of success of the business venture.
In this chapter, we will discuss about enterprise marketing which a more scientific and organized approach to the marketing effort. There two words included in this concept "Enterprise" and "Marketing". The word enterprise means a project or venture which involves some complexity and risk. The word marketing means activities of the organization associated with buying, selling, distributing, promoting the product or services of the company. Hence, enterprise marketing is a broader concept which aligns the marketing efforts with overall business strategy and gives a more scientific approach to the marketing. Marketing is known to be an art of developing a product and selling it in the market while enterprise marketing is science which seeks to develop processes which could fill the gap between the developments of product and selling it in the market. These processes may be in the form of Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) etc.
You must be wondering what relation does enterprise marketing has with entrepreneurs. The answer is very simple; entrepreneurs want to launch a product or service which involves complexity and element of risk. Enterprise marketing reduces the level of complexity and risk and gives a clear cut direction in the form of systems and processes which would help to achieve broad business objectives. As said earlier, enterprise marketing is over and above business plan as a business plan gives a strategic direction to the business while enterprise marketing provides tactical and more details plans to achieve objective.

Goals of Business, Goal Setting, Smart Goals

The goal of the business is derived from the broad business strategy. For example, if the strategy of the business is to attain 30% profit margin in next 3 years form current level of 15% then the goal should be set in terms of how much of sales should be achieved from different products or services to generate that margin. Also, it includes goal of minimizing cost which also contributes to the higher profit margin. In this section, we will concentrate on sales oriented goal as a component of enterprise marketing.

The Process of Goal Setting 
A goal setting is key to success. It applies to business; hobbies and life itself. Every successful entrepreneur is incredibly goal oriented. Successful entrepreneurs determine their goals and focus intensely on achieving them.
The goal setting process requires a written goal which defines what needs to be achieved and in what timeline it should be achieved. Entrepreneur should decide the destination where he needs to reach in a given timeline and then work back wards to align small steps with timelines which will help him reach the goal. No doubt, it is easier said than done process. You have to be very careful in devising an effective goal as there are many factors which will run you down along your journey and you have to have strategy to get out of those problems.
The goal process starts with thinking broad objectives, breaking it down to smaller interlinked objectives, assigning timelines to each objective, assigning resources to achieve them and monitoring the progress on achievement and disachievement of plans. It also involves taking corrective action if something planned did not work and some alternative has to be worked put so that the broad level goal remains on track.

Smart Goals 
One of the most important characteristics of a goal should be that it should be SMART goal which means Specific, Measurable, Attainable, Realistic and Timely. Entrepreneurs are expected to follow the principle of SMART goals to ensure an effective goal for the business.
The components of SMART goals are discussed as follows:

• Specific: Goal should be specific in the sense that it should clearly define the questions like who is involved in the goal achievement team, what accomplishment is projected in the goal, what is the timeline, what are the constraints or limitations. A specific goal always provides a sense purpose to the goal and sets the team in the right direction. For example, A general goal would be, "Get in shape." But a specific goal would say, "Join a health club and workout 3 days a week." 
• Measurable: Establish concrete criteria for measuring progress toward the attainment of each goal an entrepreneur sets for himself or herself. There is lot of benefits of a measurable goal as it helps in to measure progress, stay on track, reach target dates and experience the sense of achievement. A simple way to determine if goal is measurable is to ask questions such as how much? Flow many? Flow will I know when it is accomplished? 
• Attainable: When a goal is indented then an entrepreneur begins to figure out ways he or she can make them come true. For this purpose, he or she has to develop the attitudes, abilities, skills, and financial capacity to reach them. A goal is attainable when you have adequate resources available to achieve them and stepwise plan with time frame. Attainable does not mean you do not set aggressive goals but it should be backed by a very careful planning so that the difficult task is made look easier than what it looked like earlier. 
• Realistic: Realistic, means an objective toward which you are both willing and able to work. A goal can be both high and realistic. Entrepreneur should decide just how high his or her goal should be. But be sure that every goal represents substantial progress. A high goal is frequently easier to reach than a low one because a low goal exerts low motivational force. 
• Timely: An entrepreneur's goal should have a time frame. Without time frame tied to it there's no sense of urgency. If you want to lose 5 kg weight, you cannot say I will lose it someday. It has to be something like I want to lose my weight by (say) 15th June by doing exercise 2 hours a day. Time frame must be attached to the goal to make it stand firm. Also, time frame should be realistic keeping in view the changing scenarios which are predictable.

Branding-Business Name, Logo, Tag Line

When you look at an advertisement by Sony brand or Samsung brand or any other brand what impression do you get? You can relate these names with something of value and something you would wish to possess. This is what brand is all about. We feel good to have them and envy the people who already have it. This is what an entrepreneur should also do. He or she needs to ensure that the product or service on the offer should have some brand value. Branding is a key marketing strategy for an entrepreneur to be successful in a competitive market. It is required irrespective of size and nature of business you engage in.
A brand is entrepreneur's promise to the customer for a product or service which provides value and satisfaction. It tells them what they can expect from your products and services, and it differentiates your offering from your competitors'.

• Product Name: The process of brand creation involves the business name, product name, logo and tag line. The choice of business name or product name depends on the type of product and the category of customers associated to it. For example, if it is an electronic product meant for high end customers then the product name should be catchy, jazzy and appealing like "Samsung Galaxy", "Sony Bravia" etc. On the other hand if the product is meant for low end customers then it can be a common name which connects to the public like "Suvidha Services" or "Pragati Education" or "Nokia Asha" etc. 
• Logo: The product logo should display the product value and organization value attached to the product. To understand what a logo is, we first must understand what the main purpose of logos is. Entrepreneur must aim to make the logo immediately recognizable, inspiring trust, admiration, loyalty and an implied superiority. Paul Rand, one of the world's greatest designers states that "a logo is a flag, a signature, an escutcheon, a street sign. A logo does not sell (directly), it identifies. A logo is rarely a description of a business. A logo derives meaning from the quality of the thing it symbolizes, not the other way around. A logo is less important than the product it signifies; what it represents is more important than what it looks like. The subject matter of a logo can be almost anything."

A good logo is distinctive, appropriate, practical, graphic and simple in form. It conveys the owner's intended message. There are five principles for good logo which should be followed:
(i) Simple: A logo should be simple so that it is recognizable, versatile and memorable.
(ii) Memorable: This is very much like simplicity which automatically makes it memorable like McDonald's logo.
(iii) Timeless: A logo should have long shelf life and should not become redundant after 10, 20 or 50 years.
(iv) Versatile: The logo should have look and feel that it looks good both in print media, visual media and any other media for its promotion.

(v) Appropriate: A logo should be appropriate for the target audience or customers. For example, a child-like font and color scheme would be appropriate for a logo for a children's toy store, not so much for a law firm. 

• Tag Line: "Khayaal Aap Ka," (ICICI Bank) "Express Yourself" (Airtel) "Imagination a Work" (General Electric), "Connecting People" (Nokia) - these are just a few of the great taglines that have been used by some really big brands. A tag line connects the customers with brands. Entrepreneur must go for a tagline which connects to the customers as well as his own business philosophy.
  The following are the principles to be followed for a good tag line:
  (i) The Benefit: What your customers receive from you.
  (ii) The Value: What you're willingly offering your customers.
  (iii) The Experience: What your tag line conveys.
  (iv) The Feature: The product that's being pushed behind the slogan.
  (v) The Audience: The people in the market you're targeting.

For example, Airtel tag line "Express Yourself" is aimed the younger generation of India which should use airtel network for all their communication needs. This tag line attracts youngsters who will become customers of the brand for a long time and add to the brand value.

Promotion Strategy

Entrepreneur must come out with an integrated promotion strategy to ensure the market share of the product improves. The promotion strategy in its most basic form is communication with the perspective customers to educate them about the product feature and create a need in their mind to have it. Promotion strategy includes the following:
Advertising: It includes the process of dissemination of product information and feature through electronic or print media.
Packaging: Packaging provides a description of the packaging strategy. It includes any labels, trademarks or service marks should be included.
Public relations: Publicity strategy includes a list of media that will be approached as well as a schedule of planned events.
Sales promotions: It establishes the strategies used to support the sales message. This includes a description of collateral marketing material as well as a schedule of planned promotional activities such as special sales, coupons, contests, and premium awards.

Negotiations — Importance and Methods

Suppose you go out to buy a pair of shoes with your mother and reach a shop in your neighborhood. Your mother asks for the price of a pair of shoes then you get the reply that it is ₹ 850. Suddenly, you start walking away and the shop keeper asks how much you are willing to pay madam and the reply comes as ₹ 700. Shopkeeper says ₹ 800 and so on. At the end you buy the shoes for ₹ 750. You must have observed that the final price paid for the product was neither the one your mother was willing to pay (₹ 700) nor the one shopkeeper was willing to accept (₹ 850) but the deal has happened at a mutually agreeable price (₹ 750). This is what is called negotiations.
Negotiation is a process where the buyer and seller discuss the deal and arrive at mutually agreeable terms on price, quality, service etc so that neither party loses or gain too much in the end. The basic principle of negotiation is that you should be willing to give something to the buyer and also get something out his interest in your product.
An entrepreneur should have good negotiating skills which is an important part of carrying on the business. Negotiations are required for both buying and selling a product. However, in the context of this chapter, we will discuss it from seller's perspective so as how an entrepreneur can increase his or her sales through better negotiation skills.
The importance of an entrepreneur's negotiation skills can be understood in following paragraphs: 

• Brings success: Being able to negotiate effectively helps you reach agreements, achieve objectives, get along better with people, and ultimately be more productive and successful. 
• Closes the deal: The purpose of negotiation is to achieve agreement through discussion and compromise. It is different from arguing because you're not just trying to persuade another person you're right and they're wrong. You're trying to achieve an objective — to get something you want or need. 
• Builds relationship which is long lasting: The purpose of negotiation is to build, maintain and improves relationships.

The following are the methods of negotiations: 

• Win-Win Negotiation: In this type of negotiation, each side is working towards a solution where everyone wins something. They can discuss, look at multiple issues, and try to expand their thought process rather than divide it. 
• Win-Lose Negotiation: When one party gets what they want, and the other party has to give up something then it is called win-lose negotiation. Generally, it happens in cases where you negotiate a lease on office space. Landlord has upper hand in negotiation as he or she will lease property at terms and conditions suitable to him. 
• Settlement Negotiation: This is followed in cases there is dispute and a settlement needs to be reached out. Both the parties have to arrive at some workable solution. For example, when the management of an organization is negotiating with the labour union then they need to reach out at an amicable settlement to ensure smooth business operations.

Customer Relations

An entrepreneur is required to ensure a good Customer Relationship Management (CRM) to expand market share of his or her product or services. CRM entails all aspects of interaction that a company has with its customer, whether it is sales or service-related. CRM is a business strategy that enables businesses to: 

• Understand the customer thought process and mindset towards entrepreneur's product or services 
• Attract new customers 
• Increase profitably 
• Decrease customer management costs 
• Retain customers through better customer experience

Importance of CRM 
The following are the points for importance of CRM:

• Maintain Business-Customer Relationship: CRM systems are used in the same way to manage business contacts, clients, contract wins and sales leads. Managing customers and their different needs while being associated with an entrepreneur's product or services is the most important aspect of CRM. 
• Customer Database Management: CRM provides the customer business data that helps to provide the products or services they require. The database is required to connect to the perspective customers and educate them about the product and its utility. 
• Helps in Identifying Customer Profile: CRM contains each and every bit of details of a customer. It becomes very easy to track a customer. It can be used to determine which customer can be profitable and which not. 
• Customer Group Focus: In CRM system, customers are grouped according to different aspects according to the type of business they do or according to physical location and are allocated to different customer managers often called as account managers. This helps in focusing and concentrating on each and every customer separately.
• Cost Effective: The strongest aspect of Customer Relationship Management is that it is very cost-effective. No paper work, manual work is required resulting in less cost. The technologies used in implementing a CRM system are also very cheap and smooth as compared to the traditional way of business.

Employee and Vendor Management

An entrepreneur has to manage his employees and vendor in such a way that the broad objectives of his business organization are met. Employee management is internal part of the organization while vendor management is external to the business. We will discuss both employee management and vendor management separately in this section of the chapter. Let's discuss employee management first.

Employee Management 
When we talk about employee management, the first thing we should understand as who is an employee? An employee is someone who has agreed to be employed, under a contract of service, to work for some form of payment like wages, salary, commission and piece rates. An employee may be home workers, people who have been offered and have accepted a job, fixed-term employees, seasonal employees, casual and part-time employees and probationary and trial employees. An employee is not a self-employed or independent contractor, a volunteer who does not receive a reward for working. However, in general, there are either Fixed term employees or Casual and part-time employees.
Let's now discuss about employee management as we are now aware of who is an employee. An entrepreneur has to ensure that he hires the best talent in his organization and nurture them in such a way that they contribute to the growth and prosperity of the organization. Employee management has two aspects namely hiring of best talent and grooming them to become future leaders.

• Hiring the Best Talent: Fast growing, entrepreneurial organizations need employees who regularly demonstrate entrepreneurial characteristics and work habits. Management of entrepreneurial companies must work diligently to recognize, identify and attract this type of employee during the recruitment process to assure a steady stream of the people with the right attitude to fuel growth of the venture. It must be endured that the perspective employees have ability to deal with risk, multi tasking ability, result oriented, high energy levels, growth oriented and team player.

• Retaining and Grooming the Future Leaders: The second part of the employee management is retaining and grooming future leaders. Retention of employees can be achieved by providing financial and non financial incentives. Financial incentives include bonus, rewards, group insurance etc. Non financial incentives include recognition, rewards, motivation etc. Also, employees should be groomed in terms of training and counseling so that they can become future leaders. The talent should be identified and grown in such a way that a constant flow of leadership pool is maintained and entrepreneur can achieve the needs of his growing venture.

Hence, an entrepreneur must strive to create entrepreneurial employees who bring innovative and path breaking ideas to grow the business. Such employees are assets for any organization and regarded as the growth engine of the company.
Vendor Management 
Vendor management is an important aspect of an entrepreneur's business. We need to understand who is a vendor before talking about vendor management. In very simple words, a vendor is a seller of goods and services and a seller is a person who promises to supply certain goods or services in exchange of money as consideration. The buyer needs to pay for the goods and services and in the eyes of the buyer the seller is a vendor. This means that the buyer has the option to buy goods from different vendors or sellers. Hence, under vendor management, the buyer or entrepreneur should follow some well laid out principles of vendor management which we will discuss in the coming paragraphs.
Vendor management is a three step process:

• Vendor Selection: Vendor selection is two steps process namely vendor risk analysis and Vendor due diligence. Risk analysis requires the entrepreneur to identify the importance of the function to his or her business, the nature of the activities the vendor will perform, and the inherent riskiness of the activity. The more risky the activity, the more important the need is for due diligence in selection, in contracting, and in supervision and monitoring. Also, for regulatory purposes, the process of risk analysis must be carefully documented.
  Due diligence means an audit or investigation of potential vendor by the entrepreneur. The intensity of due diligence required in selecting a vendor will depend on the results of the risk analysis the entrepreneur completed in deciding to contract with a vendor to provide goods or services. Due diligence requires a reasonable inquiry into a vendor's ability to operationally meet the requirements for the proposed contract and an inquiry into the vendor's financial ability to deliver on its promise.
• Setting the Expectation through Mutual Agreement: Once a vendor is selected then a mutually agreed written contract should be created to make it biding on both the parties for each other's expectation. A strong contract with a significant vendor is essential to properly managing the relationship. Even relationships with vendors that provide low-risk services can, and often should, be defined in simple form contracts.

The following essential points should be considered while finalizing the contract with the vendor:
(i) All contracts should be in writing.
(ii) To the extent applicable, contracts should cover expectations and responsibilities.
(iii) The scope of work and fees should be mentioned in the contract.
(iv) Type and frequency of reporting on the status of work involved should be part of the contract.
(v) Process for changing scope of work should also be mentioned.
(vi) Ownership of any work product.
(vii) An acknowledgement that the vendor is subject to regulatory review, privacy and information security.
(viii) A process for ongoing monitoring, and supervision and dispute resolution.
(ix) Legal counsel should review all significant contracts.

A common problem with many vendor contracts is that the expectations and responsibilities of the vendor and the financial institution are not adequately communicated. When problems develop, resolution becomes very difficult, as each party insists that the other is responsible. 

• Monitoring the Vendor Performance: There should be monitoring mechanism in place to ensure that the vendor has discharged his commitments to the satisfaction of the contractual agreement. Entrepreneur should ensure that there is proper feedback given to the vendor so that steps are taken by him to correct the problem areas. How much supervision is required is, of course, dependent on the entrepreneur's assessment of the risk of the particular goods or services being provided. The staff assigned to oversee each vendor should have the necessary expertise to do so appropriately.
  Monitoring and supervision should include periodic review of the vendor's financial condition and insurance coverage. It should include a verification that the insurance coverage's represented to the bank are in force.

The vendor's policies relating to internal controls and security should be reviewed and some method of determining whether the vendor is following such controls should be developed.

Quality, Timeliness and Customer Satisfaction

An entrepreneur has to be very careful about the quality, timeliness and customer satisfaction pertaining to the product or service he or she is providing in the market. As a new entrant in the market, it is important that he or she leave a good impression on the minds of the customers. This helps him to publicize his product or service in an easy way. Good quality and level of customer satisfaction is a sure shot way of achieving a good business impact. An entrepreneur must devise a strategy to ensure that the objectives of quality, timeliness and customer satisfaction are met without any exceptions.

What is Customer Satisfaction?
Customer satisfaction is nothing but customer experience derived out of the product or service availed by him or her. Any process or activity on the part of the entrepreneurial organization that affects customer experience directly affects customer satisfaction. Processes or activities may be regarding product and service quality. Several ways by which a company interacts with its customers can give it a chance to continuously exceed customer expectations and earn long-term loyalty as a result. The following are the factors which have impact on customer satisfaction: 

• The Leadership Process: A Customer satisfaction start with employee satisfaction and employee satisfaction is derived out of a strong leadership process in the organization. A leadership process of an entrepreneur that keeps front line employees engaged, excited and empowered. It will be achieved with the help of incentives, growth opportunities or training programs. Strong employee morale can play out in strong customer service. 
• Quick Resolution of Problems or Issues: Customers need quick resolution of their issues. The flexibility and authority that employees have to satisfy customer complaints or meet their needs directly impacts customers. Employees too limited as to the decisions they can make can force unhappy or undecided customers to lose confidence and interest in the company overall. For example, how effective your processes are for letting employees handle customers' replacements or refunds by phone, in person can impact customers' perceptions regarding convenience and trust.
• Quality Control: Quality control helps in retaining existing customers and adding new to the list. Processes that improve the quality of products and services directly affect customer satisfaction. For example, customers may need and expect a certain standard of speed, accuracy and timeliness in entrepreneur's order fulfillment and shipping processes when making purchases online.

Business Failures — Reasons

We generally avoid to discus about a topic like failure. In fact, we hate the word "failure" as it shakes our confidence and creates more trouble than we had it earlier. However, failure does happen in entrepreneur's business but it does not happen without any reason. The following may be the reason for business failure:

• Failure to Understand Market, Customers: If an entrepreneur fails to understand this aspect of his business then sooner or later failure will knock his or her door. Customers are the main source of business continuity and there should be provided best possible product or service to remain in the business. 
• Business Choice: If an entrepreneur choses a business which really is not profitable but he thought that it will bring great fortunes then it will result in nothing but failure. We all learned the dot-com failure where the idea was great but it did not have capacity to generate sufficient cash flow to stay in the business. 
• Defective Promotion Strategy: The key to product or service promotion strategy is how you communicate to the customers and convince them for the utility of the product. Entrepreneur must clearly define his or her value proposition. If this is done then it needs to be analyzed whether the message is connecting with the customers or not. As long as customers to connect to it, it will not result in revenue generation for the entrepreneur. 
• Inadequate Financing Strategy: It is said that "Cash is king". If an entrepreneur does not have enough cash to carry through the sales cycles and downward trends, his or her prospects for success are not good. A proper plan for cash inflow and outflow should be in place and it should not be an aggressive plan which is not easy to achieve. 
• Lack of Foresight: An entrepreneur's failure to anticipate or react to competition, technology, or other changes in the marketplace may bring him or her to the door step of failure. It is dangerous to assume that what is done in the past will always work. Future is always uncertain and it has to be tackled with newer ideas with a mix of past experience. An entrepreneur's foresight into upcoming innovations, technology and trends will help the business move on. Lack of foresight will definitely make the product obsolete. 
• Lack of Diverse Mix of Products or Services: Having a large base of smaller customer with diverse product portfolio is better that having a big customer for a single product. This sounds easy to say but very difficult to achieve. This is where the entrepreneur should pay attention to expand his customer and product portfolio. Overdependence on single product or single customer is bound to create problem once the single customer leaves or the product becomes obsolete over a period of time. 
• Poor Management: An entrepreneur may fail due to poor management. Management of a business encompasses a number of activities: planning, organizing, controlling, directing and communicating. The basic rule of small business management is to know exactly where you stand at all times. An entrepreneur has to strive all the time to manage better than earlier and learn from mistakes and put counter strategies to mitigate risk of failures.