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SECTION III. LAUNCHING THE BUSINESS
CHAPTER 9. BUILDING A POWERFUL BOOTSTRAP
MARKETING PLAN
Part 1: Learning Objectives
1. Describe the principles of building a bootstrap marketing plan and explain the benefits
of preparing one.
2. Explain how small businesses can pinpoint their target markets.
3. Discuss the role of market research in building a bootstrap marketing plan and outline
the market research process.
4. Describe how a small business can build a competitive edge in the marketplace by
using bootstrap marketing strategies.
Part 2: Class Instruction
Introduction
Creating a solid business model and business plan improves an entrepreneur’s odds of
building a successful company. The business plan captures many of the topics discussed,
and in addition, it includes a concise statement of how an entrepreneur plans to achieve
success in the marketplace. This section focuses on building the marketing plan.
Building a Bootstrap Marketing Plan LO 1
Marketing is the process of creating and delivering desired goods and services to
customers and involves all of the activities associated with winning and retaining loyal
customers.
Bootstrap marketing strategies are unconventional, low-cost, creative techniques – small
companies can wring as much or more “bang” from their marketing bucks. This allows the
required marketing investment to fit the often limited marketing resources of the
organization. It demands creativity, ingenuity, and an understanding of customers’ buying
habits.
Refer to Table 9.1, A Seven-Sentence Bootstrap (Guerrilla) Marketing Strategy.
Tracking trends can be a valuable and affordable way to get a pulse on markets. Faith
Popcorn, a marketing consultant and author, offers tips to help spot significant trends:
Read as many current publications as possible.
Watch the top 10 TV shows; they provide indicators of consumers’ attitudes
and values and what they’re going to be buying.
See the top 10 movies; they also influence consumer behavior.
Talk to at least 150 customers a year about what they’re buying and why. Find
out what they’re thinking by asking questions such as, “will you buy from us
again?,” and “will you recommend us to your friends?”
Talk with the 10 smartest people you know.
Listen to your children or younger siblings. What trends are they tracking?
Then the entrepreneur should list the major trends they have identified and briefly describe
how well their products or services match these trends. Market research is the answer.
How to Conduct Market Research. The goal of market research is to reduce the risks
associated with making business decisions. Conducting market research involves four
steps:
Step 1: Define the objective.
Step 2: Collect the data. Individualized (one-to-one) marketing is a system based
on gathering data on individual customers and developing a marketing program
designed to appeal specifically to their needs, tastes, and preferences.
Two basic methods for collecting data include primary research, data you collect and
analyze yourself, and gathering secondary research, data that have already been
compiled and that are available. Primary research techniques include:
Customer surveys and questionnaires
Focus groups
Social media conversations and monitoring
Test market
Daily transactions
Other ideas – such as a suggestion system for customers and employees.
Secondary research, which is usually less expense to collect than primary data
includes:
Business directories
Direct mail lists
Demographic data
Census data
Forecasts
Market research
Articles
Local data
The Internet. Data mining is a process in which computer software that
uses statistical analysis, database technology, and artificial intelligence finds
hidden patterns, trends, and connections in data so that business owners can
make better marketing decisions and predictions about customers’ behavior.
Step 3: Analyze and interpret data.
Step 4: Draw conclusions and act.
Market research with existing customer is also valuable:
Identifies your best customers
Enhances your products and services
Welcomes customer complaints
Offers exceptional quality
Understands your customers’ buying cycle
Calculates the long-term value of customers
Plotting a Bootstrap Marketing Strategy: How to
Build a Competitive Edge LO 4
A company can establish a competitive edge when customers perceive that one
organization’s products or services are superior to those of its competitors. Successful
entrepreneurs often use the special advantages that flow from their companies’ small size
to build a competitive advantage over their larger rivals.
Bootstrap marketing tactics can be instrumental in building a brand for your business in a
number of ways as long as you always focus on the customer. Focusing on the customer
allows you to optimize your marketing and profitability potential. Refer to Table 9.2,
Bootstrap Marketing Tactics.
The following principles can help business owners create powerful, effective bootstrap
strategies.
Find a Niche and Fill It. A focus (niche) strategy allows a small company to
maximize the advantages of its size and to compete effectively even in
industries dominated by giants. Focusing on niches that are too small to be
attractive to large companies is a recipe for success.
Use the Power of Publicity. Publicity is any commercial news covered by the
media that boosts sales but for which a small company does not pay. Examples
include: writing an article, sponsoring an event, involving celebrities, being
interviewed on radio or television, being a speaker at local business and civic
organizations, offering or sponsoring a seminar, writing and sending news
releases to the media, volunteering to service on community and industry
boards and committees, sponsoring a community project or supporting a
nonprofit or charity, and promoting a cause.
Don’t Just Sell, Entertain. It has become critical to gain word-of-mouth
support via social media; to accomplish this requires that you engage and even
entertain customers. For example, develop creative YouTube videos.
Strive to Be Unique. Create an image of uniqueness for your business. Refer
to Table 9.3 for suggestions for a retail store.
Build a Community with Customers. Successful companies can interact with
customers regularly, intentionally, and purposefully to create meaningful,
lasting relationships with them. Company Web sites and social media are
important tools. A good example is Etsy.com.
Connect with Customers on an Emotional Level. Companies that establish a
deeper relationship with their customers than one based merely on making a
sale have the capacity to be exceptional bootstrap marketers because
customers receive an emotional boost every time they buy from the company.
Create a unique selling proposition (USP), which is a key customer benefit of
a product or service that sets it apart from the competition; it answers the
critical question every customer asks, “What’s in it for me?” Ideally, the USP
will be 10 words or less.
Create an Identity for Your Business Through Branding. Branding refers to
communicating a company’s USP to its target customers in a consistent and
integrated manner. Refer to Figure 9.2, The Connection Between Branding
and a USP.
Embrace Social Marketing. Businesses recognize that many of their current
and potential customers use social networking sites and are reaching out to
them with social marketing efforts. Three of the most popular are LinkedIn,
Facebook, and Twitter. Refer to Figure 9.3 Social Media Entrepreneurs Use
as Marketing Tools, and Figure 9.4 Benefits of Social Media Marketing.
Start a Blog. Tips for a successful blogging strategy include: strive to cultivate
the image of an expert or trusted friend on a topic: be patient; be honest,
balanced, and interesting; post blog entries consistently; ask customers for
feedback; use services such as Google Alerts that scan the Internet for a
company’s name and send email alerts when it finds posts about a company; be
cautious; promote the blog via social media and e-mail.
Create Online Videos. YouTube reports that visitors view 3 billion videos per
day.
Host a Special Event. The purpose is to reinforce the company’s brand in
customers’ minds and to connect with your business community. This creates a
forum to allow customer to meet you and others.
Be Dedicated to Service and Customer Satisfaction. Tips include: consistently
track all social media; respond and take responsibility; the customer is always
right, never be defensive; keep a database of all complaints and suggestions. A
company can achieve stellar customer service and satisfaction by: listen to
customers; define superior service; set standards and measure performance;
examine your company’s service cycle; see customer complaints as a
mechanism for improving customer service; when you create a negative
customer experience, apologize and fix it – fast!; hire the right employees; train
employees to deliver superior service; empowering employees to offer superior
service; treat employees with respect and demonstrate to them how valuable
they are; use technology to provide improved service; reward superior service;
get top managers’ support; give customers an unexpected surprise, and view
customer service as an investment, not an expense.
Retain Existing Customers. The goal is to form loyal, long-term relationships.
Retaining these customers may be the best investment in the future of a
business. Research indicates that repeat customer spend 67 percent more than
new customers. In addition, attracting new customers can cost seven to nine
times more than keeping an existing customer. Customer experience
management is the process of systematically creating the optimum experience
for customers every time they interact with the company. A focus on the
customer can directly correlate to higher customer retention rates and is based
on the response to these four questions: What are we doing right? How can we
do that even better? What have we done wrong? What can we do in the future?
Devotion to Quality. Quality goods and services are a prerequisite for survival.
Total quality management (TQM) is the philosophy of producing a high-
quality product or service and achieving quality in every aspect of the business
and its relationship with the customer; the focus is on continuous improvement
in the quality delivered to customers. The key is seeing the world from the
customer’s point of view. The following guidelines will help the firm to build a
reputation for quality: build quality into the process instead of relying on
inspections; foster teamwork; establish long-term ties with select suppliers;
provide managers and employees with needed training; empower workers at al
levels in the organization; get managers’ commitment to the quality
philosophy; rethink the processes used to get the products to customers; be
willing to make changes; reward employees for quality work; develop a
company-wide strategy for constant improvement; back up the quality pledge
with a guarantee.
Attention to Convenience. Studies show that customers rank convenience at
the top of their purchasing criteria. Successful companies must show that it is
easy for customers to do business with them. Conduct a convenience audit
from the customer’s point of view to get an idea of its ETDBW (Easy To Do
Business With) index: is the business located near your customers? are your
hours suitable for customers, would customers appreciate pickup and delivery
service? are employees trained to handle transactions quickly and politely;?do
employees treat customers with courtesy, do you provide a sufficient number
of checkout stations? are you using technology to enhance shopping? do you
offer extras that make customers’ lives easier? can you bundle some existing
products or services to make it easier for customers? can you adapt existing
products to make them more convenient? do you handle telephone calls
quickly and with a real person?
Concentrate on Innovation. In order to keep up with changing markets, small
businesses must be innovative. Small businesses are frequently leaders in
innovation even though they may lack resources compared to larger
businesses.
Emphasize Speed. Technology, particularly the Internet, has changed the pace
of business. To be competitive companies must reduce the time it takes to
develop, design, manufacture, and distribute a product, resulting in reduced
costs, increased quality, and increased market share. Time compression
management (TCM) is a marketing strategy that relies on three principles: (1)
speeding products to market, (2) shortening customer response time in
manufacturing and delivery, and (3) reducing the administrative time required
to fill an order. Companies relying on TCM should do the following:
reengineer the entire process rather than attempt to do the same things in the
same way but only faster; create cross-functional teams and give them the
power to attack and solve problems; set aggressive goals for time reduction
and stick to the schedule; rethink your supply chain; instill speed in the culture;
use technology to find shortcuts; put the Internet to work.
In addition to the text –
The Principles of Customer Experience Management (CEM) address the need to
establish:
An intimate understanding of each customer’s needs, want preferences, and
peculiarities
A personal, customer-specific message in marketing, sales, service, and advertising
A consistent, courteous, and professional treatment by everyone
A responsive, rapid handing of requests, questions, problems, and complaints
Helpful information and advice delivered proactively
The involvement of caring, well-trained people
Long-term view of the company/customer relationship with an emphasis on
sustaining an ongoing relationship
Frequent and visible demonstrations of commitment to nurturing this relationship
Consider using You Be the Consultant: “.CO Internet S.A.S.”, You Be the
Consultant: Auto Repair Goes Social”, and/or You Be the Consultant “The Impact
of Second-Mile Service” at this point.
Conclusion
Bootstrap marketing offers entrepreneurs significant benefits to create awareness and
promote their businesses. By using clever, innovative bootstrap marketing strategies, such
as the ones described in this chapter, entrepreneurs can put their companies in the
spotlight and create a special connection with their customers.
Part 3: Chapter Exercises
You Be the Consultant: “.CO Internet S.A.S”
1. How would you envision the marketing of .CO Internet S.A.S. to change now that
it is part of a large corporation? Can large companies effectively take advantage of
bootstrap marketing strategies? Explain. (LO 4) (AACSB: Application of
knowledge)
Even after Neustar’s acquisition of .CO Internet S.A.S, the company’s marketing
shouldn’t change. The only difference is that .CO Internet S.A.S. is no longer a start-up
marketing strategy to build the .CO Internet S.A.S.’s competitive advantage:
Find a niche and filling it
Copyright © 2019 Pearson Education, Inc.
Chapter 9, Page 145
Attend to convenience
Concentration on innovation
Emphasize speed
2. What steps can the new owner of .CO Internet S.A.S. take to maintain the
brand and continue to build customer recognition of it? Refer to Figure 9.2 on
page 354 and use the table below to do the following:
a. List threshold, performance, and excitement attributes for .CO Internet
S.A.S.
b. Identify “proof points” (reasons for customers to believe in the brand) that
support each of the attributes you list.
Threshold Attributes
Performance Attributes
Excitement Attributes
Specializes in tech start-ups
Believe .co refers to
company, not Columbia
Provide “membership”
Home for innovation
Membership benefits
Threshold Proof Points
Performance Proof Points
Excite Proof Points
GoDaddy commercials
Rapid sales increase
Example of a unique selling proposition: .CO Internet provides an Internet home for
innovative technology companies seeking a unique domain name ending in .co, and who
appreciate special membership benefits.
c. Use the attributes and their proof points to develop a unique selling proposition
for .CO Internet.
Copyright © 2019 Pearson Education, Inc.
Chapter 9, Page 146
service that sets it apart from the competition and answer the critical customer question:
“What’s in it for me?”
Example of a unique selling proposition: .CO Internet provides an Internet home for
innovative technology companies seeking a unique domain name ending in .co, and who
appreciate special membership benefits.
You Be the Consultant: “Auto Repair Goes Social”
1. Identify at least three lessons that entrepreneurs can learn from Victory Auto’s
use of social media. (LO 4) (AACSB: Reflective thinking)
Lessons learned may include:
A bootstrap marketing plan should accomplish three objectives: pinpoint the
specific target markets the small company will serve; choose marketing
strategy to reach that specific targeted group that has the highest propensity to
buy and be an ongoing customer; determine customer needs and wants through
market research. Target customers must permeate the entire business-
merchandise, music, layout, décor, Web site, and the total experience.
Connect with Customers on an Emotional Level. Create a unique selling
proposition (USP).
Create an Identity for Your Business Through Branding.
Embrace Social Marketing.
