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Marketing That Works: How Entrepreneurial Marketing Can Add Sustainable Value to Any Sized Company (2e)

By Leonard M. Lodish, Howard L. Morgan, Shellye Archambeau, Jeffrey Babin
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Discover new entrepreneurial marketing strategies and techniques for supercharging profits now, and sustaining competitive advantage for years to come! Marketing That Works, Second Edition delivers a comprehensive portfolio of high-value, low-cost marketing solutions that fully leverage today's newest trends, channels, and market opportunities. Based on The Wharton School's pioneering Entrepreneurial Marketing, this edition adds nearly 50% new coverage – highlighting new companies that are redefining marketing today, and illuminating emerging approaches to securing resources and promoting your offers.


You'll discover powerful new best practices for social, PR, promotion, advertising, and much more: techniques for getting closer to your customer, reducing acquisition and retention costs, reinforcing positioning and differentiation, and much more. Four cutting-edge marketers present new or extensively revised coverage of: 

  • Social media and network externalities (Facebook, Twitter, Waze, Vendop, Dropbox)
  • Advanced social marketing techniques (Fab, Uber, DogVacay)
  • Localization and micromarketing (Milo.com)
  • How to leverage your customer's mass migration to mobile
  • Marketing-enabled sales, and the cultivation of customer relationships and communities (MetricStream, Regalix)
  • Virality: how you can develop messages that desperately "want" to spread
  • Marketing to the consumerized enterprise
  • New approaches to increasing customer retention and strengthening lock in (Amazon Prime, Quidsi, Diapers.com)
  • Financing your marketing: cost effective ways to establish value, including crowdfunding (Pebble), Lean Startup, for quickly building and testing concepts and companies, and accelerators (Y Combinator, DreamIt)

To help you systematically optimize your marketing investments, Marketing That Works, Second Edition integrates Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV) benchmark metrics throughout.


Wherever you compete – no matter how large or small your company is – this guide will help you grow sales and profits, strengthen your brand, and drive more value from every dime you spend on marketing.

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Table of contents
&>The Book's Mission     1
The Authors’ and the Book’s Heritage     3
The Importance of Marketing     4
One Positioning, Multiple Stakeholders     6
Challenges of the Next Decade     7

Chapter 1  Marketing-Driven Strategy to Make Extraordinary Money     13

Orvis Company--Excellent Entrepreneurial Positioning     13
Positioning to Enhance the Value Proposition     14
Getting Started: Segmentation and Targeting     16
    Virtual Communities: The Ultimate Segment?     17
    An Entrepreneurial Segmentation Example--Tandem’s East     18
    An Entrepreneurial Segmentation Audit     20
Gaining the Competitive Advantage: Differentiation     22
    Distinctive Competence and Sustainable Competitive Advantage     24
Tying Together the Value Proposition: Distinctive Competence, Sustainable Competitive Advantage, and Positioning     27
    Victoria’s Secret and L Brands--Excellent Integration of Positioning, Segmentation, and Distinctive Competencies     29
Positioning, Names, and Slogans     31
    Hindustan Unilever Limited: Positioning and Targeting to the Bottom of the Global Pyramid     33
    The Unmet Need     34
Summary     39
Endnotes     39
Chapter 2  Generating, Screening, and Developing Ideas     41
Idea Generation and Testing at Idealab     41
Evaluating Specific Venture Ideas     42
    Finding More Receptive Battlefields     43
Dry Tests, Crowdfunding, and Concept Testing: What They Are and Where They Are Best Used     46
    Getting Customers to Part with Money: The Real Tests of Value     46
    Victoria’s Secret Uses Their Stores as Test Beds for New Products and Brands     48
    Testing Purchase Intention: The Concept Test    49
    How to Do Concept Testing--the “Nuts and Bolts”     50
    Best Practices and Uses for Concept Testing     56
    Caveats for Concept Testing     60
Trakus: The Value of Concept Testing     61
Summary     65
Endnotes     66
Chapter 3  Entrepreneurial Pricing: An Often-Misused Way to Garner Extraordinary Profits     67
Determining Price at Warby Parker     67
Pricing to Create and Capture Value     68
    Price and Perceived Value     70
    Getting Price Right Early--It’s Hard to Raise Prices Later!     71
    Perceived Value in Use for Business-to-Business Products     72
    The SAS Institute, Inc.--Very Effective Management of Perceived Customer Value     74
    Pricing of Intellectual Property     77
    What Else Can Impact Price Response?     79
    Customer-Determined Pricing     80
    Revisiting Costs in Determining Price     82
Methods for Determining Revenue at Alternative Price Levels     84
    Premarket Methods--Pricing and Concept Testing     84
    In-Market Methods     90
Victoria’s Secret Can Use Its Many Stores for In-Market Experimentation     95
Summary     96
Endnotes     97

Chapter 4 Leverage Public Relations for Maximum Value     103

PayMyBills.com--Battling Competition with Public Relations     103
Aspire to Be a “Winner”     104
Gaining the Perception of Leadership     105
    Spokespersons/Evangelists     109
    Linkage to Fund-raising     111
    PR Agencies     112
    Timing Is Essential     113
    Crisis Management     114
Summary     115
Endnote     115
Chapter 5  Promotion and Viral Marketing to Maximize Sustainable Profitability     117
The Coolest Cooler--One of Kickstarter’s Most Successful Campaigns     117
Methods for Promoting Products and Engaging Customers     118
Give It Away     119
    Free Trials Versus Free Forever Versus Freemium     121
    Key Metrics for Free Trials to Pay     122
Viral Marketing     123
    Using Social Media for Viral Marketing     125
    When Do Giveaways Work?     126
Event Marketing     128
    Consumer Events     130
Product Placement     131
Winning the Tchotchke Wars     132
Summary     134
Endnotes     134
Chapter 6  Advertising to Build Awareness and Reinforce Messaging     135
Synygy Generated Productive Ad Options for Low Cost     135
Moving to More Effective Advertising     138
    Even Large Firms Waste a Lot of Their Advertising Expenditures     139
    How Entrepreneurs Can Improve the Productivity of Their Advertising     141
Improving Campaigns     141
    The Hindustan Lever (HLL) Missed Experimentation Opportunity     145
    Victoria’s Secret’s Advertising and Testing Strategy     147
Evaluating Campaigns--“Vaguely Right” Versus “Precisely Wrong”     148
    A National Retailer’s Campaign Evaluation     149
     “Vaguely Right” Entrepreneurial Marketing Experimentation     153
    Evaluation Before Is More Valuable than After     154
Media Planning     157
    Sample Template for Media Evaluation     158
The Digital Marketing Revolution--Evaluating and Maximizing Its “Bang Per Buck”     163
    Display Ads     164
    Search Engine Optimization     166
    Evaluating the Return on Search Engine Marketing     170
    Methods for Improving Productivity of Search Engine Marketing     171
    SoLoMo, Personalization, and Other Emerging Digital Advertising Concepts     172
Summary     174
Endnotes     174
Chapter 7  Distribution/Channel Decisions to Solidify Sustainable Competitive Advantage     177
Anki--Emerging from Stealth Mode with Help from Apple     177
Making Distribution Decisions     179
Required Functions of Any Distribution System      180
    Evaluating Distribution Options, a Disintermediation Example     182
    Revisiting Positioning in the Context of Distribution     183
    Other Aspects of Distribution System Design--Direct Versus Indirect     184
Owning Your Own Distribution--The Highest Control     185
    Victoria’s Secret and the L Brands’ “Own Store” Channel Strategy     186
Indirect Distribution and Exclusivity Alternatives     188
    Exclusive Distribution     189
    Anki DRIVE--Launched by Exclusivity     190
    Evaluating Channel Exclusivity     191
    Item Exclusivity     193
Intensive Distribution     194
Selective Distribution     195
    Brooks Sports--Integrating Selective Distribution with Effective Positioning and Segmentation     196
    Preservation Hall Jazz Bands--A Selective Distribution Example     198
Types of Intermediaries--Earn Your Partners in Distribution     199
    Neat, Co.--Using Kiosks (Direct Sales) to Earn Distribution     200
    Nice Systems--A VAR Example     201
Dynamic Distribution Management     202
    Superscope, Inc.--Couldn’t Achieve Balance     203
    Franklin Electronic Publishers     206
Franchising: Still Another Distribution Option     207
    Different Types of Franchising     207
    From the Franchisee’s Point of View     208
    From the Franchisor’s Point of View     212
    Rita’s Water Ice--A Successful Franchising Venture     215
Managing and Anticipating “Channel Conflict”      218
Concept Testing to Channel Members     222
Summary     223
Endnotes     223
Chapter 8  Sales Management to Add Value     225
Plantronics     225
The Role of the Sales Management     226
Type of Sales Forces     229
    Direct to End User     229
    Resellers, Distributors, and Retailers     230
    Value-Added Resellers     231
    Agents, Brokers, and Representatives     231
The Control Issue: Choosing Your Sales Force     233
    What Situations Favor Direct Versus Rep?     233
    Choosing Reps     235
    Effective Rep Management     236
    Rep Management and the Perceived Value Proposition     237
    Direct Sales: Personal Versus Telephone Versus the Web and Other Nonpersonal Sales     238
    IndyMac: Using Both Direct and Indirect Sales Channels     241
Sales Force Size, Deployment, and Organization     242
    Sales Force Size and Deployment     242
    Deployment with Limited Sales Force Size     244
    Sales Force Organization and Travel Costs     245
Compensation     245
    Matching Incentives     245
    Outback Steakhouse--Perfectly Matched Incentives     247
    Incentives Versus Control Versus Time Horizons     247
    Compensation for New Versus Existing Customers, a Possible Festering Problem     248
    The Shadow Broadcast Services Example     249
Recruiting, Training, and Retention Strategies     252
Summary     254
Endnotes     255
Chapter 9  Marketing-Enabled Sales     257
MetricStream, Inc., and the Marketing-Enabled Sales Strategy     257
Marketing Tools to Support the Sales Process     258
Help Prospects Find You     260
Gain Prospect Interest and Trust     261
    Company Website     264
    Traditional Advertising     265
    Pay per Click (PPC) Advertising     265
    Social Media     267
    Webinars     268
    Trade Shows     269
    Blog Posts     270
    E-Mail Campaigns     270
Qualify Prospects and Identify Prospective Buyers     271
    8x8 Reinvigorating Dormant Prospects     272
Drive Toward the Close     274
    Submit the Proposal     274
    Check References     278
    Handle Objections     278
Close the Deal     280
Training Is Necessary     280
The Relationship Between Marketing and Sales     281
Summary     282
Endnote     283

Chapter 10 Create an Ecosystem to Maximize Product/Service Lifetime Profitability     287

Pebble: The Start-Up Taking on Multibillion-Dollar Global Companies     287
Engaging Your Customers in Product Launch     289
The Beta Process     292
Reference Accounts     296
    Reaching Target Reference Customers     298
    Establishing a Compelling Offer     298
    Building an Internal Resource Plan to Ensure a Successful Launch     300
Securing External Support for Your Product     302
Partnering for Launch     304
Channels of Distribution     305
Summary     306
Endnotes     306
Chapter 11  Entrepreneurial Marketing for Building Teams     307
Anki: From Classmates to a Company     307
Positioning for Talent     309
    Segmentation: Understanding the Needs of Company and Employees     309
    Differentiation: Setting Yourself Apart     312
Building a Team and Corporate Culture     313
Reaching the Prospects     315
Choosing the Prospect     317
Compensation: Pricing Your Talent     322
Summary     323
Endnotes     323
Chapter 12  Marketing for Financing Activities     325
Pebble: Preserving Equity with Crowdfunding and Venture Funding     325
Financing: A Different Product for a Different Customer     327
Product Versus Financial Marketing     329
    A Financial Marketing Plan     329
    The Buying Center     331
Segmentation of Investors     332
    Crowdfunding     332
    Angels     333
    Venture Capital Firms     334
    Incubators and Accelerators     335
    Corporate Strategic Partners/Investors     336
    Institutional Investors     337
Naming     337
Pricing--The Value of Your Venture     338
Venture Marketing     339
Initial Public Offering (IPO)     340
Investor Relations     341
Summary     343
Endnotes     343
Chapter 13  Building Strong Brands and Strong Companies     345
Why Is It Hard to Build Brands?     347
    Can Entrepreneurial Marketers Overcome These Eight Difficulties in Building Brands?     354
Ten Guidelines for Building Strong Brands     355
Summary     358
Endnotes     358
Index     359


The #1 actionable guide to entrepreneurial marketing — now fully revised for the latest high-value techniques, channels, and metrics!

Features & benefits

Extensively updated and improved: new ways to develop a winning entrepreneurial marketing strategy in your company – whatever your size, wherever you compete 

  • Reflects the newest high-value best practices in PR, promotion, advertising, social, and beyond
  • Breakthrough techniques you can actually use: social, mobile, local, micromarketing, enterprise consumerization, retail, crowdfunding, lean startup, and more
  • Up-to-the-minute case studies from a new generation of innovators: from Waze and Uber to Amazon Prime
  • Now thoroughly integrates key metrics, including Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV)
  • Based on the pioneering MBA-level Entrepreneurial Marketing course created by lead author Leonard Lodish at The Wharton School
Author biography
Leonard M. Lodish, Ph.D., is Samuel R. Harrell Professor Emeritus of Marketing at The Wharton School. He is cofounder and Leader of Wharton’s Global Consulting Practicum, and innovator of Wharton’s MBA Entrepreneurial Marketing course. His research focuses on marketing decision support systems, marketing experimentation, and entrepreneurial marketing. As an active venture advisor and investor, Len was the first outside board member and helped raise the first investments for Quidsi.com (diapers.com) and Milo.com, and other very successful ventures. He is a cofounder of Musketeer Capital and advisor to a number of venture funds.

Howard L. Morgan is cofounder and Partner of First Round Capital, a venture capital investment firm, and founding investor and board member of Idealab. He has served as Professor of Decision Sciences at The Wharton School, as Professor of Computer and Information Sciences at the University of Pennsylvania, as Assistant Professor of Operations Research at Cornell University, and as Visiting Professor at the California Institute of Technology and Harvard Business School.

Shellye Archambeau is CEO of MetricStream, Inc., a recognized global leader in Governance, Risk, and Compliance. She also serves on the boards of directors for Verizon Communications and Nordstrom. She previously served as CMO and EVP of Sales for Loudcloud, Inc., responsible for all global sales and marketing activities. There, she led Loudcloud’s transformation into an enterprisefocused company while growing sales by 50% year over year. As President of Blockbuster, Inc.’s e-commerce division, she was recognized by Internet World as one of the nation’s Top 25 click-and-mortar executives.

Jeffrey A. Babin is Associate Professor of Practice & Associate Director of Engineering Entrepreneurship at the University of Pennsylvania, and founder and Managing Director of Antiphony Partners, LLC, a strategy consulting firm that helps companies create sustainable value through innovation. He is Senior Project Advisor and Regional Manager of the Wharton Global Consulting Practicum, Advisor for the Wharton Venture Initiation Program, and founding member of the Mid-Atlantic Angel Group.

For more information about Marketing That Works, visit www.marketingthatworksbook.com.