214 ENTREPRENEURSHIP
- At the knowledge stagepeople become aware of the innovation. Information is
disseminated through various media, and this public exposure is reinforced with
physical and social stimuli to create awareness of the product. The earliest messages
enable the consumer to recognize the innovation and recall its attributes. This is
when the entrepreneur must convey important facts and compelling images to the
public. - During the persuasion stage, favorable attitudes toward the product are articulat-
ed. These more sophisticated messages describe operating and performance charac-
teristics as well as buyer benefits. The risks of purchase are weighed against the risks
of non-purchase in the consumer’s mind. Marketers compare similar or competing
products to the new product and link it to positive images and personalities, creat-
ing what is known as the halo effect.Because consumers are actively searching and
processing information about the product at this stage, advertising and various mar-
keting communications become powerful tools. Now the entrepreneur can demon-
strate the relative advantages of the product or service, as well as its compatibility
with buyers’ values, needs, and behavior. - At the decision stage—the crucial “make or break” time for the entrepreneur—the
product or service is ready to be either accepted or rejected. Now, social and eco-
nomic pressures are brought to bear, leading the customer through a series of small-
er decisions that will lead to the purchase of the product. Here the entrepreneur
must close the sale. - At the implementation stage, the customer is actually using the product or service.
During this trial period, another crucial time, the venture is at risk in two ways.
First, it may be misused by the customer. Second, the marketing may have raised
unrealistic expectations for its performance, thereby disappointing the purchaser.
On the positive side, this is also the time when customers can experience user-
friendly aspects of the innovation and directly observe its benefits. - Finally, at the confirmation stage, customers either reverse their decision (no
repurchase) or are reinforced to repeat it (repurchase).
Figure 6.1 illustrates the diffusion process.^14
MARKETING STRATEGY
Marketing strategy is the set of objectives and the configuration of activities that enable
the new venture to implement a total marketing concept. In the resource-based
approach to sustainable competitive advantage, there are two keys to success. The first
is to identify and control rare, valuable, hard to duplicate, and nonsubstitutable
resources. This gives the firm its distinctive competence and its competitive edge. The
second key is an alloy, consisting of creativity and luck. A recent study reported that
among the twenty biggest retail outlets for top American brands, the three primary
sources of sustainable advantage were location, service, and luck (serendipitous creativ-
ity).^15
The study indicated that location, the primary aspect of a retailer’s distribution strat-