Marketing the New Venture 209
plan by an entrepreneurial team is a red flag for investors and concerned stakeholders.
Marketing activities have much in common with entrepreneurial activities, so much
so that many entrepreneurs point to their ability to sell as the key to their success.^1 Both
are concerned with customer needs, new product and service ideas, monitoring the envi-
ronment, and communication—and both marketing and entrepreneurship are growth-
oriented. Marketing and entrepreneurial activity are linked by common perceptions,
goals, and behaviors. Yet many entrepreneurs underestimate the value of marketing and
ignore some of its key functions. A study of venture capitalists indicated that effective
market analysis could reduce new venture failure rates by 60 percent and that 75 percent
of entrepreneurs ignored negative marketing information.^2
In this chapter we will flesh out the significant marketing decisions and activities that
a new venture must perform.^3 We will follow the format in the marketing section of the
business plan presented in Chapter 5, beginning with a look at the new venture’s over-
all marketing concept and orientation. Then we will examine the marketing resources
controlled by and available to entrepreneurs and their firms. Next we will review the key
elements of the new venture’s marketing strategy, with special emphasis on market
research—potentially a source of SCA—and continue with a presentation of the special
issues involved in marketing Web-based firms and marketing on the Internet. We will
conclude with a description of various methods of sales forecasting. A reliable and valid
sales forecast is the critical outcome of the venture’s marketing activities and provides
the bridge between the entrepreneur’s plans and aspirations and the organization’s finan-
cial potential and performance. In the appendix to this chapter we illustrate the market
potential/sales requirement method, a sales forecasting technique that combines demand
forecasting and profit planning.
MARKETING CONCEPT AND ORIENTATION
The marketing concept is a managerial prescription (an “ought-to-do”) for setting mar-
keting goals and managing exchange transactions. It requires an understanding of poten-
tial and actual customer needs and of the costs of meeting those needs. The entrepre-
neur then devises and implements a total system that integrates marketing with the other
business functions. The single most important objective of marketing is customer satis-
faction. Customer satisfactionis achieved when a firm provides user-based quality and
value (the quality/price ratio) to its buyers.
Customer Orientation
The employment of the total marketing concept is fairly well established in most small
businesses and new ventures,^4 but there are other orientations to consider: for example,
production orientation, sales emphasis, or social orientation.
Production orientationis preoccupied with manufacturing-based or product-based
quality and is internally directed. Production-oriented ventures are often founded by
engineers, inventors, or high-tech wizards, people fascinated by the gadgets and gizmos
they are attempting to bring to market.
Sales orientationis not marketing orientation. Sales-oriented firms make selling
their number one priority. Developing long-term relationships with customers, integrat-
