Contents of the Marketing Plan

Part 1. Market Analysis

• Market Scanning, Segmentation, and Application Finding

• Competitive Analysis

• The Value Proposition

Part 2. Marketing Strategy

• Product Strategy

• Marketing Communications Program

• Collaboration Strategy

Part 3. The Business Model

• Pricing Strategy

• Market Demand and Sales Forecast

• The Business Model

Part 1: Market Analysis

Market Scanning, Segmentation, and Application Finding. One of the secrets of successful technology companies is that they have managed to find a “natural resonant frequency” between their core technologies and the particular markets or segments they are serving. To find this best fit for their client company, the team systematically scans the market, including markets beyond the company’s immediate customer industry. Often a company will have a marketing plan in place for a technology or product line, but it would like to develop a more limited marketing plan for a particular application, product extension, market segment, or geographic region. In this case, the team identifies and evaluates promising but under-exploited market segments and recommends steps to specifically target the needs and characteristics of the selected segments.

Competitive Analysis. One of the iron laws of nature and marketing is that no two objects can occupy the same position at the same time. With a unique competitive position, companies can avoid the attrition of head-to-head competition, and protect their profit margins from erosion of price wars and commoditization. The team maps the competitive environment, identifies the most significant direct or indirect competitors or competing technologies, analyzes their strengths, strategies, and vulnerabilities, identifies potential sources of competitive differentiation, and formulates a competitive strategy.

The Value Proposition. The value proposition for a product or technology is more than a "pitch" to the marketplace; it is an organizing principle for the design and assessment of all of the company's activities, from R&D to manufacturing, finance, information strategy, human resources, and customer service and support. Without it, the company is in danger of drifting and losing focus. For business-to-business markets, the team maps the prospect’s business processes and ferret out the “leverage points,” the factors toward which to aim the business case. Around these leverage points it builds a value model that allows the company and its prospective customers to estimate the customer's return-on-investment from adopting the product or technology.

Part 2. Marketing Strategy

Product Strategy. Good product management is all about getting the right product with the right features to the right market at the right price and at the right time. But how do you hit your target when the product is early in its life cycle, and potential users lack the experience to offer reliable guidance to the developer? One answer for many early stage products is rapid prototyping - putting early versions of a new product out quickly and at low cost, watching how users respond to it, and incorporating that feedback into the next product “probe.” In a few iterations, the market teaches you what clicks. Where an early version of the company’s offering is ready and the company wishes to test it with an early adopter, the team will develop an “instrumented market probe” (observation, interviews, and other data collection) that will allow it to collect user feedback on how the offering works out in a live setting, its direct and indirect impacts on user operations, and user ideas for product improvement.

Marketing Communications Program. Once they have an offering in hand, companies have to break through the clutter of competitors and the noise they generate to build a distinct, powerful brand. The team helps the company to determine how the market perceives it, what factors influence their purchasing decisions, what its key messages need to be, to whom they should be directed, and how they can be most effectively delivered. Emphasis is placed on highly cost-effective digital marketing strategies and on marketing public relations, the “advertising” of the 21^st century.

Collaboration Strategy. Companies undertaking serious innovation almost invariably find that the lack some of the pieces needed to build a viable position, whether supporting technologies, market channels, customer relationships, or manufacturing capabilities. The team helps the company assess the gaps in their capabilities, identifies and analyzes potential partners, and formulates a collaboration strategy.

Part 3. The Business Model

Market Demand and Sales Forecast. You don’t know when the market will take off, and yet you’d hate to miss the wave when it does.  You have hiring and investment decisions to make, a payroll to meet, bills to pay, investors to answer to.  You’ve got to have some idea of your cash flow.  Forecasting demand or cash flow is particularly challenging when the market is still latent and the technology is still emerging. The team will build market models that allow the company to explore demand and sales taking into account assumed market adoption rates, competition, substitute technologies, and other factors.

Pricing Strategy. What price will the market bear?  For the early stage technology offering and no direct competitors, there are few natural guideposts. Another challenge is developing a pricing strategy that factors in the value to the market and customer preferences while providing for adequate return on the seller’s investment. The team considers the factors that go into pricing - cost, target return, customer value, and competition, then analyzes alternative pricing strategies and recommends a strategy that is sustainable and supports the company's business strategy.

The Business Model. In this final step, the team builds a “resilient” business strategy that takes into account the uncertainties of the market; the potentialities and constraints of the technology; and capabilities, resources, and limitations of the seller’s organization.  The output is a discounted cash flow business model, based on assumptions about demand, adoption rates, availability of complementary and supporting technologies, competitive entry and positioning, substitute technologies, and the effects of different pricing strategies. The business model is tested for resilience and profitability under a range of plausible scenarios.

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How Does the For-Credit Team Project Work?

1. The interested company either selects (or combines) a project from the preceding list or defines a project of its own and e-mails a project description to the faculty member (john.a.bers@vanderbilt.edu).
2. Student teams are matched to companies based on common interest, training and the company's needs.
3. The company, the team, and the faculty member negotiate a "contract" that spells out the project objectives, deliverables, the work plan, and any resources required.
4. The project is executed under the joint direction of the company's project officer and the supervising faculty member. Projects are typically completed within one academic semester (about four months). The project culminates with an onsite presentation and full written report, along with any agreed deliverables.
5. The sponsoring company assesses the quality of the project - this becomes the basis for the team's final project grade.

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Resource Requirements, Access to Information, and Nondisclosure Agreement

What Vanderbilt provides...

In carrying out their projects, student teams make use of the full range of Vanderbilt's vast collection of information sources (databases, electronic journals, and other research tools). They also have access to the supervising faculty member as well as faculty expertise throughout the university.

What the sponsoring company provides...

From the company's perspective the most important resource the team can have is a high level sponsor within the client organization who can assure team members access to appropriate employees, data, and/or customers for purposes of collecting pertinent information.  In addition, the client is asked to cover the team’s out-of-pocket expenses, typically postage, long distance calls and faxes, supplies and any travel beyond the metropolitan area (e.g., travel to a trade show).  The client and team are encouraged to agree on a project budget in advance.  At the client's discretion, members of the team will be asked to sign a standard nondisclosure agreement as a condition of participation.

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At your earliest convenience, please contact the instructor, Prof. John Bers, Engineering Management Program, Vanderbilt University School of Engineering, e-mail: john.a.bers@vanderbilt.edu; postal address: P. O. Box 351518 Station B, Nashville TN 37235; phone (615) 343-4965.

Deadlines:

Initial Expressions of Interest (1-paragraph description of work to be accomplished): Dec. 1.

Final projects to be selected by: Dec. 31.

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Driving and Parking Directions to Featheringill Hall, the Vanderbilt University School of Engineering (VUSE)

Bring quarters for metered parking

Directions: From West End Avenue, turn into Vanderbilt on 24^th Ave. South (the street in the middle of four matching tall brick dormitory towers). VUSE (Featheringill Hall) is at second stop sign on the left corner of 24^th and Commodore Place (just beyond the power station).

See campus map: http://www.vanderbilt.edu/map/map.cgi?mode=1&bldg=jacobs.html

Parking: Your best option for visits of two hours or less is metered on-street parking (bring quarters – three per hour). There are four metered spaces on 24^th Street (one hour time limit) just beyond the School of Engineering, but they are usually occupied. For more metered parking, continue on 24^th Ave. S. passing through the University Club parking lot and back out onto the intersection of Garland Ave. and the continuation of 24^th Ave. S. You’ll find metered parking (two hour time limit) on both sides of 24^th (in front of the VA Hospital) and on the opposite side of Garland Ave. Handicapped parking is available on 24th Ave. alongside Featheringill Hall.

Walk back to the School of Engineering and enter any of the double doors into the large atrium. If you’re meeting on the second or third floor, use the large stairwell from the atrium or the elevators behind the stairwell.