Marketing That Works: How Entrepreneurial Marketing Can Add Sustainable Value to Any Sized Company

Leonard M. Lodish / Howard L. Morgan / Shellye Archambeau / Jeffrey Babin  
Total pages
July 2015
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Marketing That Works: How Entrepreneurial Marketing Can Add Sustainable Value to Any Sized Company
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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 (
  • 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,
  • 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.


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

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 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!


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 ( and, 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.

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