Three elements:
* Choice of target market
** ''Conventional wisdom'' of marketing textbooks and works on business planning says that ''markets should be analyzed and segmented''
*** but venture capitalists report that many new firms lack a clear idea of their market and their most promising segments
** New firms are apt to fall for the temptation of offering their product to a wide range of customer groups because they see much potential in all of them
** Prior product/market experience of the founders and industry contacts have a beneficial effect on the right market choice
** ''Targeting a single segment is better'' for new firms
** Fewer resources are required in specialization than in generalization
* The ''type of competitive advantage'' that is pursued
** Achieving a sustainable competitive advantage is considered to be the most important factor of new product success
** Some studies conclude that a differentiation strategy produces more successful results
** Recent research show that a strategy of cost leadership is better suited for pioneers
** And firms who are second into the market should differentiate their offering
* The ''timing of product launch''
** Many studies suggest that market pioneers capture higher market shares than later entrants
** But pioneers also face a great risk of mortality, partly because later entrants are able to benefit from the first mover’s marketing mistakes and diminishing [[Market uncertainty]]
** The pioneering advantage is augmented by factors such as R&D expenditures, service quality and immediate customer purchase frequency.
* ''Barriers to market entry''
** Access to distribution channels, the incumbent’s cost advantages, and customer switching cost
** New ventures often race into a market to avoid the disadvantages of entering late, rather than to capture the advantages of being early

Part of [[M6-S1 - Reading - Gruber, M. 2004. Marketing in new ventures: theory & empirical evidence]]
Sat, 18 Sep 2010 15:10:43 GMT
Sat, 18 Sep 2010 15:10:43 GMT