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Competitive Edge
Creating your Unique Value Proposition to gain your Competitive Edge.
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How to Determine If There’s a Market for Your Business Idea

How to Determine If There’s a Market for Your Business Idea | Competitive Edge |

So you have a great idea for a product—something that’s bound to capture the hearts and minds (and wallets) of consumers everywhere. Or perhaps you’ve stumbled on a service that isn’t being offered by anyone else—one that’s desperately needed. This is your opportunity! Don’t hesitate … don’t look back … jump right into it and … 

Wait! Before you shift into high gear, you must determine whether there really is a market for your product or service. Not only that, you need to ascertain what, if any, fine-tuning is needed. Quite simply, you must conduct market research.

Many business owners neglect this crucial step in product development for the sole reason that they don’t want to hear any negative feedback. They’re convinced their product or service is perfect just the way it is, and they don’t want to risk tampering with it.

Other entrepreneurs bypass market research because they fear it will be too expensive. With all the other startup costs you’re facing, it’s not easy to justify spending money on research that will only prove what you knew all along: Your product is a winner.

Regardless of the reason, failing to do market research can amount to a death sentence for your product. “A lot of companies skim over the important background information because they’re so interested in getting their product to market,” says Donna Barson, president and owner of Barson Marketing Inc., a marketing, advertising and public relations consulting firm. “But the companies that do the best are the ones that do their homework.”

Consider market research an investment in your future. If you make the necessary adjustments to your product or service now, you’ll save money in the long run.

So what exactly is market research? Simply put, it’s a way of collecting information you can use to solve or avoid marketing problems. Good market research gives you the data you need to develop a marketing plan that really works for you. It enables you to identify the specific segments within a market that you want to target and to create an identity for your product or service that separates it from your competitors. Market research can also help you choose the best geographic location in which to launch your new business.

Before you start your market research, it’s a good idea to meet with a consultant, talk to a business or marketing professor at a local college or university, or contact your local SBA district office. These sources can offer guidance and help you with the first step in market research: deciding exactly what information you need to gather.

As a rule of thumb, market research should provide you with information about three critical areas: Read more: click image or title.

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Via Merger Alpha
Marc Kneepkens's insight:

An #idea is just the start. There is a lot to do before getting to #funding. Taking all the right steps will save you from #failure and frustration.

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Eight Things I Learned from Peter Thiel’s Zero To One | Farnam Street

Eight Things I Learned from Peter Thiel’s Zero To One | Farnam Street | Competitive Edge |
"Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past."

“The most contrarian thing of all is not to oppose the crowd but to think for yourself.

Peter Thiel is an entrepreneur and investor. He co-founded PayPal and Palantir. He also made the first outside investment in Facebook and was an early investor in companies like SpaceX and LinkedIn. And now he’s written a book, Zero to One: Notes on Startups, or How to Build the Future, with the goal of helping us “see beyond the tracks laid down” to the “broader future that there is to create.”

The book is an exercise in thinking. It’s about questioning and rethinking received wisdom in order to create the future.

Here are eight lessons I took away from the book.

1. Like Heraclitus, who said that you can only step into the same river once, Thiel believes that each moment in business happens only once.

The next Bill Gates will not build an operating system. The next Larry Page or Sergey Brin won’t make a search engine. And the next Mark Zuckerberg won’t create a social network. If you are copying these guys, you aren’t learning from them.

Of course, it’s easier to copy a model than to make something new. Doing what we already know how to do takes the world from 1 to n, adding more of something familiar. But every time we create something new, we go from 0 to 1. The act of creation is singular, as is the moment of creation, and the result is something fresh and strange.

2. There is no formula for innovation.

The paradox of teaching entrepreneurship is that such a formula (for innovation) cannot exist; because every innovation is new and unique, no authority can prescribe in concrete terms how to be more innovative. Indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas.

3. The best interview question you can ask.

Whenever I interview someone for a job, I like to ask this question: “What important truth do very few people agree with you on?”

This is a question that sounds easy because it’s straightforward. Actually, it’s very hard to answer. It’s intellectually difficult because the knowledge that everyone is taught in school is by definition agreed upon. And it’s psychologically difficult because anyone trying to answer must say something she knows to be unpopular. Brilliant thinking is rare, but courage is in even shorter supply than genius.

Most commonly, I hear answers like the following:

“Our educational system is broken and urgently needs to be fixed.”

“America is exceptional.”

“There is no God.”

These are bad answers. The first and the second statements might be true, but many people already agree with them. The third statement simply takes one side in a familiar debate. A good answer takes the following form: “Most people believe in x, but the truth is the opposite of x.”

What does this have to do with the future?

In the monst minimal sense, the future is simply the set of all moments yet to come. But what makes the future distinctive and important isn’t that it hasn’t happened yet, but rather that it will be a time when the world looks different from today. … Most answers to the contrarian questions are different ways of seeing the present; good answers are as close as we can come to looking into the future.

4. A new company’s most important strength

Properly defined, a startup is the largest group of people you can convince of a plan to build a different future. A new company’s most important strength is new thinking: even more important than nimbleness, small size affords space to think.

5. The first step to thinking clearly

Our contrarian question – What important truth do very few people agree with you on? — is difficult to answer directly. It may be easier to start with a preliminary: what does everybody agree on?”

“Madness is rare in individuals
—but in groups, parties, nations and ages it is the rule.”
— Nietzche (before he went mad)

If you can identify a delusional popular belief, you can find what lies hidden behind it: the contrarian truth.


Conventional beliefs only ever come to appear arbitrary and wrong in retrospect; whenever one collapses we call the old belief a bubble, but the distortions caused by bubbles don’t disappear when they pop. The internet bubble of the ‘90s was the biggest of the last two decades, and the lessons learned afterward define and distort almost all thinking about technology today. The first step to thinking clearly is to question what we think we know about the past.

Here is an example Thiel gives to help illuminate this idea.

The entrepreneurs who stuck with Silicon Valley learned four big lessons from the dot-com crash that still guide business thinking today:

1. Make incremental advances — “Grand visions inflated the bubble, so they should not be indulged. Anyone who claims to be able to do something great is suspect, and anyone who wants to change the world should be more humble. Small, incremental steps are the only safe path forward.”

2. Stay lean and flexible — “All companies must be lean, which is code for unplanned. You should not know what your business will do; planning is arrogant and inflexible. Instead you should try things out, iterate, and treat entrepreneurship as agnostic experimentation.”

3. Improve on the competition — “Don’t try to create a new market prematurely. The only way to know that you have a real business is to start with an already existing customer, so you should build your company by improving on recognizable products already offered by successful competitors.”

4. Focus on product, not sales — “If your product requires advertising or salespeople to sell it, it’s not good enough: technology is primarily about product development, not distribution. Bubble-era advertising was obviously wasteful, so the only sustainable growth is viral growth.”

These lessons have become dogma in the startup world; those who would ignore them are presumed to invite the justified doom visited upon technology in the great crash of 2000. And yet the opposite principles are probably more correct.

1. It is better to risk boldness than triviality.
2. A bad plan is better than no plan.
3. Competitive markets destroy profits.
4. Sales matters just as much as product.”

To build the future we need to challenge the dogmas that shape our view of the past. That doesn’t mean the opposite of what is believed is necessarily true, it means that you need to rethink what is and is not true and determine how that shapes how we see the world today. As Thiel says, “The most contrarian thing of all is not to oppose the crowd but to think for yourself.

6. Progress comes from monopoly, not competition.

The problem with a competitive business goes beyond lack of profits. Imagine you’re running one of those restaurants in Mountain View. You’re not that different from dozens of your competitors, so you’ve got to fight hard to survive. If you offer affordable food with low margins, you can probably pay employees only minimum wage. And you’ll need to squeeze out every efficiency: That is why small restaurants put Grandma to work at the register and make the kids wash dishes in the back.

A monopoly like Google is different. Since it doesn’t have to worry about competing with anyone, it has wider latitude to care about its workers, its products and its impact on the wider world. Google’s motto—”Don’t be evil”—is in part a branding ploy, but it is also characteristic of a kind of business that is successful enough to take ethics seriously without jeopardizing its own existence. In business, money is either an important thing or it is everything. Monopolists can afford to think about things other than making money; non-monopolists can’t. In perfect competition, a business is so focused on today’s margins that it can’t possibly plan for a long-term future. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits.

So a monopoly is good for everyone on the inside, but what about everyone on the outside? Do outsize profits come at the expense of the rest of society? Actually, yes: Profits come out of customers’ wallets, and monopolies deserve their bad reputation—but only in a world where nothing changes.

In a static world, a monopolist is just a rent collector. If you corner the market for something, you can jack up the price; others will have no choice but to buy from you. Think of the famous board game: Deeds are shuffled around from player to player, but the board never changes. There is no way to win by inventing a better kind of real-estate development. The relative values of the properties are fixed for all time, so all you can do is try to buy them up.

But the world we live in is dynamic: We can invent new and better things. Creative monopolists give customers more choices by adding entirely new categories of abundance to the world. Creative monopolies aren’t just good for the rest of society; they’re powerful engines for making it better.

7. Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past.

Marx and Shakespeare provide two models that we can use to understand almost every kind of conflict.

According to Marx, people fight because they are different. The proletariat fights the bourgeoisie because they have completely different ideas and goals (generated, for Marx, by their very different material circumstances). The greater the difference, the greater the conflict.

To Shakespeare, by contrast, all combatants look more or less alike. It’s not at all clear why they should be fighting since they have nothing to fight about. Consider the opening to Romeo and Juliet: “Two households, both alike in dignity.” The two houses are alike, yet they hate each other. They grow even more similar as the feud escalates. Eventually, they lose sight of why they started fighting in the first place.”

In the world of business, at least, Shakespeare proves the superior guide. Inside a firm, people become obsessed with their competitors for career advancement. Then the firms themselves become obsessed with their competitors in the marketplace. Amid all the human drama, people lose sight of what matters and focus on their rivals instead.


Rivalry causes us to overemphasize old opportunities and slavishly copy what has worked in the past.

8. Last can be first

You’ve probably heard about “first mover advantage”: if you’re the first entrant into a market, you can capture significant market share while competitors scramble to get started. That can work, but moving first is a tactic, not a goal. What really matters is generating cash flows in the future, so being the first mover doesn’t do you any good if someone else comes along and unseats you. It’s much better to be the last mover – that is, to make the last great development in a specific market and enjoy years or even decades of monopoly profits.

Grandmaster José Raúl Capablanca put it well: to succeed, “you must study the endgame before everything else.”

Zero to One is full of counterintuitive insights that will help your thinking and ignite possibility.

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Marc Kneepkens's insight:

Thiel really thinks it through. It's philosophy in business, and original thinking as an ultimate way to live and do business.

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Add Value or Someone Else Will

Add Value or Someone Else Will | Competitive Edge |

The lure of maximising profits at the cost of creating customer value can be devastating in the long term.

In 2006, I moved to Mumbai and as soon as I landed, I looked for a taxi. A smiling taxi driver came up to me and asked me where I wanted to go. When I told him my location, his smile vanished. He was almost leaving when he stopped and asked me if I would be willing to pay Rs350, the fare for a long distance (and more profitable for him) carriage.

‘But I will pay by the meter? That is why you have it? Isn’t it?’ I said, irritated at the attempt to hustle me. The cabbie left without even arguing. I took the next taxi and paid Rs350 when I should have paid Rs100.

Even afterwards, the taxi experience annoyed me. Faulty meters, smelly interiors, no air-conditioning, bad maintenance and a jerky ride that tossed you back and forth every time the brakes were applied.

Everyone wants to grow. Therefore, the taxi driver’s inclination to increase profit cannot be frowned upon. However, he should have known that increasing profits without increasing value is a short-term high and, much like narcotics, can be devastating in the long term. 

Short-term gain, long-term pain

While taxi drivers continued to increase their profit through various means, the value delivered to the customer diminished. The void between price charged and value delivered expanded.

Then, in 2007, a new taxi service came and happily filled the void. While, the fare was about 20% higher, the value delivered was vastly superior.

Proper meters, clean interiors, well maintained vehicles, effective air-conditioning and most importantly, the taxi never refused to go where you wanted to go. In fact, the system remembered your most-frequented destinations saving you time reciting addresses repeatedly.

All in all, you could book a taxi in an instant and get transported to your destination comfortably, in time, and without looking like a zoo animal.

If you are not providing value, someone else will. Today, the old taxi service is without options except to ask the government for concessions. The new tax service, meanwhile, continues to grow. Now, it operates thousands of taxis and has spread across many cities of India. This reminded me of a parable I used in a training program.

The coal merchant

There once lived a coal merchant who had a shop in a village. Every day, the coal merchant would purchase coal from his suppliers at Rs100 and sell at Rs150, making a profit of Rs50. He wanted to grow and was impatient to increase his profits.

One day, an old friend stopped at his shop and made him an extraordinary offer: ‘I will sell you coal at Rs50’, he said.

Unable to conceal his excitement, the merchant asked him ‘How will you do it? The market rate is Rs100, why are you selling at Rs50?’

The friend looked around to make sure that no one was listening, he bent closer to the merchant and whispered in his ears: ‘this coal is very low quality but your customers wouldn’t know. They are little black rocks after all’

After seeing his friend off and tempted at the additional profit that he could generate, the merchant turned to his father.

‘The objective of business is to make profit, isn’t it?’ he asked his father.

‘Sure’ his father answered.

‘…and to grow your business, you need to make more and more profit’ he said further.

‘Yes’ said the father.

‘My friend is going to supply me coal at half the price. It is low quality coal but it will double our profit’ said the son, ‘I am confused. Is it dishonesty to try and increase your profit? We are not here to do charity either, are we?’

‘No, you are right, we are not here to do charity. We run business and profit is our right. But, What is the customers right?’ asked his father.

‘To get coal’ said the son.

‘Not just that. It is to get the benefit of the coal. They pay so that they can burn this coal and use that energy to make their lunch’ said the father, ‘right now, you are extracting the price for the coal and delivering the benefit of the coal to the customer. If you buy the bad quality coal, you are still extracting the price but are you delivering the benefit? Will the customer, after buying the bad quality coal, get the energy that they paid for?’

‘That is dis-honesty son. Seeking to exert your right and ignoring the customer’s right. Seeking to create profits without delivering the benefits.'

The lesson from the story is simple. There is no right to profit greater than the obligation to provide value.

Companies must never forget that their customers are under no obligation to part with a greater amount of their spending, just so they can show up on the Fortune 500. Their growth must be with the customers, not despite them. The Mumbai taxi service is a case in point.

Add value

This could appear to be a fight between large corporate structures and small mom-and-pop structures. Seeing it like that is a fallacy.

Looking at the retail sector in India, the biggest organised retail chains have had to face defeat at the hands of small neighbourhood retailers in numerous cases. The reason: convenience and personalised service. The neighbourhood retailer knows you by name even though he ensures that you never have to travel to his shop. His delivery person comes every day to your house, sometimes even for small (unviable) orders. The retailer celebrates festivals with you, congratulates you on your achievements, and participates in your sorrow, makes small talk with you about the upcoming cricket match and gives you credit (without filling up a form!). Clearly, there is a relationship that is more valuable to the customer than the lower price or choice that a supermarket offers.

The only fight here is to create value for the customer, in some way, whatever way. Bigger is not better. Focussed is better. There is always some value that you can add. Where there is a will to create value, there are many ways, and not all require you to be a large corporation willing to make million dollar investments.  

Large corporations and entrepreneurs, all want to grow and increase their profits. However, trying to increase profits without increasing value delivered to the customers is not only unfair, it is just bad business.

Venugopal Gupta is the founder of The Business Parables, a firm that helps organisations communicate goals and outcomes using the power of short stories. You can follow him on Twitter @venugopal_gupta.

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Via Kenneth Mikkelsen, Pascale Mousset, malek
Marc Kneepkens's insight:

Nice stories. Always keep 'adding value' in mind when running a business. It will pay off in the end.

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Innovation Excellence | Seven Things the Competent Innovation Manager Should Know

Innovation Excellence | Seven Things the Competent Innovation Manager Should Know | Competitive Edge |

f you have recently been promoted — or perhaps demoted — to the position of innovation manager, your first action has probably been to do a bit of research. In so doing, you may understandably have been overwhelmed by the amount of information on-line, in books and peddled by over-priced consultants. Worse, a lot of that information is contradictory, uses unintelligible jargon or requires you hire an over-priced consultant.

If you are feeling overwhelmed, don’t panic! I am here to help! Here are seven basic things every innovation manager should know. And if you have questions, please ask!

To read the full article, click on the title or image.

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Also check the article on 'innovation' posted today on 'Mobile Development News':

Steve Jobs' idea about innovation!

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Ben Horowitz On Management - Business Insider

Ben Horowitz On Management - Business Insider | Competitive Edge |

The excerpt below is from the lecture "How To Manage," by Ben Horowitz, investor, entrepreneur, and co-founder of venture capital firm Andreessen Horowitz. It appears in the online class "How To Start A Startup."
This text is annotated! Click on the highlights to read what others are saying. If you'd like to add your own insights, comments, or questions to specific parts of the lecture, visit the lecture page on Genius, highlight the relevant text, and click the button that pops up. Your annotation will appear both here and on Genius.

When Sam originally sent an email for me to do this course, he said "Ben can you teach a fifty minute course on management?" And I immediately thought to myself, "Wow, I just wrote a three hundred page book on management. So that book was entirely too long."

I didn't actually have time to collapse the three hundred pages into fifty minutes. Like Mark Twain, I didn't have time to write a good short letter, so I'm going to write a long letter. But in this case, I am going to teach exactly one management concept.

I see CEO's mess up this one management concept more consistently than anything else. From when they're very, very early to when they're very, very big as a company. It's the easiest thing to say and the most difficult to master. The concept in musical form is from Sly and the Family Stone. "Sometimes I'm right and I can be wrong. My beliefs are in my song. No difference what group I'm in."

That's the musical version of today's lesson. For those of you who are musical, you can leave now.

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How to Avoid Letting Choice Overload Your Customers

You need to take advantage of the power of choice in your business without overwhelming consumers.

We have an overwhelming amount of choices--and, as Americans, we make 70 different choices a day on average.

It's no wonder we are often indecisive and feel paralyzed with options.

The Downside of Choice Overload

Barry Schwartz famously described this phenomenon as "the paradox of choice." He writes, "When people have no choice, life is almost unbearable. As the number of available choices increases, as it has in our consumer culture, the autonomy, control, and liberation this variety brings are powerful and positive. But as the number of choices keeps growing, negative aspects of having a multitude of options begin to appear. As the number of choices grows further, the negatives escalate until we become overloaded. At this point, choice no longer liberates, but debilitates."

This debilitating feeling can have a couple of outcomes:

1. Decision paralysis

Jane Porter wrote on Fast Company about a time she couldn't make a decision, and it's all too relatable. Searching for a toilet brush for her new apartment, she discovered that Amazon sold 1,161 kinds of toilet brushes. After spending nearly an hour reading contradictory reviews and considering her choices, she said she "felt grumpy and tired and simply gave up."

2. Decreased satisfaction

In his TED talk, Schwartz described how, when we do make a choice between a number of options, we end up less satisfied with the outcome than we would have been if we had had fewer. He says this is because it's easy to imagine making different choice that would have been better. The feeling of regret subtracts from our satisfaction--the more options, the easier it is to regret anything at all about the option.

How to Be More Choosy About Your Choices

There are some ways to make these decisions a bit easier, whether you're the one choosing or providing options to customers of your own:

1. Trust the experts.

There's a reason Pandora exploded the way it did. It allowed users to discover new music by simply inputting a favorite song or genre--no choice overload involved. With 100 hours of content uploaded to every minute to YouTube alone, there is a lot of content to sift through on the Web. At my company, Pluto.TV, you simply put your trust in the experts to find the best of the best for you. Actual humans curate our 100+ video channels, so you can simply choose a topic that interests you, sit back, and watch.

2. Put limits on your options.

Even if there are tons of options in front of you, putting a little more thought into your decision can help cut down on frustration. For instance, instead of searching for the best-rated restaurants in your area, identify a specific type of food you're craving and filter by that type. This can help speed up your decision process and, hopefully, increase your satisfaction with your final choice.

3. Offer consumers fewer options.

In a TED talk, Sheena Iyengar discussed a study about the retirement decisions of nearly 1 million Americans from about 650 retirement plans. The study found the more funds that were offered in a plan, the fewer people participated. Furthermore, when there were too many choices, people's decision quality was actually affected negatively. Since too many options leads to reduced engagement and satisfaction, you're doing your customers a favor by paring down their choices.

4. Condition customers for complexity.

Iyengar also pointed out that people can more easily make complex decisions when the complexity is gradually increased. If you condition for complexity, the first decision is one of fewer categories and options than the ones that follow. Utilizing this method makes people more likely to participate in ongoing decisions.

The example she uses to illustrate this point is customizing a car online. With 60 different decisions in total, each choice varies in how many options are offered. Providing the easier choices first--a choice of four types of gears and four types of engines--keeps customers engaged in the process. Then they are able to choose from the 56 car colors available.

Too much choice can be completely overwhelming to even the savviest consumer. Avoid decision paralysis by simplifying choices for your customers, putting trust in experts, and setting limits on your options.

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How Underdogs Can Win

How Underdogs Can Win | Competitive Edge |

When Vivek Ranadivé decided to coach his daughter Anjali’s basketball team, he settled on two principles. The first was that he would never raise his voice. This was National Junior Basketball—the Little League of basketball. The team was made up mostly of twelve-year-olds, and twelve-year-olds, he knew from experience, did not respond well to shouting. He would conduct business on the basketball court, he decided, the same way he conducted business at his software firm. He would speak calmly and softly, and convince the girls of the wisdom of his approach with appeals to reason and common sense.

The second principle was more important. Ranadivé was puzzled by the way Americans played basketball. He is from Mumbai. He grew up with cricket and soccer. He would never forget the first time he saw a basketball game. He thought it was mindless. Team A would score and then immediately retreat to its own end of the court. Team B would inbound the ball and dribble it into Team A’s end, where Team A was patiently waiting. Then the process would reverse itself. A basketball court was ninety-four feet long. But most of the time a team defended only about twenty-four feet of that, conceding the other seventy feet. Occasionally, teams would play a full-court press—that is, they would contest their opponent’s attempt to advance the ball up the court. But they would do it for only a few minutes at a time. It was as if there were a kind of conspiracy in the basketball world about the way the game ought to be played, and Ranadivé thought that that conspiracy had the effect of widening the gap between good teams and weak teams. Good teams, after all, had players who were tall and could dribble and shoot well; they could crisply execute their carefully prepared plays in their opponent’s end. Why, then, did weak teams play in a way that made it easy for good teams to do the very things that made them so good?

To read the full article, click on the title or image.

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Via Richard Platt
Marc Kneepkens's insight:

Yes, long story, but really interesting. Change the way the game is played, or the business is done, and you increase your chances of winning.

Richard Platt's curator insight, June 21, 2014 7:13 PM

A lengthy but worthwhile read from Malcom Gladwell - Bottom Line: Don't play by the other guys' rules and you can win 63.5% of the time, this is based on you and your firm's capability not necessarily the effort, and only in specific areas of your opponent's blind spots

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The Secret to Highly Effective Marketing

The Secret to Highly Effective Marketing | Competitive Edge |
In this article, I'm going to give you the secret to highly effective marketing.Let me start with an example.Let's say your competitor runs an advertisement that reaches 10,000 target customers and gets these results.1 percent response rate...

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Marc Kneepkens's insight:

Find out more about Growthink's marketing products, watch this presentation, it's really interesting: "How to put together your marketing plan in 8 hrs or less"

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