Business Plan Preparation

1. Business Plan Preparation Frank MoyesLeeds College of Business University of ColoradoBoulder, Colorado Marketing Strategy

2. Tonight • Marketing Strategy • Revenue Model • Customer surveys • In the Fire – Industry Analysis & Model Company • Hand-in • 10 Call Reports • Competitive matrix • Model company description • Elevator speech Marketing Strategy

3. Next Week • Operations Plan • Development Plan • Supply chain • Walk an order • Review status of plans • Hand-in: Customer Survey questionnaire • Workshop Engineering: Marketing Tuesday 6:30pm? Marketing Strategy

4. Business Plan Elements • Executive Summary • Company Overview • Market & Industry Analysis • Product/Service Description • Marketing Plan • Operations Plan • Development Plan • Management • Competitive Advantage • Financial Plan • Funding Marketing Strategy

5. Marketing Plan Objectives • Build on Market & Industry Analysis • Define the strategies & programs to exploit the opportunity Marketing Strategy

6. Marketing Plan Outline • Customer Research • Target Market Strategy • Channel Strategy • Positioning • Product/Service Strategy • Pricing Strategy • E-commerce • Communications Strategy • Sales Strategy • Revenue Model Marketing Strategy

7. Customer Research • Show your results • Questionnaire - qualitative 20 people • Surveys – walk-up, mailed, email, on-line • Prove • You solve a problem • Features are wanted • Customer understand the benefits • Customer will pay your price • Don’t cook the books Marketing Strategy

8. Target Market Strategy • Consumers vs. purchasers • Profile of the customers you will serve • Consumer: demographics, psychographics & values • Business: industry, size, location, purchase decision • How will you overcome brand loyalty? What will cause customers to switch? • Future markets Marketing Strategy

9. 0 How Do Customers Make Decisions? • Decision making process – where, when & how • Initiator, Influencer, Decider, Purchaser & User • Identify criteria used to make decisions • Criteria may be different than your features • Customers buy benefits Marketing Strategy

10. Channel • Describe and justify the distribution channels • Potential channels • Distributors, wholesalers, retailers • OEM’s & VAR’s • E-commerce • Describe how you will gain access to the channels • Identify specific companies • Decision making process • Delivery to your customers, eg UPS is not the channel Marketing Strategy

11. Positioning • What must target customer believe about you • Positioning is in the mind of the customer, relative to the competition • “perceptions, impressions and feelings” • How are you unique & different? Marketing Strategy

12. 0 Positioning Strategy • Positioning statement • Describes market/industry, target customer, important features, benefits • Use your Value Proposition • What features & benefits are most persuasive to get the customer to act? • Other considerations • Name of your company • Company characteristics – essence of personality, tone & manner Marketing Strategy

13. Attribute Map Attribute 1 Competitor 3 You Competitor 1 Competitor 2 Attribute 2 Marketing Strategy

14. Hot Chocolate Flavour Brown Palace HC Ski Resort cafe Hershey packets Convenience Marketing Strategy

15. Hot Chocolate “Coolness” HC Ski Resort cafe Hershey packets Price Brown Palace Marketing Strategy

16. Product/Service Strategy • Not the description • Product/service roll out • Initial product/services • Future product/services • Enhance the product/service with operations & service • Actions to sustain competitive advantage • New features & benefits • New technology • New process Marketing Strategy

17. Pricing Strategy • Describe and justify your pricing strategy • Provide evidence that your target market will accept your price • Position your pricing relative to current and potential competition • Low price usually is NOT a good strategy! • Measure of management Marketing Strategy

18. 0 What Are the Pricing Methods? • Commodity pricing • Set by the market • Supply and demand • Seasonality & perishability • Competition • Value pricing - how much is customer willing to pay? • Payback period – depends on impact on company profit • Rule of thumb – Keystone • Introductory low price to get customers to use • Cost plus – markup • Razor & razor blade • A la carte Marketing Strategy

19. Communications • How you will communicate with current and potential customers? • Advertising – paid advertising newspapers, magazines, TV, internet • Public relations – articles in paper, journals, blogs, websites • Printed materials – flyers, brochures • Performances, concerts, exhibitions • Exhibitions • Why is this the most effective strategy? • Be imaginative! Be a guerilla! Marketing Strategy

20. 0 Guerilla Examples I • New restaurant invites local hairdressers for free meal just after opening • Mattress retailer has sleep over advertising on the ceiling of a retail store • News is created so it will be covered in local newspaper • Computer store does computer training for underprivileged kids • Owner makes bold predictions, does something unusual • Articles are written by the entrepreneur for newspapers Mike Morris, Syracuse University Marketing Strategy

21. Reciprocal advertising: two businesses mention one another in their ads Store offers discount card/coupon that appreciates in value each time it is used Coupon that is worth something different each time it is used Theatre places speakers outside front of facility with movies soundtracks playing; bakery purposely lets smells waft into customer passageway of mall 0 More Guerilla Examples II Mike Morris, Syracuse University Marketing Strategy

22. 0 More Examples III • Bowling alley charges based on number of bowling pins customer knocks down • Bicycle retailer puts promotional tags on bike racks around town • Day care center adds cameras and streaming videos so parents can see how children are treated • Flower shop with lack of visibility at their location decorates popular park and some small cafes in the area with creative and simple flower arrangements Mike Morris, Syracuse University Marketing Strategy

23. How will you get orders? Personal selling Online purchasing TV infomercials Direct mail 800 telephone Who will do the selling? An internal sales force Field sales force Manufacturer's reps Telephone solicitors How will you recruit, train, and compensate our sales force? How will you support the sales effort?   Internal staff Service operations Sales Strategy Marketing Strategy

24. Revenue Model Marketing Strategy

25. Two Approaches • Top down – market penetration & timing • Bottom up – pipeline, revenue by customer Marketing Strategy

26. Revenue Model Variables • Market potential - number of customers, transactions or units, purchases • Size & growth • Market share - penetration rate • Product/Services offered • Roll-out strategy • Range & mix • New Products/Services • Obsolescence • Frequency of purchase – per day/week/month • Capacity Utilization – per time period, event • Prices • Price per customer, transaction or unit • Average revenue per customer or transaction • Channel strategy - discount Marketing Strategy

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35. Revenue Model (Bottom-up) • Identify specific customers • Identify decision maker • Determine • Annual purchases today & future • Who purchase from & level of satisfaction • What do you need to do to get an order? • If you meet the criteria, how much business can you expect? Marketing Strategy