Business Plan Preparation

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

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

3. Next Week Marketing Strategy • Business Analysis Assignment • Present Mar 5 • PowerPoint 10 minutes, 6-8 slides • Market Analysis • Industry Analysis • Product/Service Description • Profitability

4. Business Analysis Assignment (cont) Marketing Strategy • Hand-in 3 ring binder • Market Analysis - draft • Industry Analysis - draft • Product/Service Description - draft • Value Chain analysis • Competitive matrix • Financial COMP’s • Revenue Model • 20 interview Call Reports

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

6. Marketing Plan Objectives Marketing Strategy Build on Market & Industry Analysis Define the strategies & key actions to exploit the opportunity

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

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

9. 0 How Do Customers Make Decisions? Marketing Strategy • 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

10. Target Market Strategy Marketing 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

11. Channel Marketing Strategy • 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, e.g. UPS is not the channel

12. Positioning Marketing Strategy • Positioning is in the mind of the customer, relative to the competition • What must target customer believe about you • “perceptions, impressions and feelings” • How are you unique & different? • Other considerations • Name of your company • Company characteristics – essence of personality, tone & manner

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 Marketing 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 • What features & benefits are most persuasive to get the customer to act?

17. Pricing Strategy Marketing 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

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

19. Communications Marketing Strategy • 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!

20. 0 Guerilla Examples I Mike Morris, Syracuse University Marketing Strategy • 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

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 Mike Morris, Syracuse University Marketing Strategy • 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

23. Sales Strategy • 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 Marketing Strategy

24. Revenue Model Marketing Strategy

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

26. RevenueModel Marketing Strategy

27. RevenueModel Marketing Strategy

28. RevenueModel Marketing Strategy

29. RevenueModel Marketing Strategy

30. RevenueModel Marketing Strategy

31. RevenueModel Marketing Strategy

32. RevenueModel Marketing Strategy

33. RevenueModel Marketing Strategy

34. Revenue Model Variables Marketing Strategy • 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

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