1. Marketing Strategy Business Plan Preparation Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado

2. Marketing Strategy Tonight  Marketing Strategy  Revenue Model  Customer surveys  Margins – didn’t cover last week  In the Fire – Industry Analysis & Model Company  Hand-in  10 Call Reports  Competitive matrix  Model company description

3. Marketing Strategy Next Week  Operations Plan  Development Plan  Review status of plans  Hand-in: Customer Survey questionnaire  Wednesday Office Hours two weeks 3:00 to 4:30

4. Marketing Strategy 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

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

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

7. Marketing Strategy 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

8. Marketing Strategy 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

9. Marketing Strategy 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

10. Marketing Strategy 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

11. Marketing Strategy 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?

12. Marketing Strategy 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

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

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

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

16. Marketing Strategy 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

17. Marketing Strategy 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

18. Marketing Strategy 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

19. Marketing Strategy 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!

20. Marketing Strategy 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

21. Marketing Strategy More Guerilla Examples II  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 Mike Morris, Syracuse University

22. Marketing Strategy 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

23. Marketing Strategy 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?  How will you support the sales effort?  Internal staff  Service operations

24. Marketing Strategy Revenue Model

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

26. Marketing Strategy 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

27. Marketing Strategy 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?

28. Revenue Model

36. Marketing Strategy Margins  % Gross Profit Margin  % Contribution Margin  % Net Profit Margin  % Operating Expenses Revenue – COG’s Revenue Revenue – Variable Costs Revenue Net Earnings Revenue Sales, General & Admin Revenue

37. Margins %