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

Tonight Marketing Strategy Revenue Model In the Fire Elevator speech Preliminary Industry Analysis Competitive Advantage Model company description Elevator speech Hand-in 10 Call Reports Competitive matrix Team meetings Business Plan Preparation: Marketing Strategy

Next Week Operations Plan Development Plan Marketing Workshops Tues Mar 7 room ? 6:00 to 7:00pm Business Plan Preparation: 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 Business Plan Preparation: Marketing Strategy

Marketing Plan Objectives Build on Market & Industry Analysis Define the strategies & programs to exploit the opportunity Business Plan Preparation: Marketing Strategy

Marketing Plan Outline Target Market Strategy Channel Strategy Positioning Product/Service Strategy Pricing Strategy E-commerce Communications Strategy Sales Strategy Revenue Model Business Plan Preparation: 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 Child care service Who makes final decision? Who else involved? Business Plan Preparation: Marketing Strategy

How Do Customers Make Decisions? 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 Where: retail stores, mail order, internet When: time of year, month and day; seasons; end fiscal year How: how collect info, sales people, brochures, TV, internet how make decision: emotional, holistic, automatic, spontaneous Initiator baby diapers - mom Influencer - grandmother, other moms, dad Decider - mom Purchaser - mom User – baby Initiator purse – women, husband, family Influencer – women of same demographic, friends, husband, Oprah Decider - women Purchaser – women, husband, boyfriend User - women Business Plan Preparation: Marketing Strategy

Channel Describe and justify the distribution channels you will use Potential channels Distributors, wholesalers, retailers OEM’s & VAR’s E-commerce Identify specific companies Describe how you will gain access to the channels Decision making process How you will deliver to your customers? Business Plan Preparation: Marketing Strategy

Positioning Positioning statement Positioning Positioning statement Describes market/industry, target customer, important features, benefits What must target customer believe about your product What features & benefits are most persuasive to get the customer to act? depends on how persuasive Name of your company Company characteristics – essence of personality, tone & manner Business Plan Preparation: Marketing Strategy

Positioning Statement SST Corporation “SST is a stainless steel toothbrush company. By its one bristle brush made of high tensile stainless steel, it provides an exhilarating tooth cleaning experience to thrill-seeking X-gen consumers” Business Plan Preparation: Marketing Strategy

Positioning Statement Dell Computer “Dell Computer sells personal computers to consumers. Our build-to-order manufacturing and customer-direct sales enable us to offer custom built computers at very competitive prices. Our customers get the computer that they have always imagined and save money.” Business Plan Preparation: Marketing Strategy

Positioning Statement Vic’s Coffee “Vic’s Coffee is a Boulder based coffee house. Its gourmet coffee, convenient and fast service, provide a welcoming environment for people who want to meet with their friends or a stimulating morning coffee for on-the-go business people.” Business Plan Preparation: Marketing Strategy

Attribute Map Attribute 1 You Attribute 2 Competitor 3 Competitor 1 Exercise: Take 5 minutes and have each team present Use Spectrum analysis Business Plan Preparation: Marketing Strategy

Hot Chocolate Flavour HC Convenience Brown Palace Ski Resort cafe Hershey packets Convenience Exercise: Take 5 minutes and have each team present Use Spectrum analysis Business Plan Preparation: Marketing Strategy

Hot Chocolate “Coolness” HC Price Ski Resort cafe Hershey packets Exercise: Take 5 minutes and have each team present Use Spectrum analysis Brown Palace Business Plan Preparation: Marketing Strategy

Smooth Grooves Convenience SG Quality of Repair D-I-Y Internet Mail In Exercise: Take 5 minutes and have each team present Use Spectrum analysis Mail In Business Plan Preparation: Marketing Strategy

Product/Service Strategy 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 Business Plan Preparation: Marketing Strategy

Pricing Strategy Describe and justify your pricing strategy Provide evidence that your target market will accept your price Position your strategy relative to current and potential competition Low price usually is NOT a good strategy! Business Plan Preparation: Marketing Strategy

How determine prices? Approaches Not just a positioning tool How determine prices? Approaches Cost + Industry markup - keystone Competition Target market Value added Not just a positioning tool Measure of management Commodity pricing Set by the market Supply and demand Based on competitor(s) price Value pricing - how much the customer is willing to pay for value received Payback period – depends on impact on company profit Industry rule of thumb – keystone pricing is common in retail businesses and equals purchase cost + 100% markup Introductory low price to get customers to use Cost plus + markup Razor & razor blade E-commerce – transaction fee, advertising, intermediary commission, affiliate commission fee, subscription fee A la carte Business Plan Preparation: Marketing Strategy

Communications How you will communicate with current and potential customers? Advertising Public relations Personal selling Printed materials Exhibitions Why is this the most effective strategy in reaching your target market? Be imaginative! Be a guerilla! Business Plan Preparation: 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 Company sales force Manufacturer's reps Telephone solicitors How will you recruit, train, and compensate our sales force? How will you support our sales effort?   Internal staff Service operations Business Plan Preparation: Marketing Strategy

What is a Revenue Model? Market potential Market share Size & growth Market share Penetration rate Roll-out strategy Product/Service offered Range & mix New Products/Services Obsolescence Frequency of purchase – per day, week, month Capacity Utilization Channel strategy - discount Prices Business Plan Preparation: Marketing Strategy

Revenue Drivers Number of customers, transactions or units Price per customer, transaction or unit Average revenue per customer or transaction Distribution channel discount Market penetration Response rate Churn rate Growth rate New services or product How measure? Business Plan Preparation: Marketing Strategy