1. | www.savonia.fi | Marketing issues in business planning Seppo Mönkkönen M.Sc Agric., Senior Lecturer in Business Economics Savonia University of Applied Sciences Iisalmi, Finland Innotools 14th April 2008 © Savonia University of Applied Sciences

2. | www.savonia.fi | What is Business plan? A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. The business goals may be for-profit or non-profit. For-profit business plans typically focus on financial goals. Non-profit and government agency business plans tend to focus on service goals

3. | www.savonia.fi | Internally or externally focused BP Externally focused plans target goals that are important to external stakeholders Internally focused business plans target intermediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organization

4. | www.savonia.fi | Content of a business plan EXAMPLE 1 Executive Summary 2 Organizational Background 3 Marketing Plan 4 Operational Plan 5 Financial Plan 6 Risk analysis 7 Decision Making Criteria There is no fixed content for a business plan Rather the content and format of the business plan is determined by the goals and audience

5. | www.savonia.fi | Marketing Plan Two aspects: 1 Understand markets and customers behavior Point 1Diffusion of innovations Point 2Producut life cycle (PLC) Point 3Market Segmentation 2 Marketing actions (Four P´s) Product Price Place Promotion

6. | www.savonia.fi | Diffusion of innovations

7. | www.savonia.fi | Cumulative diffusion of innovations

8. | www.savonia.fi | Product life cycle

9. | www.savonia.fi | Market introduction stage »cost high »sales volume low »no/little competition - competitive manufacturers watch for acceptance/segment growth losses »demand has to be created »customers have to be prompted to try the product Growth stage »costs reduced due to economies of scale »sales volume increases significantly »profitability »public awareness »competition begins to increase with a few new players in establishing market »prices to maximize market share

10. | www.savonia.fi | Mature stage »Costs are very low as you are well established in market & no need for publicity. »sales volume peaks »increase in competitive offerings »prices tend to drop due to the proliferation of competing products »brand differentiation, feature diversification, as each player seeks to differentiate from competition with "how much product" is offered »Industrial profits go down Decline or Stability stage »costs become counter-optimal »sales volume decline or stabilize »prices, profitability diminish »profit becomes more a challenge of production/distribution efficiency than increased sales

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13. Market Segmentation A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs A true market segment meets all of the following criteria: 1. it is distinct from other segments (heterogeneity across segments) 2. it is homogeneous within the segment (exhibits common attributes) 3. it responds similarly to a market stimuli 4. it can be reached by a market intervention

14. | www.savonia.fi | EXAMPLE

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16. Three possible strategies after market sementation 1. No segmentation in marketing => Same marketing to everybody 2. Concentrated marketing => Marketing for only one segment 3. Segmented marketing => Different marketing for different segment

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