Business Plan Preparation

Frank MoyesLeeds College of Business

University of ColoradoBoulder, Colorado

Marketing Strategy

Tonight Marketing Strategy Revenue Model Customer acquisition costs

Marketing Strategy

Next Week Operations Plan Development Plan Walk an Order

Marketing Strategy

Business Plan Elements

Executive Summary Company Overview Market & Industry Analysis Product/Service DescriptionMarketing Plan Operations Plan Development Plan Management Competitive Advantage Financial Plan Funding

Marketing Strategy

Marketing Plan Objectives

Build on Market & Industry Analysis Define the strategies & key actions to

exploit the opportunity

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

Marketing Strategy

Customer Research Show your results

George’s Questionnaire - qualitative 20 people Surveys – walk-up, mailed, email, on-line Lurk & listen

How do customers pay?

Marketing Strategy

Target Customer Strategy

Profile of the target customers Demographics, psychographics, etc. Photo

How does TC perceive products/services? How will you overcome brand loyalty? What

will cause customers to switch? Spend money?

Identify first 10 customers Future markets

Marketing Strategy

How Do Customers Make Decisions?

Where, when & how Initiator, Influencer, Decider, Purchaser &

User Identify criteria used to make decisions

Criteria may be different than your features

Where get information, advice

Marketing Strategy

Customers Buy Benefits Does your TC understand How will you convince?

Marketing Strategy

You Must Prove That You Understand the Target Customer

Marketing Strategy

Channel 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 What is the decision making process Delivery to your customers, e.g. UPS is not the

channel

Marketing Strategy

Positioning Positioning is relative to the competition

Overt or perceived

How are you unique & different? Base on Buying Decision Criteria

Marketing Strategy

Perceptual Map

Attribute 1

Attribute 2

You

Competitor 2

Competitor 3

Competitor 1

Marketing Strategy

Hot Chocolate

Flavour

Convenience

HC

Hersheypackets

Ski Resortcafe

Brown Palace

Marketing Strategy

Hot Chocolate

“Coolness”

Price

HC

Brown Palace

Ski Resortcafe

Hersheypackets

Marketing Strategy

Branding Perceptions, impressions and feelings

What must target customer believe about you

Every thing you do supports this Other

Name of your company Company characteristics – essence of

personality, tone & manner

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 Features & benefits New technology New process

Marketing Strategy

Pricing Strategy

Describe and justify your pricing strategy Provide evidence that your target

customer 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

What Are the Pricing Methods? 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

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!

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

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

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

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?  

Internal staff Service operations

Marketing Strategy

Financial Plans 26

Customer Acquisition Costs

Costs to get a customer Sales salaries, commissions Advertising & promotion Customer & tech support Website Travel & entertainment

Number of customers

Costs to Get a Customer Number of Customers

Revenue Model

Marketing Strategy

Two Approaches Top down – market penetration &

timing Bottom up – pipeline, revenue by

customer

Marketing Strategy

Revenue Model

Marketing Strategy

Revenue Model

Marketing Strategy

Revenue Model

Marketing Strategy

Revenue Model

Marketing Strategy

Revenue Model

Marketing Strategy

Revenue Model

Marketing Strategy

Revenue Model

Marketing Strategy

Revenue Model

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

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?

Marketing Strategy

How MuchDo Your Customers Care?Do Your Customers Care?

High Involvement Low Involvement

Easy to get attention Hard to get attention

Will invest to upgrade Will delay upgrading

Will try new brands Hard to changeAbout “wants” About “needs”