Business Plan Preparation

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

2. Today Marketing Strategy Marketing Strategy Revenue Model Customer acquisition costs

3. Next Week Marketing Strategy Operations Plan Development Plan Walk an Order

4. 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

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

6. 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

7. Customer Research Marketing Strategy • Show your results • George’s Questionnaire - qualitative 20 people • Surveys – walk-up, mailed, email, on-line • Lurk & listen • How do customers pay?

8. Target Customer Strategy Marketing 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

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

10. Customers Buy Benefits Marketing Strategy Does your TC understand How will you convince?

11. You Must Prove That You Understand the Target Customer Marketing Strategy

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

13. Positioning Marketing Strategy • Positioning is relative to the competition • Overt or perceived • How are you unique & different? • Base on Buying Decision Criteria

14. Perceptual Map Attribute 1 Competitor 3 You Competitor 1 Competitor 2 Attribute 2 Marketing Strategy

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

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

17. Branding Marketing Strategy • 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

18. 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 • Features & benefits • New technology • New process

19. Pricing Strategy Marketing 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

20. 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

21. 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!

22. 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

23. 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

24. 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

25. 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

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 Financial Plans

27. Revenue Model Marketing Strategy

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

29. RevenueModel Marketing Strategy

30. RevenueModel Marketing Strategy

31. RevenueModel Marketing Strategy

32. RevenueModel Marketing Strategy

33. RevenueModel Marketing Strategy

34. RevenueModel Marketing Strategy

35. RevenueModel Marketing Strategy

36. RevenueModel Marketing Strategy

37. 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

38. 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

39. How MuchDo Your Customers Care? High InvolvementLow Involvement Easy to get attention Hard to get attention Will invest to upgrade Will delay upgrading Will try new brands Hard to change About “wants” About “needs”