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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”
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