Marketing Strategy Business Plan Preparation
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  • Most important part of the Bplan
  • Child care service Who makes final decision? Who else involved?
  • 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
  • Bicycle type Racing Road Mountain Cross bike Cruiser Descent MBX Price Performance: speed, handling, ride comfort, Durability Quality Weight Design High tech Aesthetics Benefits Who is the TM? Kids Teenagers Racers Parents with Kids Baby Boomers Tourist locations – hotels Transport to work Channel High end bike retailers – University Bikes; Pro Peleton Bike retail chains – Performance Sports retailers – Garts Mass retailers – Walmart Catalog Internet Rental Direct sell Competition Huffy Asia Trek Kestrel Custom
  • depends on how persuasive
  • Exercise: Take 5 minutes and have each team present Use Spectrum analysis
  • Exercise: Take 5 minutes and have each team present Use Spectrum analysis
  • Exercise: Take 5 minutes and have each team present Use Spectrum analysis
  • 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 Max price – what will attract enough customers Min price – lowest price to make a profit

Transcript

  • 1. Business Plan Preparation Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado
  • 2. Tonight
    • Marketing Strategy
    • Revenue Model
    • Customer surveys
    • Margins – didn’t cover last week
    • In the Fire – Industry Analysis & Model Company
    • Hand-in
      • 10 Call Reports
      • Competitive matrix
      • Model company description
  • 3. Next Week
    • Operations Plan
    • Development Plan
    • Review status of plans
    • Hand-in: Customer Survey questionnaire
    • Wednesday Office Hours two weeks 3:00 to 4:30
  • 4. 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
  • 5. Marketing Plan Objectives
    • Build on Market & Industry Analysis
    • Define the strategies & programs to exploit the opportunity
  • 6. Marketing Plan Outline
    • Customer Research
    • Target Market Strategy
    • Channel Strategy
    • Positioning
    • Product/Service Strategy
    • Pricing Strategy
    • E-commerce
    • Communications Strategy
    • Sales Strategy
    • Revenue Model
  • 7. Customer Research
    • Show your results
      • Questionnaire - qualitative 20 people
      • Surveys – walk-up, mailed, email, on-line
    • Prove
      • You solve a problem
      • Features are wanted
      • Customer understand the benefits
      • Customer will pay your price
    • Don’t cook the books
  • 8. 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
  • 9. 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
    • Customers buy benefits
    0
  • 10. Channel
    • 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
      • Decision making process
    • Delivery to your customers, eg UPS is not the channel
  • 11. Positioning
    • What must target customer believe about you
    • Positioning is in the mind of the customer, relative to the competition
    • “perceptions, impressions and feelings”
    • How are you unique & different?
  • 12. Positioning Strategy
    • Positioning statement
      • Describes market/industry, target customer, important features, benefits
      • Use your Value Proposition
    • What features & benefits are most persuasive to get the customer to act?
    • Other considerations
      • Name of your company
      • Company characteristics – essence of personality, tone & manner
    0
  • 13. Attribute Map Attribute 1 Attribute 2 You Competitor 2 Competitor 3 Competitor 1
  • 14. Hot Chocolate Flavour Convenience HC Hershey packets Ski Resort cafe Brown Palace
  • 15. Hot Chocolate “ Coolness” Price HC Brown Palace Ski Resort cafe Hershey packets
  • 16. 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
      • New features & benefits
      • New technology
      • New process
  • 17. Pricing Strategy
    • Describe and justify your pricing strategy
    • Provide evidence that your target market will accept your price
    • Position your pricing relative to current and potential competition
    • Low price usually is NOT a good strategy!
      • Measure of management
  • 18. What Are the Pricing Methods?
    • Commodity pricing
      • Set by the market
      • Supply and demand
      • Seasonality & perishability
    • Competition
    • Value pricing - how much is customer willing to pay?
    • Payback period – depends on impact on company profit
    • Rule of thumb – Keystone
    • Introductory low price to get customers to use
    • Cost plus – markup
    • Razor & razor blade
    • A la carte
    0
  • 19. 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!
  • 20. 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
    0 Mike Morris, Syracuse University
  • 21. 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
    0 Mike Morris, Syracuse University
  • 22. 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
    0 Mike Morris, Syracuse University
  • 23. 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
  • 24. Revenue Model
  • 25. Two Approaches
    • Top down – market penetration & timing
    • Bottom up – pipeline, revenue by customer
  • 26. 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
  • 27. 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?
  • 28. Revenue Model
  • 29. Revenue Model
  • 30. Revenue Model
  • 31. Revenue Model
  • 32. Revenue Model
  • 33. Revenue Model
  • 34. Revenue Model
  • 35. Revenue Model
  • 36. Margins
    • % Gross Profit Margin
    • % Contribution Margin
    • % Net Profit Margin
    • % Operating Expenses
    Revenue – COG’s Revenue Revenue – Variable Costs Revenue Net Earnings Revenue Sales, General & Admin Revenue
  • 37. Margins %