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I. MARKET ANALYSIS
A. Target Market - Who are the customers?
1. We will be selling primarily to
(check all that apply):
Total Percent
of Business
a. Private sector
_______
______
b. Wholesalers
_______
______
c. Retailers
_______
______
d. Government
_______
______
e. Other
_______
______
2. We will be targeting
customers by:
a. Product
line/services.
We will target specific lines _________________
b. Geographic
area? Which areas? _________________
c. Sales? We
will target sales of _________________
d. Industry?
Our target industry is _________________
e. Other?
_________________
3. How much will our selected market
spend on our type of
product or service
this coming year? $_______________
B. Competition
1. Who are our competitors?
NAME
_____________________________________
ADDRES
_____________________________________
_____________________________________
Years in business
___________________
Market share
___________________
Price/Strategy
___________________
Product/Service
Features
___________________
NAME
______________________________________
ADDRESS
______________________________________
______________________________________
Years in business
___________________
Market share
___________________
Price/Strategy
___________________
Product/Service
Features
___________________
2. How competitive is the market?
High
____________________
Medium
____________________
Low
____________________
3. List below your strengths and
weaknesses compared to
your competition
(consider such areas as location, size
of resources,
reputation, services, personnel, etc.):
Strengths
Weaknesses
1.________________________ 1._______________________
2.________________________ 2._______________________
3.________________________ 3._______________________
4.________________________ 4._______________________
C. Environment
1. The following are some important
economic factors that
will affect our
product or service (such as country
growth, industry
health, economic trends, taxes,
rising energy
prices, etc.):
______________________________________________________
______________________________________________________
______________________________________________________
2. The following are some important
legal factors that
will affect our
market:
_____________________________________________________
_____________________________________________________
_____________________________________________________
3. The following are some important
government factors:
______________________________________________________
______________________________________________________
______________________________________________________
4. The following are other
environmental factors that
will affect our
market, but over which we have no
control:
______________________________________________________
______________________________________________________
______________________________________________________
II. PRODUCT OR SERVICE ANALYSIS
A. Description
1. Describe here what the
product/service is and what it
does:
______________________________________________________
______________________________________________________
______________________________________________________
B. Comparison
1. What advantages does our
product/service have over
those of the
competition (consider such things as
unique features,
patents, expertise, special training,
etc.)?
______________________________________________________
______________________________________________________
______________________________________________________
2. What disadvantages does it have?
______________________________________________________
______________________________________________________
______________________________________________________
C. Some Considerations
1. Where will you get your materials
and supplies?
______________________________________________________
2. List other considerations:
______________________________________________________
______________________________________________________
III. MARKETING STRATEGIES - MARKET MIX
A. Image
1. First, what kind of image do we
want to have (such as
cheap but good, or
exclusiveness, or customer-
oriented, or
highest quality, or convenience, or
speed, or ...)?
______________________________________________________
B. Features
1. List the features we will
emphasize:
a.___________________________________________________
b.___________________________________________________
c.___________________________________________________
C. Pricing
1. We will be using the following
pricing strategy:
a. Markup on cost
____ What % markup? ______
b. Suggested price
____
c. Competitive
____
d. Below
competition ____
e. Premium price
____
f. Other
____
2. Are our prices in line with our
image?
YES___
NO___
3. Do our prices cover costs and
leave a margin of profit?
YES___
NO___
D. Customer Services
1. List the customer services we
provide:
a.
____________________________________________
b.
____________________________________________
c.
____________________________________________
2. These are our sales/credit terms:
a.
_____________________________________________
b.
_____________________________________________
c.
_____________________________________________
3. The competition offers the
following services:
a.
______________________________________________
b.
______________________________________________
c.
______________________________________________
E. Advertising/Promotion
1. These are the things we wish to
say about the business:
______________________________________________________
______________________________________________________
______________________________________________________
2. We will use the following
advertising/promotion sources:
1. Television
________
2. Radio
________
3. Direct mail
________
4. Personal
contacts ________
5. Trade
associations ________
6. paper
________
7. Magazines
________
8. Yellow Pages
________
9. Billboard
________
10. Other
________
3. The following are the reasons why
we consider the media
we have chosen to
be the most effective:
_______________________________________________________
_______________________________________________________
_______________________________________________________
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| UNDERSTANDING THE
MARKETPLACE
Marketing plays a vital role in successful business ventures. How
well the plan you develop markets your business, along with the
management and financial management plans, will ultimately
determine your degree of success or failure. The key elements of
a successful marketing plan are to 1) know your customers --
their likes, dislikes and expectations, and 2) to know your
competitors -- their strengths and weaknesses. By identifying
these factors, you can develop a marketing strategy that will
allow you to arouse and fulfill customers needs, better
understand competitors and identify changes in the marketplace
that can affect your bottom line.
The purpose of the marketing plan is to define your market, i.e.,
identify your customers and competitors, to outline a strategy
for attracting and keeping customers and to identify and
anticipate change. Your business will not succeed simply because
you want it to succeed. It takes careful planning and a thorough
understanding of the marketplace to develop a strategy that will
ensure success.
Understanding the Marketplace
Generally, the first and most important step in understanding the
market is to study it through market research. In the case of a
franchise, the franchisor has developed a marketing program, so
you will need to review the program he or she has provided. Look
over the plan to determine what product/service you will offer
and write a description of it. Even though a franchisor has
described your product or service, it is a good idea to develop
and write your own description because this process helps you to
know your product or service--a key variable in any successful
marketing plan. When describing your product or service outline
what you feel are its unique aspects, and explain how or why
these aspects will appeal to customers. Emphasize the special
features that you feel are its selling points. These features are
what you will use to convince customers to purchase your product
or service.
Next go over sales projections, determining if there is a demand
for the product or service. In the case of a franchise, the
franchisor will have developed the projections. Study this data
to see how he or she arrived at these projections. This will help
you to better understand how the marketplace operates relative to
your product/service, and it can help you develop the skills
necessary to identify and anticipate changes in the marketplace.
Start your own file on marketplace trends. Periodically review
your data, looking for shifts in the market. If changes are
occurring, you should modify the marketing plan to coincide with
these changes. In franchise operations, it is customary for the
franchisor to update the marketing plan periodically to reflect
changes in the marketplace and to keep the marketing program
current.
A marketing plan should answer these questions:
* Is this product or service in constant demand?
* How many competitors provide the same product or
service?
* Can you create a demand for your service or
product?
* Can you effectively complete in price, quality and
delivery?
* If a franchise, will the franchisor price the
product or
service to give you the projected profit?
Review your program to ensure that it answers these questions. If
your plan doesn't answer the questions, it will need to be
modified, or you will need to devise a strategy that will provide
a means for answering them. When you are satisfied that you
understand the program, how the market operates and how to
identify market shifts and trends, start writing the marketing
section of your business plan.
Even if you adopt a marketing program that has been developed
elsewhere, it is your responsibility to promote your product or
service by cultivating the marketplace, i.e., attracting and
keeping customers. You can accomplish this aim by knowing your
market, your customers, your competitors and your product/
service. Don't rely solely on the program provided by a
franchisor or others, gather and assess your own data using the
techniques outlined in your plan. By gathering and analyzing this
information, you will be better able to determine if your program
is in line with your competitors, if it is in line with industry
averages and what adjustments you can make to improve your
overall competitiveness.
A sample "Marketing Plan" is attached as part of Appendix I.
Study it carefully, then try to develop a similar program for
your business plan.
MARKET RESEARCH
Strategies for Researching the Market
Researching your market is perhaps the easiest way to assess it.
Market research does not have to be costly, nor does it have to
be a complex process. It can be as simple and as easy as
surveying a cross-section of your consumers (focus group) to get
their opinions about the product or service you will be offering,
or conducting a telephone or mail survey. The disadvantages of
using the telephone or mail survey method are the individuals you
contact may not be interested in responding to a survey. Other
market research techniques include analyzing demographic data,
such as population growth/decline rate; age range, sex,
income/educational level; brainstorming with family and friends,
focus group interviews. Whatever method you use, your focus
should be on gathering enough information to determine who your
potential customers are--their needs, wants and expectations; if
there is a demand for your product or service; who your
competitors are and how well they are doing.
Market research should answer questions such as:
* Who are your customers and potential customers?
* What kind of people are they?
* Where do they live?
* Can and will they buy the product or service
you're
offering?
* Are you offering the kinds of goods or services
they want
-- at the best place, the best time and best
amounts?
* Are your prices consistent with what the buyers
view as the
products' values?
* Are you applying the promotional programs in a way
that
will bring about success?
* What do customers think of your franchise?
* Who are your competitors?
* If a franchise, how does your operation compare
with the
competition?
While there are some disadvantages to market research--it's a
costly, time-consuming process, builds in biases that distort
information, ignores answers or lets arrogance or hostility cut
off communications at some point in the marketing process--the
advantages, however, outweigh the disadvantages. Don't forego
this process or stop halfway because you are not getting the
desired results. This may be an indication that you are going
into the wrong business or that there isn't a market for your
product or service. Don't be discouraged. You simply may need to
modify your original plan.
A few of the benefits of market research are outlined below.
* Learning who your customers are and what they
want.
* Learning how to reach your customer and how
frequently you
should try to communicate with them.
* Learning which appeals are most effective and
which ones
aren't.
* Learning the relative successes of different
marketing
strategies in relation to their return on
investment.
While market research may appear to be a tedious, time-consuming
process, it is necessary if you want to be successful. Think of
market research as simply a method of finding out what catches
customers' attention by observing their actions and drawing
conclusions from what you see and as an organized way of finding
objective answers to questions every business owner and manager
must answer in order to succeed. Market research focuses and
organizes marketing information, ensuring that it is timely and
that it provides what you need to:
* reduce business risks,
* spot problems and potential problems in your
current
market,
* identify and profit from sales opportunities, and
* get basic facts about your markets to help you
make better
decisions and set up plans of action.
If viewed from this stand point, market research is an invaluable
tool that can save you time, effort and money.
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