MARKETING

The marketing section should:

• Identify your prospective customers

• Describe the size of the market for your product or service.

• Explain how you plan to enter the market.

Chapter 5Slide 1

Marketing

• Describe advantages over the competition in areas such as: • Performance

• Quality

• Price

• Promotion

• Reliability

• Public image or reputation

• Distribution

Chapter 5Slide 2

What is the Marketing Section?

• The purpose of the marketing section of the business plan is to convince readers that your business or planned venture provides a great opportunity.

• The Marketing Section generally consists of four main components: • The Market Description

• The Customer Profile

• The Competition

• The Marketing Plan

Market Description

• The Market Description describes your market in terms of: • Size

• Value

• History

• Recent growth trends

• Anticipated future growth.

• If there are any major barriers or obstacles that will effect your entry in to the industry, they too should be discussed

Market Description

• Industry information can be found in: • Trade Publications

• Business Magazines

• Marketing Firms

• Chamber of Commerce

• Small Business Associations

• Internet

• Suppliers

Customer Profile

• The second component of the marketing section outlines your Customer Profile.

• Knowing the characteristics, attributes, behaviors, and traits of your customers is extremely important to the success of your business.

• Experts suggest that three segmentation variables may be used: • Demographics

• Geographics

• Psychographics

Customer Profile – Geographic Segmentation

• Used to identify specific regions, city sizes, and densities.

• Region: • Eastern US, Central US, Western US, Canadian

Prairies, Ohio, Utah, Ontario, etc..

• City Size:• Under 1000, 1000-2999, 3000-4999, 5000-9999,

10000-14999, 15000-24999, 25000-49999, 50,000-99 999, 100,000-199,999, 200,000-299,999, 300,000-399,999, 400,000-499,999, over 500,000

• Density :• Urban, suburban, rural

Customer Profile – Demographics

• Demographic Segmentation divides the market into groups based upon variables such as: • Family Size: -

• 1-2, 3-4, 5-6, 7+.

• Family Structure: - • Young & single with no kids, young & married with no kids;

young & married with youngest child under 5; young & married with youngest child 5 or over; older & married with children; older & married with no children; divorced, single; etc

• Income: -• Under $10,000, 10,000-14 ,999, 15 000-24 999, 35 000-49

999, 50 000 and over. What Income level will most of your customers fall into? Is income a major issue?

Customer Profile – Demographics

• Occupation: - • Professional managers and officials, business

owners; clerical workers, craftspeople, farmers, homemakers, unemployed, retired, students.

• Education:• Pre-school, grade-school; high school not

completed; graduated high school; some university; graduated university, masters degree, PHD.

Customer Profile Psychographic Segmentation

• Can be divided into three different classifications

• Social Class:• Lower lowers, upper lowers, lower middles, lower

uppers, upper uppers.

• Life style:• Active achiever, pleasure seeker, values, beliefs, etc.

• Personality:• Introvert, extrovert, highly determined, authoritarian,

sociable, motivated, etc

The Competition

• It is imperative for you to identify and discuss each major player currently operating within the industry

• Who are they?

• Where are they?

• What are their prices?

• How are your products/services different?

Marketing Plan

• The Marketing Plan consists of three main areas;

• Pricing Strategy

• What price will you charge for the products you plan to sell?

• How did you arrive at these prices?

• Are your prices higher or lower than competitor prices and why?

• Will customers receive discounts for frequent purchases?

• Will you offer coupons?

The Marketing Plan

• Distribution Strategy

• How will you distribute your product?

• Advertising & Promotions

• Which form(s) of promotions will you use• Newspapers

• Tv

• Radio

• Internet?

• How often, and how much will each promotion/advertisement cost?

• What will your advertisements say?