Entre Business Plan

8/8/2019 Entre Business Plan

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The Business PlanChapter 7


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Business Plan

A business plan is the descriptionof the future direction of thebusiness.


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Benefits of a Business Plan

Starting a business without a business planis like walking through the dark without aflashlight.

You can probably go a long way using just

your senses. But operating in such amanner leaves you wide open to the riskthat something will get in your way (like acompetitor) and you probably won't see ituntil it is too late.

And just imagine all of the opportunitiesthat are just waiting to be grasped butwithout a flashlight, a business plan, howwill you see and take advantage of them?


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The benefits of having a business planinclude:

Helping you to clarify your vision anddeciding whether or not to forge ahead withthe idea.

Determining if your product and/or servicehas a sufficient market to support it and

whether or not it will be profitable. Providing an estimate of your start-up costs

and how much you'll need to invest.


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Convincing investors and lenders

to fund your business.

Defining your target market (whoyour customers are or will be)

and how to best reach them

through strategic marketingactions or expanding market

coverage or reach.


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Establishing or reevaluating yourcompetitive position.

Defining corporate objectives and

programs to achieve those objectives.

Helping your business make money fromthe start by developing effective

operational strategies. Understanding the risks involved and

anticipating potential problems.



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Components of a Business Plan

1. Executive Summary It should be concise; a maximum of two

pages, and should summarize allrelevant points of the business venture.

2. Company Vision and Mission

3. Company Ownership

Major Forms of Business Ownership

Sole Proprietorship Partnership

Corporation


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4. Company History

This section should describe when andwhy the company was formed and how it

has evolved over time.5. Company Profile

Stage of Growth

Company Goals

Keys to Success

Company Structure (Organization Chart)

Company Location



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6. Industry Analysis

Industry Background and Overview

Significant Trends

Growth Rate Outlook for the Future

7. Company Products and Services Product or Service Description

Future Products and Services



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8. Marketing Strategy Market Segmentation

Target Market Strategy Positioning Strategy Pricing Strategy

Promotion Strategy Distribution Strategy

9. Sales Strategy Sales Forecast

10. Competitor Analysis Existing Competitors Potential Competitors



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11. Management Team

Key managers and employees

Education, experience and skills

Duties and responsibilities12. Financial Forecasts

Projected Income Statement

Projected Cash Flow

Projected Balance Sheet

Break-Even Analysis

Business Ratios



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Marketing Strategy

MarketingA total system of business activitiesdesigned to plan, price, promote, and

distribute need-satisfying products totarget markets to achieve organizationalobjectives.

MarketAll actual and potential buyers of a productor service.


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The Four PsThe Four Ps

Marketing

Mix

Product

Price Promotion

Place(Distribution)


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Market Segmentation,

Targeting & Positioning Segmentation: Grouping consumers

by some criteria.

Targeting: Choosing which group(s)to sell to.

Positioning: Creating a clear,

distinctive, and desirable position inthe target consumers mind, relativeto competing products.


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Steps in Market Segmentation,

Targeting, & PositioningMarket Segmentation

1. Identify bases forsegmenting the market

2. Develop segment profiles

Market Targeting3. Develop measure of

segment attractiveness4. Select target segments

Market Positioning5. Develop positioning for

target segments6. Develop a marketing

mix for each segment


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Market Segmentation


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Geographic Segmentation

International

National

Regional/City


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Dividing the market into geographic

units:

States

Regions

Cities

Countries

Geographic Segmentation


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Demographic Segmentation

Age

Gender

Family size

Income

Occupation

Education

Religion

Race

Dividing the market into groups based ondemographic variables:


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Psychographic SegmentationDividing buyers into groups based on:

Social class

Lifestyle

Personality


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Behavioral Segmentation Dividing the market into groups based on

variables such as:

Occasions

Benefits User status

Usage rate

Loyalty status

Readiness stage

Attitude toward product


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Requirements for Effective

Segmentation Size, purchasing power, profilesof segments can be measured.

Segments can be effectivelyreached and served.

Measurable

Accessible

Substantial

Actionable

Effective programs can bedesigned to attract and servethe segments.

Segments are large or

profitable enough to serve.


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Target Marketing Strategy

CompanyMarketing

MixMarket

Market Targeting

Undifferentiated/Mass Marketing


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A market-coverage strategy in whicha firm decides to ignore marketsegment differences and goes after

the whole market with one offer. The focus is on what is common in

the needs of consumers rather thanon what is different.

The company designs a product anda marketing program that appeals tolargest number of buyers.


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Two of the most widely recognizedexamples are Ford and Coca-Cola.

Henry Ford applied the concept in the

automobile industry. His Model T wasmarketed as a "universal" carone that

would meet the needs of all buyers.

Candler applied the concept in the soft

drink industry. Like Ford, he alsoviewed his product as being the only

one that consumers needed.



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Ford Model T


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Differentiated/Segmented Marketing

Target Market Strategy

Segment 1

Segment 2

Segment 3

Company

Marketing Mix 1

Company

Marketing Mix 2

Company

Marketing Mix 3


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A market - coverage strategy inwhich a firm decides to targetseveral market segments and

designs separate offers for each.

Example: Nike offers athletic shoes

for different sports such as running,aeobics, cycling, baseball, tennis etc.

Differentiated/Segmented Marketing


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Market Coverage Strategy

Concentrated/Niche Marketing

Segment 1

Segment 2

Segment 3

CompanyMarketing

Mix


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A market-coverage strategy in

which a firm goes after a large

share of one or a few smallersegments or niches.

Example:

Rolls Royce focuses on luxuryautomobile niche.

Concentrated/Niche Marketing


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Positioning

ProductsProducts PositionPosition - the way theproduct is defined by consumerson important attributes - the

place the product occupies inconsumers minds relative tocompeting products.


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Positioning Strategies

Positioning by product attributes.

Positioning by benefits.

Positioning for user category.

Positioning for usage occasion.

Positioning against another competitor.

Positioning against another product

class.


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Choosing & Implementing

a Positioning Strategy

Step 1. Identifying a set of possiblecompetitive advantages upon which tobuild a position.

Step 2. Selecting the Right CompetitiveAdvantage: Unique Selling Proposition(USP).

Step 3. Effectively communicating anddelivering the chosen position to acarefully selected target market.


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Factors to Consider when Setting

PricesInternal Factors

Pricing Decisions

External Factors

Pricing


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Internal Factors Affecting

Pricing Decisions

MarketingObjectives

Marketing-MixStrategy

Costs

OrganizationalConsiderations


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External Factors Affecting

PricingD

ecisionsNature of the Market &Demand

Competition

Economy

Government


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Promotion

Sales Promotion Personal Selling

Public Relations

Advertising


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Advertising

Types of Advertising Informative Advertising: It is

used to inform consumers about a

new product or feature. Persuasive Advertising: It is usedas competition increases.

Reminder Advertising: It is used

for mature products since it keepsconsumers thinking about theproduct.


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Advertising

Newspapers Television Direct mail Radio Magazines Newsletters

Brochures Telephone Internet

Major Media Types


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Personal Selling

Involves two-way,personal communicationbetween salespeople andindividual customerswhether:

Face to face

By telephone

Through videoconferencing


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Public Relations Involves building good relations with the

companys various publics by obtainingfavorable publicity and building up a goodcorporate image.

Publics Financial

Community

Suppliers Customers

Government

Media


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Sales Promotion

It consists of short-termincentives to encouragethe sales of a productsuch as:

Samples

Coupons

Prices off Prizes

Free trials


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Distribution

Distribution Channels

Documents

Entre Business Plan