8/8/2019 Entre Business Plan
1/43
1Business Plan
The Business PlanChapter 7
8/8/2019 Entre Business Plan
2/43
2Business Plan
Business Plan
A business plan is the descriptionof the future direction of thebusiness.
8/8/2019 Entre Business Plan
3/43
3Business Plan
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?
8/8/2019 Entre Business Plan
4/43
4Business Plan
Benefits of a Business Plan
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.
8/8/2019 Entre Business Plan
5/43
5Business Plan
Benefits of a Business Plan
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.
8/8/2019 Entre Business Plan
6/43
6Business Plan
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.
Benefits of a Business Plan
8/8/2019 Entre Business Plan
7/43
7Business Plan
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
8/8/2019 Entre Business Plan
8/43
8Business Plan
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
Components of a Business Plan
8/8/2019 Entre Business Plan
9/43
9Business Plan
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
Components of a Business Plan
8/8/2019 Entre Business Plan
10/43
10Business Plan
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
Components of a Business Plan
8/8/2019 Entre Business Plan
11/43
11Business Plan
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
Components of a Business Plan
8/8/2019 Entre Business Plan
12/43
12Business Plan
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.
8/8/2019 Entre Business Plan
13/43
13Business Plan
The Four PsThe Four Ps
Marketing
Mix
Product
Price Promotion
Place(Distribution)
8/8/2019 Entre Business Plan
14/43
14Business Plan
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.
8/8/2019 Entre Business Plan
15/43
15Business Plan
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
8/8/2019 Entre Business Plan
16/43
16Business Plan
Market Segmentation
8/8/2019 Entre Business Plan
17/43
17Business Plan
Geographic Segmentation
International
National
Regional/City
8/8/2019 Entre Business Plan
18/43
18Business Plan
Dividing the market into geographic
units:
States
Regions
Cities
Countries
Geographic Segmentation
8/8/2019 Entre Business Plan
19/43
19Business Plan
Demographic Segmentation
Age
Gender
Family size
Income
Occupation
Education
Religion
Race
Dividing the market into groups based ondemographic variables:
8/8/2019 Entre Business Plan
20/43
20Business Plan
Psychographic SegmentationDividing buyers into groups based on:
Social class
Lifestyle
Personality
8/8/2019 Entre Business Plan
21/43
21Business Plan
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
8/8/2019 Entre Business Plan
22/43
22Business Plan
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.
8/8/2019 Entre Business Plan
23/43
23Business Plan
Target Marketing Strategy
CompanyMarketing
MixMarket
Market Targeting
Undifferentiated/Mass Marketing
8/8/2019 Entre Business Plan
24/43
24Business Plan
Undifferentiated/Mass Marketing
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.
8/8/2019 Entre Business Plan
25/43
25Business Plan
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.
Undifferentiated/Mass Marketing
8/8/2019 Entre Business Plan
26/43
26Business Plan
Ford Model T
8/8/2019 Entre Business Plan
27/43
27Business Plan
Differentiated/Segmented Marketing
Target Market Strategy
Segment 1
Segment 2
Segment 3
Company
Marketing Mix 1
Company
Marketing Mix 2
Company
Marketing Mix 3
8/8/2019 Entre Business Plan
28/43
28Business Plan
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
8/8/2019 Entre Business Plan
29/43
29Business Plan
Market Coverage Strategy
Concentrated/Niche Marketing
Segment 1
Segment 2
Segment 3
CompanyMarketing
Mix
8/8/2019 Entre Business Plan
30/43
30Business Plan
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
8/8/2019 Entre Business Plan
31/43
31Business Plan
Positioning
ProductsProducts PositionPosition - the way theproduct is defined by consumerson important attributes - the
place the product occupies inconsumers minds relative tocompeting products.
8/8/2019 Entre Business Plan
32/43
32Business Plan
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.
8/8/2019 Entre Business Plan
33/43
33Business Plan
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.
8/8/2019 Entre Business Plan
34/43
34Business Plan
Factors to Consider when Setting
PricesInternal Factors
Pricing Decisions
External Factors
Pricing
8/8/2019 Entre Business Plan
35/43
35Business Plan
Internal Factors Affecting
Pricing Decisions
MarketingObjectives
Marketing-MixStrategy
Costs
OrganizationalConsiderations
8/8/2019 Entre Business Plan
36/43
36Business Plan
External Factors Affecting
PricingD
ecisionsNature of the Market &Demand
Competition
Economy
Government
8/8/2019 Entre Business Plan
37/43
37Business Plan
Promotion
Sales Promotion Personal Selling
Public Relations
Advertising
8/8/2019 Entre Business Plan
38/43
38Business Plan
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.
8/8/2019 Entre Business Plan
39/43
39Business Plan
Advertising
Newspapers Television Direct mail Radio Magazines Newsletters
Brochures Telephone Internet
Major Media Types
8/8/2019 Entre Business Plan
40/43
40Business Plan
Personal Selling
Involves two-way,personal communicationbetween salespeople andindividual customerswhether:
Face to face
By telephone
Through videoconferencing
8/8/2019 Entre Business Plan
41/43
41Business Plan
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
8/8/2019 Entre Business Plan
42/43
42Business Plan
Sales Promotion
It consists of short-termincentives to encouragethe sales of a productsuch as:
Samples
Coupons
Prices off Prizes
Free trials
8/8/2019 Entre Business Plan
43/43
43Business Plan
Distribution
Distribution Channels