Chapter 6: The Marketing Plan - PDF

Chapter 6 THE MARKETING PLAN © BE AN ENTREPRENEUR 2021 6 THE MARKETING PLAN Market Analysis The Marketing Plan © BE AN ENTREPRENEUR 2021  Chapter 6 overview The aim of these sections is to give a strong impression to the investor that the opportunity...

Chapter 6 THE MARKETING PLAN © BE AN ENTREPRENEUR 2021 6 THE MARKETING PLAN Market Analysis The Marketing Plan © BE AN ENTREPRENEUR 2021  Chapter 6 overview The aim of these sections is to give a strong impression to the investor that the opportunity is compelling and that you and your team are the best people to run it. We start with the marketing plan in Chapter 6. You might want to take a moment to review your notes on your customers and competitors. Your insights on your customers will guide the marketing effort.  Coverage of the Chapter The Market Analysis The Marketing Plan Industry Product Competitors Price Customers Place Promotion * Adjust to reality  Learning Objectives Define marketing plan and market analysis Discuss the goals of market analysis Distinguish product features from product benefits Illustrate ways by which a unique selling point may be achieved State the goal of pricing. Suggest appropriate ways to price a product Suggest ways to distribute, support, advertise and promote a product  Story from Real Life Mike was applying for a janitorial job in a multi- national company in the suburbs (outside the big city). He’s a family man with three children in high school. He wasn’t hired for the job because he lacked some qualifications. Frustrated, he walked down the street and bumped into a pile of beautiful red tomatoes in the middle the street. He wondered why the tomato vendors are selling these tomatoes in the middle of the busy street where people may accidentally bump them all.  Story from Real Life In less than an hour, he sold all his tomatoes and made an extra $10. The next day, he did the same thing and again doubled his money. He told his wife about it. The couple decided to repeat the experience until they were totally in the business of tomato sales. They were able to save enough money to purchase a truck to carry all the tomatoes to other parts of town. They were able to send their children to college.  Story from Real Life Now their children, having finished accounting and business courses, help out in their tomato enterprise. Moral of the story? A good dose of ingenuity and drive gets you entrepreneurial success. It saves you from a stale job.  Market Analysis Marketing research: An activity that begins by identifying an unmet consumer need and a way for your product or service to meet the need. Marketing research includes qualitative research (feelings) and quantitative research (numbers).  Market Analysis Market Analysis: A careful study of the customers and competitors of a business. It identifies the target market, the competitors and the way the market is segmented.  Market Analysis The objectives of the market analysis section of a business plan are to show to investors that: you know your market the market is large enough to build a sustainable business  Market Analysis Macro PESTEL Analysis analysis Demographics and Segmentation Micro Target Market Market Need Competition Analysis Barriers to Entry Regulation  Market Analysis A PESTEL analysis is a simple tool that allows you to identify big external trends and drivers that could have a positive or negative impact on your business. (PESTEL stands for political, economic, social, technological, environmental and legal: the six areas that the analysis covers.)  Market Analysis PESTEL analysis Political Economic Social Technologi Environment Legal cal al Governme Funding Lifestyle or Emerging Weather Regulatio nt policy opportuniti cultural technologie Climate n Changes to es factors s change Law governmen Economic affecting Data and Pollution Standard t environme your information Waste and s nt (interest customers recycling rates, or consumer beneficiarie spending) s Public attitudes  Market Analysis Marketing analysis includes: Demographics and Segmentation Target Market Market Need Competition Barriers to Entry Regulation  Market Analysis Demographics and Segmentation When assessing the size of the market, your approach will depend on the type of business you are selling to investors. If your business plan is for a small shop or a restaurant then you need to take a local approach and try to assess the market around your shop. If you are writing a business plan for a restaurant chain then you need to assess the market a national level.  Market Analysis Target Market The target market is the type of customers you target within the market. For example, if you are selling jewellery you can either be a generalist or decide to focus on the high end or the lower end of the market. This section is relevant when your market has clear segments with different drivers of demand. In my example of jewels, value for money would be one of the drivers of the lower end market whereas exclusivity and prestige would drive the high end.  Market Analysis Market Need This section is very important as it is where you show your potential investor that you have an intimate knowledge of your market. You know why they buy! To do so you need also to highlight in this section some of the drivers that your competition has not been focussing on.  Market Analysis Competition The aim of this section is to give a fair view of who you are competing against. You need to explain your competitors' positioning and describe their strengths and weaknesses. You should write this part in parallel with the Competitive Edge part of the Strategy section. The idea here is to analyse your competitor's angle to the market in order to find a weakness that your company will be able to use in its own market positioning. 123  Market Analysis Barriers to Entry This section is all about answering two questions from your investors: what prevents someone from opening a shop in front of yours and take 50% of your business? having answered the previous question what makes you think you will be successful in trying to enter this market? (start-up only)  Market Analysis Regulation If regulation is a barrier at entry in your sector then I would advise you to merge this section with the previous one. Otherwise, this section should be just a tick the box exercise where you explain the main regulations applicable to your business and which steps you are going to take to remain compliant.  Marketing Plan Marketing Plan: A roadmap or plan of action that is going to get your customers to buy your product or service.  The Four P’s Product. What is your product or service, and how will it stand out against the competition? Price. How to determine the price of the product. Place. The place or location of your product is key to making sure that potential shoppers walk into your enterprise. Promotion. How will you get your product or service known to the outside world  Points to Remember This chapter discussed the marketing section of the business plan. It has two parts: market analysis and the marketing plan itself. Market analysis looked into the industry, the competitor and the customer or target market. The goals of the market analysis are to identify gaps and unmet needs that the business can exploit and to demonstrate a large and growing demand to support the business.  Points to Remember The marketing plan followed the 4 P’s framework of product, price, place and promotion. Your customer and the unique selling point of your product are the drivers that guide decisions in the marketing plan. Product features describe the physical traits of the product, what it does and how it works. A product benefit is a customer need that is satisfied by your product  Points to Remember Unique selling points state what benefit sets your product apart from all the rest. Why is your product unique, distinct, or better than what is available? To find out the unique selling point, answer these questions: What needs are you meeting better than anyone else? What benefit do you deliver better than competition? What needs or customers do you serve that competition is not?  Points to Remember To find out the unique selling point, answer these questions: What needs are you meeting better than anyone else? What benefit do you deliver better than competition? What needs or customers do you serve that competition is not?  Points to Remember How to achieve a unique Use of a new selling point? Look for technology or process the following: First in the market Ease of use/ easy to Savings compared to use existing products Preferred location/ Glamour, fashion, accessible coolness Luxury Continued 🡪  Points to Remember 🡪 Continued: “How to Friendly to the achieve a unique selling environment point? “ Healthy, organic, Best customer service natural Fastest to deliver Socially-responsible, Trouble-free product profits go to charity  Points to Remember The goal of pricing is to set the price and terms for your product such that the highest possible profit is achieved. The price should: cover all costs consider what customers can afford provide the business a decent return be related to product positioning; that is, how you want your product to be known to your target market  Points to Remember Distribution network: explains where the customer can get your product, and how it is going to get there. Customer service: is about what to do, after the customer has made the decision to buy. Advertising seeks to inform or persuade the market to support or buy a product.  Points to Remember Most other activities that persuade the customer to buy the product but do not fall under advertising, may be called “promotions.“ These can include handing out free samples, coupons, product displays, and organizing demonstrations how to use your product.  Review Questions Do your Marketing Plan https://www.addthis.com/academy/the-ultimate-marketing-plan- template-7-useful-examples/