Posted: April 4th, 2023

Complete the following sections (5.1-5.4) based on the business plan. 5. Marketi

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Complete the following sections (5.1-5.4) based on the business plan.
5. Marketing Plan
– A formal marketing plan can be comprised of the following four major sections.
– Following the descriiptions of the three major sections of a marketing plan, study the list of key questions that must be answered within a marketing plan in a business plan.
5.1. Market Analysis
– The market analysis contains customer profiles, constructed through primary and secondary research, for each market targeted. It also contains detailed information on the major product benefits you will deliver to the markets targeted.
o Describe the methodology used and the relevant results from the primary market research you completed. If you did not do any primary research, justify why this approach was acceptable and indicate what research will be done and by when and by whom.
o Include a complete descriiption of the secondary research conducted and the conclusions reached.
5.2. Competitive Analysis
– The competition section fully describes the nature of your competitors. This section might be part of your market analysis if it makes more sense for you to include it there.
o describe all your direct competitors
o describe all your indirect competitors
– You should consider including a positioning (or perceptual) map, similar to that shown in Figure 6, to show where your product will be positioned relative to competitors’ products.

Figure 6. Positioning Map
– Another tool you can use is a competitor analysis like that showing in Table 6 in which you can develop a set of factors to rate on a scale to establish a competitive score against which to compare your company to your competitors.
Company Factor 1 Factor 2 Factor 3 Factor 4 Competitive Score

Table 6. Competitor Analysis
5.3. Organizational Analysis
– An organizational analysis primarily uses the firm-level analysis (they are essentially the same thing), which is one of the four levels of analysis (societal-level, industry-level, market-level, and firm-level) used to help make decisions and develop strategies. This section can use the firm-level analysis to provide needed context in preparation for presenting the marketing strategy. While the societal-level and industry-level analyses are often placed early in the business plan to provide the needed big-picture context early, an organizational plan is often placed within the marketing plan part (or sometimes in the operations plan section).
– A common approach to analyzing a new venture is to apply a SWOT analysis, but always ensure this analysis results in more than a simple list of internal strengths and weaknesses and external opportunities and threats. A SWOT analysis should always prove to the reader that there are organizational strategies in place to address each of the weaknesses and threats identified and to leverage each of the strengths and opportunities identified. A TOWS Matrix is a tool available to help with this. It evaluates each of the identified threats along with each of the weaknesses and then each of the strengths. It does the same with each of the identified opportunities. In this way, strategies are developed by considering pairs of factors.
5.4. Marketing Strategy
– The marketing strategy section is very important as this covers all aspects of the marketing mix including the promotional decisions you have made, product decisions, distribution decisions related to how you will deliver your product to the markets targeted, and pricing decisions.
5.4.1. Product/Service Strategy
– This section describes the strategic choices you are making relevant to your product or service. These strategies might describe elements like your planned quality levels relative to competing products and your plans for further product development. Refer to the list of key questions that must be answered within a marketing plan that starts on page 23 for insights into what your product strategies should address.
5.4.2. Pricing Strategy
– This section describes the strategic choices you are making relevant to the prices you will charge for your product or service. These strategies should usually be built upon the normal pricing strategies companies use like cost-plus pricing, penetration pricing, premium pricing, skimming, or any of a number of other pricing strategies you should research and consider for your business. Refer to the list of key questions that must be answered within a marketing plan that starts on page 23 for insights into what your pricing strategies should address.
5.4.3. Distribution Strategy
– This section describes the strategic choices you are making relevant to how you will distribute your product or service. You should consider the normal distribution strategies companies use like catalogue sales, retail store sales, online distribution, or any of a number of other distribution strategies you should consider using. Refer to the list of key questions that must be answered within a marketing plan that starts on page 23 for insights into what your distribution strategies should address.
– A mistake that some service-based business plan writers make is to simply state that customers will go their location to purchase the product. Use this section to describe the unique shopping experiences the customers will have or other reasons why they should want to go to this location.
5.4.4. Promotion Strategy
– This section describes the strategic choices you are making relevant to how you will promote your product or service. Refer to the list of key questions that must be answered within a marketing plan that starts on page 23 for insights into what your promotions strategies should address.
Some of the key questions that must be answered within marketing plans follow.
– Who are your customers going to be?
o Define your target market in terms of identifiable entities sharing common characteristics. For example, it is not meaningful to indicate you are targeting Canadian universities. It is, however, useful to define your target market as Canadian university students between the ages of 18 and 25 … or as information technology managers at Canadian universities … or as student leaders at Canadian universities.
o Your targeted customers should be able to make or significantly influence buying decisions.
o Make sure your defined target market aligns completely with your marketing mix (including product/service descriiption, distribution channels, promotional methods, and pricing). For example, if the target market is defined as Canadian university students between the ages of 18 and 25, the product component of the marketing mix should clearly be something that appeals to this target market.
o Provide a strong justification for targeting potential customers. It is usually a very weak approach to target customers on the basis of their demographic characteristics. Your business may be better off targeting potential customers based on psychographic characteristics.
o There are important implications associated with where you will get your customers, so you must make it clear that you understand from where they will come. Remember that there are only two ways in which you can attract your customers:
You can steal them from other businesses they now patronize, or
You can create new customers who do not now purchase the product you want to sell. To do this, you need to convince them to re-allocate some of their money from something else they had planned to buy to your service or product instead.
– Prove that you understand how your targeted customers make their buying decisions. Tell the reader how you plan to influence them to buy from you.
– What is the optimum marketing mix, and why is this one better than the alternatives?
o You will need to access, or conduct research to find out how your targeted customers make their buying decisions. Based on what you discover, you will need to figure out the optimum mix of pricing, distribution, promotions, and product decisions to best appeal to how your targeted customers make their decisions.
– What is your competitive advantage? What distinguishes your business from that of your competitors in a way that will ensure your sales forecasts will be met? What is your venture’s value proposition?
o You must clearly communicate the answers to these questions in your business plan in order to attract the needed support for your business. One caution is that it may sound appealing to claim you will provide a superior service as compared to the existing competitors, but the only meaningful judge of your success in this regard will be customers. Although it is possible some of your competitors might be complacent in their current way of doing things, it is very unlikely that all your competitors provide an inferior service to that which you will be able to provide.
– As a new entrant into the market, must you (a) attract your customers away from the suppliers they currently buy from, or will you be (b) creating new customers for your product or service? If you are attracting customers away from competitors, how will these rivals respond to the threat you pose to them? If you intend to create new customers, how will you convince them to reallocate their dollars toward your product or service?
o Prove that you have anticipated the responses competitors will have to your entrance into the market, especially if your success depends on these businesses losing customers to you.
o If your entry into the market will not be a threat to direct competitors, it is likely you must convince potential customers to spend their money with you rather than on what they had previously earmarked those dollars toward. Explain in your business plan how you will do this.
– What is your product or service? Why will this particular product or service appeal to your targeted customers better than the alternatives available to them?
o If your product or service is standardized, you will need to compete on the basis of something else – like a more appealing price, having a superior location, better branding, or improved service.
o If you can differentiate your product or service you might be able to compete on the basis of better quality, more features, appealing style, or something else.
– In what ways will you communicate with your targeted customers? When will you communicate with them?
– What specific messages do you plan to convey to them? How much will this promotions plan cost?
o Carefully consider which promotional methods you will use. While using a medium like television may initially sound appealing, it is very expensive unless your ad runs during the non-prime times. If you think this type of medium might work for you, do a serious cost-benefit analysis to be sure.
o You will likely develop your promotional plan around measures like the following. Remember to include the costs for all of the measures you use in your promotional plan in your business plan.
newspaper ads
promotional pamphlets
business cards
advertising in telephone directories
sponsorships (like purchasing uniforms for a little league soccer team)
personalized pens and other promotional client give-away items
donating items to charity auctions
printing and mailing client Christmas cards
doing the many things businesses end up doing on-the-fly
join the local chamber of commerce
join relevant trade organizations through which to establish important business connections
setting up and staffing booths at trade fairs to help launch the business
o Add some discretionary money to your promotional budget if you are concerned that some important promotional opportunities might arise during the year.
o You should consider mapping out your promotional expenditures in a schedule like that shown in Table 7. Make sure that this schedule links directly with your projected cash flow statement and from there into your projected income statements.
o Be careful to avoid killer phrases which only serve to make a reader believe you have not done your homework. Some of these are common in the marketing sections of business plans. For example, avoid including phrases like these “there is no target market” and “any money left over will be allocated to a marketing budget”.

Table 7. Promotional Plan Years 1-2

– What are your sales forecasts? Why are these realistic?
– Your sales forecasts should be done on at least a monthly basis and linked directly with your projected cash flow statement. The projections must be accompanied by explanations indicating upon what assumptions and facts they were based. This is required to establish their credibility with readers of your business plan.
– Many readers will initially assume your planned time frames are too long, your revenues are overstated, and you have underestimated your expenses. Well crafted explanations for all of these numbers will help establish credibility.
– See Table 8 for an example of a month-by-month summary of projected sales per product line.
– Table 9 is an example of a year-by-year summary of projected sales.
– If an assumption was made that some sales will be made on credit, you can use a visual like Error! Reference source not found. to summarize the projected cash and accounts receivable collections from sales on a monthly basis by product line. Error! Reference source not found. shows a year-by-year summary of these collections. This is an important table in that this data feeds into the projected cash flow statement. The previous tables showing the projected sales cannot be used to calculate cash flow, but are needed to determine revenue for the projected income statements.

Table 8. Projected xxx Years 1-3

Table 9. Projected xxx Summary for Years 1-5

– What are your distribution strategies? What makes these strategies better than the alternatives?
o If you plan to use e-commerce, you should include all the costs associated with maintaining a website and accepting payments over the Internet.
– What are your pricing strategies? What makes these strategies better than the alternatives?
o If you intend to accept payment by credit card (which is probably a necessity for most companies), you should be aware of the fee you are charged as a percentage of the value of each transaction. If you don’t account for this you risk overstating your actual revenues by perhaps one percent or more.
– Be very careful how you phrase your statements.
o If you make a statement of fact, you must back it up with properly referenced supporting evidence.
o If you indicate a claim is based on your own assumptions, you must back this up with a descriiption as to how you came to the conclusion.
o Unless you are stating something that is clearly common knowledge (but then you need to determine whether you need to make the statement), never make a statement without backing it up.
– What primary and secondary research have you done? Is it obvious to readers that you did research (indicated by properly referencing all of your sources). This research normally falls under the four levels of analysis, and you almost always must do analysis at all levels (see Error! Reference source not found.).

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