Research the Environment in Your Industry

Business Plan: The Marketing Plan

Research the environment in your industry.

In the team area, the component manager should collaborate with his or her team to ensure everyone is on the same page. In the marketing plan, you will focus on the four Ps (product, price, place, and promotion). Be sure you understand the strategic direction of the firm as you are developing these four Ps by posting in the Team Discussion area and soliciting feedback. Remember that primary research is required for the Marketing Plan. See the lecture for details.

Complete the Marketing Plan.

After working with your teammates, the component manager will develop your Marketing Plan (described in detail in this unit's lecture). Use the rubric for the Written Plan to organize your information and to ensure that you have met the course requirements for this section of your business plan.

Is the idea still viable?

Just as you asked when you finished the environmental analysis, when you completed your marketing research, and when you wrote the marketing plan, you have to ask, "Is this idea still viable?" At first look, it may have been a great idea, but as you develop an understanding of the market, your idea may not be feasible. Are your prices competitive? Does your target market make sense?

Take time to talk with your team in your team meetings and in your Team Discussion area about whether this idea is still a good one that can be sold to investors. If you find that the idea is not viable, work with your team to modify it so that it will be profitable.

Collaborate on your Business Plan by posting to your Team Discussion area.

This collaboration will contribute toward your participation grade in Week 8.

Submit your Marketing Plan.

Team Leaders

You will continue to lead the team discussion and ensure that your team is on schedule. While you are not responsible for the individual component this module requires, you will still need to lead the chats and ensure the consistency of research and plan development.

Component Managers

Coordinate with the Team to write and review this section. Remember, it is YOUR responsibility to make sure the submission conforms to assignment requirements.

“From The Lecture “

The Marketing Plan

Product or Service Concept | Target Market and Segmentation | Value Proposition With Primary Research | Pricing Strategy | Sales and Marketing Strategy | Conclusion

"You can have the best product or service in the world, but if people don't buy—it's worthless. So in reality, it doesn't matter how wonderful your new product or service is. The real question is—will they buy it?" - Noel Peebles

This quote brings us to the marketing plan. Mr. Peebles was correct—great products that people do not purchase are worthless. So what do you do? You utilize marketing skills, which is the purpose of this unit. The marketing plan is the basis in which you define the four Ps: product, price, place, and promotion. To put it simply, the plan that you create will position your products/services so that people will want to purchase them.

In this section, we will cover how to research and develop your marketing plan. In the first part of this lecture, we will cover the specific areas of the marketing plan, which include product or service concept, target market and segmentation, value proposition with primary research, pricing strategy, and sales and marketing strategy.

Product or Service Concept

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Where do you start your business plan? It seems obvious that you would start with the first P—product. Your team has selected a topic that offers a product or a service to a target audience. In the marketing plan of the business section, your product or service concept will be explained here. You will want to go into enough detail to explain how your product or service will appear to customers as well as include your "hook" or specialty that makes your business truly yours. Every new business should have a special "something" that delineates it from all the rest—its hook. Whether it is Wi-Fi in a carwash, free coffee and biscuits in the lobby of a shoe store, or pet-friendly areas in a bar or restaurant, you should explain your hook clearly, concisely, and persuasively. Most lenders and venture capitalists will read this first, and this piece will help them decide if they should read on or throw the plan in the can.

Some things you may want to consider while you are working on this are as follows.

Do you understand your own product or service?

Will others understand it?

Why will people want to use your product or service?

How will people use your product or service?

How is your product or service different from all the rest?

How will you market this product or service?

Target Market and Segmentation

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You need to provide information to your investors about the market in which you plan to operate your new business. You may use some primary research for this as well as secondary research about demographic information in your new business's home. Here, you will provide the following.

Where is the new business going to be located? (Provide explicit details.)

How big is the market? What is the growth rate (historically and projected)?

Why is this market the best place for you to place your new business?

Does your market have unique features or dynamics that you plan to capitalize on?

When you write this section, provide real numbers along with your narrative. Utilize good, solid demographic research and provide the latest information you can find. If you quote Census figures or information from a respected website, include the source information directly in your narrative. The goal is to find information that will support your idea and make your case compelling.

Market segmentation is another area that you should define in your marketing plan. There are four different segment classifications.

Geographic segmentation: Divide your market into specific geographic locations such as nations, cities, counties, regions, neighborhoods, or zip codes.

Demographic segmentation: Identify your prospective customers by characteristics such as age, race, gender, income level, and education.

Psychographic segmentation: Explain the consumer psychology of your target audience. What are the personal and cultural values of your target audience? How do these values impact your product or service?

Behavioral segmentation: How does your target audience make purchase decisions? How does your audience shop?

Remember to define your target market with as much detail as possible. You cannot be all things to all people. Define your target market as narrowly as possible. For example, if you are selling a consumer product, remember that the person who makes the purchase is your target market, and that person might not be the end user. If you are selling toys, your target market is not children, but the parents or care givers of children. Defining a narrow target market is vital to successful and affordable marketing communication. You cannot advertise the same product or service to a 25-year- old and a 65-year-old prospect, even if both are prospective customers. These prospects consume media very differently and do not have access to the same marketing channels for common advertising. Narrow your target market definition and concentrate on your best prospects.

Value Proposition With Primary Research

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The value proposition for your product or service will hinge on your primary research about the characteristics of your target audience and how the audience would make a purchase decision. Your Business Plan must include primary research. As such, it is important that you understand the difference between primary and secondary research.

Primary research is original information you gather that is not presently available from other sources. You conduct primary research to learn about the characteristics of your target audience and to answer specific questions about the viability of your product or service. Primary research results do not exist until you conduct the research. Below are recommended primary research techniques to use for your Business Plan. In the real world, you would require a large sample size for statistically valid primary research. For purposes of the Business Plan, however, you can use a small size that demonstrates your understanding of primary research techniques, analysis, and presentation of results.

Paper or online surveys: Identify a sample of prospective customers that match your target audience. Create survey questions that confirm the demographics of your sample, and then ask respondents questions that verify a need for and intent or willingness to purchase your product or service. There are free online survey tools you can use for this Primary research technique. This is a promising technique to use if you cannot easily contact prospects in person.

Personal interviews: Identify a sample of prospective customers that match your target audience. Speak to that sample in person or by telephone. Use a script that confirms the demographics of your sample, and then ask respondents questions that verify a need for and intent or willingness to purchase your product or service. Make sure you use a script so that all respondents are answering the same questions. This is a promising technique if you have a business-to-business product or service concept.

Focus groups: Identify a small sample of five to eight prospective customers who match your target audience. Assemble the sample in a room and ask probing questions that speak to the need for and intent or willingness to purchase your product or service. In addition to asking specific questions, allow participations to spontaneously discuss whatever they believe is important to your product or service concept. This is a promising technique to use for consumer products.

Behavioral observation: If a competitor offers a similar product or service to yours, visit that competitor and observe the behavior of the customers. For example, if you have a product that would sell in a grocery store, visit a grocery store and watch how shoppers make their purchase decisions. What appears to trigger their action? Can you duplicate that trigger for your business?

Remember that primary research takes time. As such, you begin planning your primary research as soon as your professor approves your Business Plan topic. Once you have your results, remember to include a summary of your findings in the narrative of your Marketing Plan section. Make sure you also provide evidence of your technique (identification of your sample, when and how the research was conducted, individual survey results, interview notes, and so on) in your Appendix. You will lose points on your Business Plan if you do not provide sufficient evidence of your primary research—see the Business Plan Grading Rubric for details.

You can also build a case for the value proposition of your product or service with secondary research. Secondary research is any already-published information that might apply to your target audience and its need for your product or service. The information you gather for your Industry Analysis is secondary research. You can gather valuable secondary research for a number of sources, including

online search engine queries;

industry association websites and publications;

trade or print publications;

newspaper or magazine articles; and

consultation with a librarian.

Note that all published secondary research is not available on the Internet. In fact, the best private industry information available is stored in private databases. You can access these resources from the Student Resource item under Course Home, and you can also take advantage of the DeVry Ask a Librarian feature to help you find valuable information for your Industry Analysis and your Marketing Plan.

Distinctive competitive advantage (your hook): In order for your business to succeed, you need a distinctive competitive advantage that distinguishes your product or service from similar ones offered by other companies. This is sometime called a hook, meaning a unique characteristic that captures the attention of your intended target audience. A hook is not a discount or one-time circumstance to capture a sale. Rather, a hook is a unique characteristic that sets your product or service apart from competitors. Examples might include

a car detailing service that includes a mobile option that comes to your home or office;

a pet store that offers boarding and grooming;

a child care service with pick-up and delivery; and

a dry-cleaning service that offers clothing rental.

A compelling hook cannot guarantee business success, but a potential investor will want to know how your business differs from competitors, and how that difference is a distinctive marketing advantage for your company.

Pricing Strategy

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The pricing strategy for your product or service is vital to the profitability and ultimate success of your business. Remember that the pricing strategy you choose must cover your costs and provide a profit comparable to what other companies in the same industry are able to achieve. Students are sometimes confused that pricing strategy is a technique to increase market share. In other words, there is a common but incorrect belief that low pricing increases market share. This is never true for a new business. A new business requires the same profit margin as an existing business in order to survive. That is because a new business realistically has the same operation expenses as a mature business (they may even be higher). When Walmart sells a product at a lower price than one of its competitors, Walmart is not operating at a loss to increase traffic or market share. Rather, Walmart is able to sell at a lower price because the cost of its internal operations is more efficient than its competitors. Walmart earns the same profit margin as its competitors even when selling at a lower price. A new business like the one you are creating for your Business Plan cannot play a low price game against established competitors.

A better pricing strategy for a new business is competitive pricing. In this instance, you charge about the same price as your primary competitors for your product or service. Here is a very important caveat: If your product or service has distinctive or premium attributes compared to your competition, you should charge a higher price. Students sometime imagine that a superior product or service at a lower price will build market share. Once again, this approach does not consider your cost and required profits. If you have a superior product or service, charge a higher price than competitors and make sure prospect customers understand your unique attributes. Customers will pay always pay a higher price for a superior products and services.