To this point, the Business Plan has been a review of your company, its management team and where it is going. You obviously have a feeling that there is a market for the product or service you propose to supply.
Lenders will not accept feelings as proof of a market potential....
The lender will be interested in who your new market is, where it is, why they buy your product/service, who is your competition, whether it is a growth or static market and what percentage of the market you will shoot for in your first, second, and third year of operation. The estimates of sales you create from this analysis will form the backbone of your proforma statements as well as be a justification for receiving a loan.
You also need to consider the marketing mix factors: product, price, promotion and place.
The pages that follow are designed to help you work out a market analysis. Your objective is to develop the marketing portion of the business plan.
MARKET RESEARCH is critical and you must do research on your product/service, target customers, and industry. Market segmentation requires that the business appeal to a well defined consumer group with one marketing plan or approach. The following pages indicate possible market segments for both the consumer and business markets. Then complete the appropriate sheet for your customer to define who is the target market for your business.
THE MARKETING CONCEPT emphasizes knowing your customers and their wants and then delivering that to them to make profits. The marketing concept consists of 1) knowing what customers want, 2) designing a business to deliver those wants, 3) in a way that insures long term profits. Customer satisfaction becomes the first order of business. Customer satisfaction becomes the ultimate basis for all management decisions.
From the perspective of the marketing concept there is only one sound, logical reason to start and a operate a business. That reason is to SATISFY A MARKET NEED. If the business is to have any chance of succeeding, it must be able to satisfy customer needs and benefits beyond competitors.
THE MARKETING MIX STRATEGY includes examining the product, promotion, place, and price variables to reach the target customer with the right product, at the right place, at the right price through the right promotion. The following pages will lead you through the Marketing Mix as it applies to your product or service.