CVELP: Assignments: Marketing

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The Marketing section of the business plan shows how you will identify your prospective customers, make them aware of your products/services, and convince them of the values/benefits of your products/services. Once you have read the Course Materials for this Chapter, your assignment is to write the Marketing section of your business plan using the following outline:

TARGET MARKET
Provide a description of your target market(s). Make sure to include the any of factors shown below that apply:

When your target market is comprised of people:

• Age - Usually a range or a general category such as “18 to 25 years old” or “Senior citizens.”

• Income - This can be either total annual income or an estimated disposable income. For example, “earning over $25,000 per year” or “has a monthly disposable income of at least $500.”

• Gender - Males or females.

• Geography - This is particularly applicable if you have a retail location or provide a service. This can be stated in terms of a radius or a geographical boundary like “within a ten-mile radius of our location” or “between Modesto and Bakersfield, California.”

These factors are usually further refined by including issues such as:

• Social - Marital status, parental status, religion, educational level, etc.

• Cultural - Family, ethnicity, activities, hobbies, interests, etc.

• Physical - Medical conditions, physical ability/conditions, health issues, etc.

For example:
The overall target market of WOW Fashions are women between the ages of 18 and 60 who live within Fairfield County and have a monthly disposable income of at least $200. Of this group, we will specialize in providing clothing to women who love fluorescent colors and wear larger-sizes (ranging from 12 to 22).

If your target market is comprised of businesses, the four basic factors commonly used are:

• Business Type -Retail, service, manufacturing, construction, non-profit, or government.

• Products/Services - Especially if your product or service is directly related to your product or service. For example, if you make a special part for a manufacturer or provide consulting services for non-profit organizations.

• Number of Employees - Stated in a range or value such as “between 10 and 50 employees” or “less than ten employees.”

• Economic Issues -If economic factors such as a boom or downturn are currently affecting your potential customers. For example, if businesses within your target market are cutting costs by eliminating their graphic design department, your graphic design business can fill the void.

For example:
The target market of Jones Custom Welding and Fabrication are local manufacturers (within fifty miles of our shop) who, because of a lack of manpower or a lack of skills, are unable to complete a project that involves custom welding, soldering, bending, shaping, and/or powder coating of a base metal.

These factors (both for people and for businesses) are usually enough to identify and describe the target market for most businesses. However, make sure to include any other factors that you feel are applicable to your particular business. Also make sure that if you are targeting individuals and businesses, you state the target market for both.

PRODUCT POSITION 
Briefly state the primary products/services your business provides (feel free to repeat what you have already written in prior sections). Make sure that you mention what makes your products/services different from those of your competitors (remember your competitive analysis table from the last chapter – use the information you identified there). Mention any special features and benefits so that you clearly explain why someone would chose you over your competitors. For example:

Rick’s Picks offers high end, guitar picks to individual musicians, bands, band managers, record labels, promotional agents, radio stations and collectors throughout the United States. On the surface, guitar picks may not seem like an exciting business. But, with our unique spin on the product, the excitement throughout the music and collectibles industries is growing! Rick Jones, founder of Rick’s Picks has developed an entirely new process of pressing and printing guitar picks with features not available from any other guitar pick manufacturer. These include:

• Unlimited Shape Design

• Unlimited Colors and Patterns

• Photograph Imprinting

• Logo/Phrase Imprinting

• Holographic Imaging

. . .or any combination of these! The process to produce our picks is also less costly than traditional methods. Therefore, we can offer an amazing and unlimited range of custom pick designs at a price that is competitive with the standard picks that are currently on the market.

PRICE
Describe how you determined the pricing for your products/services. Are they based on one or more of the following?

• Your costs to manufacture/provide the product/service

• What your competitors charge

• Standard industry mark-ups/rates

• What the market will bear

Then, state where your price fits in the overall pricing hierarchy (lower end, middle or high end). For example:

The current rate for our web design services is $50.00 per hour. This is based on the current rates charged by our competitors and then determining the exact midpoint. By starting out with rates that are above the low-end of our competition, yet lower than those charged by established businesses, we will be able to enter this field with a better perceived value (i.e.: not cheap) and can still be competitive with the big guys.

LOCATION 
State exactly where you plan to establish your business or where it is located if it is an existing business. Is it a home-based business? Are you going to lease a site or own it? If you are going to lease, note the basic terms of the lease (length, square feet, maintenance, janitorial, etc.) and include a copy of your lease in the supporting documents section. Explain how the location is appropriate for your particular business and, if it applies to your situation, how the location will help promote sales and/or awareness of your business (this is critical for a retail business). Describe any special features of the location that could maximize your profit potential.

PROMOTION
Explain your promotional methods by describing each of the promotional methods you will use, why you will use them and their estimated cost. Typical promotional methods include:

• Print advertising - In newspapers, yellow pages, periodicals, magazines, and specialty publications, etc.

• Media advertising - Through radio stations, television stations, web sites, billboards, etc.

• Direct efforts – Such as mailers, telemarketing, cold-calls, person-to-person contact, etc.

• Events – By participating in and/or sponsoring events, trade shows, fairs, business functions, fund raisers, etc.

• Word-of-mouth - By asking family, friends, business associates, vendors, and (most importantly) satisfied customers for leads, referrals and recommendations.

Make sure to include any other promotional methods you plan on using (give-aways, contests, joint ventures, etc.).

IMPLEMENTATION PLAN
Describe the marketing and promotional efforts you will undertake to attract customers and when you plan on actually doing them. For example:

Jones’ Pest Control will initially use direct contact (door-to-door solicitation), flyer distribution throughout our target neighborhoods, and offer existing customers $5 off their monthly fee for every person they refer that becomes a paid customer. When revenues increase to the level where we can afford to do it (within approximately three months), we will allocate $1,000 for print advertisement. This will pay for a quarter-page advertisement in the local Yellow Pages and two 1/8th page classified ads in the “HomeWork!” section of the local newspaper. We will evaluate all marketing efforts on an ongoing basis to make sure they are effectively generating new business and will plan a new marketing strategy for our second year of business based on how well existing efforts are working, the target markets we want to reach, and the profits available for the marketing budget.

TIPS FOR COMPLETING THIS ASSIGNMENT

• Continue to follow the format shown in the previous homework assignment so that your plan is consistent throughout.

• Much of the work for this section will involve repeating what you have stated in earlier sections. Don’t reinvent the wheel! Feel free to “cut and paste” information that is applicable to this section. If possible, look for ways you can add more details or information. For example if you already wrote the following in a previous section:

Martha’s School of Yoga will be located in a 1,200 square foot space in the Oldtown Community Center located at 2929 Main Street in downtown Smallville. It will be leased on a yearly basis from the City of Smallville at a rate of fifty cents per square foot.

Try to add information that will illustrate the marketing value of the location:

Martha’s School of Yoga will be located in a 1,200 square foot space in the Oldtown Community Center located at 2929 Main Street in downtown Smallville. It will be leased on a yearly basis from the City of Smallville at a rate of fifty cents per square foot. The Oldtown Community Center is a terrific location for this business because it already hosts a number of community education courses throughout the building and has a weekly draw of approximately 2,000 students. It is located on a major street with an abundance of parking and is also a direct stop of two different bus routes.

• If you are still unsure on how to complete this week’s assignment, you can get help by e-mailing your coach with your specific question(s).

FREQUENTLY ASKED QUESTIONS
I’m not sure of the best way to promote my business. What should I do?
Like every other aspect of your business, you need to consider what is already being done in the industry, what is appropriate for your particular business, and how much can you spend. Ask yourself the following three questions:

• What are competitors doing (and are they successful)?

• Will the type of promotion you are considering effectively reach your target market?

• What size budget do I have for promotion?

Then, formulate a strategy that will work the best for you. Often, the most commonly used and effective promotional method of your industry is too expensive for you to consider. In that case, you need to less expensive promotional methods until your revenues allow you to increase your budget. The key is to be creative! Not all successful promotions are expensive – If you can find inexpensive, yet effective ways to get customers – DO THEM!

http://www.lylescenter.com/library/Marketing_homework.pdf