Sample of table of contents for a business plan

Steps for development of marketing plan when setting a business plan

Steps for developing the marketing plan

1. Open with a summary of your marketing mix.

Just as an executive summary serves the function of giving quick information to the reader of the business plan, so too an upfront summary of your overall marketing plan helps your reader know what to expect as he or she reads on.

2. Identify your target market or target niche within a market.

Even though you have addressed this issue in another part of the business plan, restate it briefly here. Your reader may have skipped to this section without having read the earlier discussion of the target market, and even if the reader has read all sections, a quick reminder can only help get your message across. So, before you begin to describe how you plan to sell your product or service, let your reader know to whom you are selling. By having the target market or the niche within a target market in mind, your reader can make a more reasoned evaluation of your marketing plan.

3. Give a summary of the competition.

Again, a quick review of the pertinent factors of the marketing plan helps the reader understand the strategy of your plan. State who the competitors are and describe their marketing strategies. That information serves as a contrast to your own plan.

4. Describe the key factors of success within the industry.

Is quick response something customers expect? Are technological improvements in product or production process the key to success in your industry? Are consumers looking for lowest prices? Make sure your reader understands what factors are important for this particular target market.

5. Define your marketing mix in terms of the four Ps: product, price, place, promotion.

In this section, describe how you will market your product or service and give your rationale for your choices of marketing strategies. Your reader will want to see how each marketing decision addresses the target market's needs and the competitors' alternatives. 

You should discuss each of the four Ps, even if you don't necessarily use all of them. The reader will expect to see them all in your plan. For example, if your service is provided instantly via telecommunications, then place may not require as much attention as promotion for developing a brand awareness of your service.

6. Give the timeline for implementing your marketing strategies.

By identifying specific times (use "first month" rather than an actual date) for implementing your marketing plan, you will give your reader a sense of the overall time frame and expectations for results. A timeline, whether stated in words or pictorially as a graph, will give a concrete reality to the ideas of the marketing proposal.

7. Conclude with a vision of future plans.

You have been focusing on getting a particular product or service launched, but the reader may wonder, what's next? Where do you intend to take your idea after the initial start-up? Give the reader an idea of how you intend to expand and grow in the future. Will you broaden the market geographically or by age range? Will you add new products to your line? By revealing your vision of the business beyond the three to five years indicated in the pro forma financial plans, you can share with the reader your enthusiasm about the broader potential of the business venture.

Steps for determining your information needs in preparation of a business plan

1. Review the elements of a basic business plan.

Look at the larger picture to determine which pieces are filled in and which pieces need more attention. Depending on your business venture, you may not need to devote as much attention to some parts of a business plan as others, but be sure each section is addressed as fully as needed. For example, Laszlo emphasized the marketing concerns of PCC because they were the critical success factors. The operating plan, however, had fewer variables and received less attention.

2. Define the categories of information you need.

As you develop your business plan, you might find that you are focusing on your own business without stepping back to look at the broader picture of the competitive industry. For example, you may have all the information you need about producing your own product, but you don't know what your competitors' production costs are. This information is important to ensure the cost competitiveness of your product. 

Another area that may not be given adequate attention is the regulatory arena. Are you fully informed about government tax or regulatory issues that may affect your business? For example, if you are planning to trade internationally, then you should check on the trade regulations of both your home country and the foreign country.

3. Determine the critical information you have.

Don't waste your time and efforts on finished work. Checking that you have complete information on certain critical areas will allow you to devote your energies to those areas that need further work. For example, if you already have distribution choices identified, then move on to other concerns such as researching OSHA requirements on the production floor.

4. Determine the information you need to retrieve.

As you are making this assessment, keep in mind that you should focus only on the critical areas of information you need. Typically, these areas will be outside of your expertise. If you are a marketer, then the finance or production information may be lacking. 

Get help to determine information needs. Since the gaps will generally lie in unfamiliar territory, find someone on your team or hire a consultant to guide you through the process of determining what and how much information you need in that region.

5. Explore where and how will you get it.

In many ways, access to information is becoming easier and easier. The Internet continues to grow exponentially, providing information at a keystroke. Use search engines to find the Web sites for government, industry, marketing, and company information. For example: 

• The Small Business Administration (SBA) has a wealth of information on its Web site, and other government agencies offer regulatory and tax information online.
• Accounting firms have Web sites that can help you develop your financial plans.
• Company Web sites can give you competitive and market information.

Industry publications - newsletters, journals, etc. - are a rich source of information. Check out these resources for your own industry and the industries involved in the process of producing your product or service. For example, if the distribution of your product requires trucking, you might want to read some trucking industry journals.

Market research may require professional help. If you need more information about the buying patterns of your target market, then a marketing consultant could develop a research program to find the answers you need.

Have you located the resources or potential strategic partnerships that are available? Don't forget the resources of the SBA—it's one arm of the government that can provide help, information, and services for new business ventures.

How to calculate return on investment ROI or IRR or Future Value when you start a project or business plan .

Investors also want to know the expected financial returns—

typically either the return on investment (ROI) or the internal rate of return (IRR). 

For an internal project, the financial return should exceed the company's hurdle rate—the minimum rate of return expected of all projects. 

For a risky start-up business, investors generally require a higher return to compensate for the higher level of risk of loss.

To calculate the ROI, divide net operating income by total investments. 

For example, $45,000/$300,000 = 0.15 or 15% ROI. 

The higher the ROI, the more efficient the company is in using its capital to produce a profit.

To calculate an IRR of 50%—the return an investor might expect for a risky investment—use the following formula:

FV = Investment x (1+0.5)ⁿ

where FV is future value, investment is the dollar amount of the investment, and n is the number of years to receive the return.

How to calculate breakeven point when you are preparing a marketing strategy or business plan ?

The breakeven point is the time when the business is neither losing nor gaining money. 

This is the pivotal moment when the business begins to be profitable. 

Will it take six months or two years for the business venture to reach its breakeven? 

The reader of your business plan will want to know when and at what level of sales the breakeven point will occur.

The breakeven point for sales is calculated as follows:

where fixed costs are those costs that don't change as sales go up or down (for example, rental of facilities) and variable costs vary in proportion to sales (for example, raw materials). This calculation could be included in the attachments.

What assumptions do you have to consider when making a business plan

Assumptions

State your assumptions about the estimated industry and market growth rates. 

Then  about the internal variables of the business, such as the variable and fixed costs, 

growth rate of sales, 

cost of capital, 

and seasonal cash flow fluctuations.

Your assumptions  should be realistic, within the bounds of industry experience. Include a more detailed set of assumptions as an attachment. 

Be sure to document your assumptions. Give your sources, evidence, expert opinions, and your own logic for choosing a certain growth rate or cost for distribution.

How to determine breakeven point when you prepare a business plan

The operations section of the business plan should give the reader the critical success factors affecting how the company creates value for the stakeholders of the business. The most important of these factors is the breakeven point;

 that is, the point at which unit sales equal operating costs. 

The breakeven point determines how many units of the product must be sold to break even, to cover the cost of production, so that the following units will produce a profit. It identifies the point at which the business will begin to make money. 

How to develop a Marketing Strategy Mix when preparing a business plan

The marketing strategies describe the way your marketing objectives will be achieved. 

Your strategic choices define how you will make the target market aware of your product, 

how you will motivate the customer to purchase your product, 

how you will build customer loyalty for your product, 

how you will achieve the projected return on sales

 The strategies, or marketing mix, will be the most effective combination of the classic four Ps of marketing—product, price, place, and promotion as follow

• Product/service. Make sure that your product or service is consistent with both your company philosophy and the target market needs. For example, if the company philosophy is to provide the highest quality accounting services, then those services must be the most accurate and comprehensive available to wealthy customers who require accurate and comprehensive services for their financial portfolios. 
• Price. At what price point will you offer your product or service? Will there be an established price, or will it be tiered or variable depending on consumer demand? Your pricing decisions will depend, on the one hand, on the price sensitivity of your market and the market's perceived value of your product. On the other hand, total costs and required profit margin also affect the price of the product. Pricing is difficult to predict. You will have a range of prices available determined by costs and expected contribution margins, but within that range, price adjustments can occur in response to consumer demand. 
• Place. The term place indicates the physical movement of products—how the product will be transported from the plant to the end user. What channels of distribution will be used? How will the product be merchandised? In what kind of retail store or location? 
• Promotion. Promotion involves creating consumer awareness of the product. It is the communication function of marketing, communicating with the customer about the benefits of the products. Promotion includes activities such as these: 
• • Word of mouth. This selling tool is the cheapest and most effective kind of promotion—satisfied customers spreading the word. However, it is unpredictable and difficult to control. If the word is positive, then your sales will increase, but a negative message is difficult to overcome. 
  • Sales promotion. In this case, you control the message by spreading the word to the consumer through coupons, samples, and demonstrations. A relatively low-cost program, sales promotion can reach a wide audience. 
  • Direct sales. Direct selling is more expensive than the general approach of sales promotions, but it is an important tool for developing relationships with customers while motivating them to buy. The tactics used in direct sales range from individual sales calls to mass telemarketing. 
  • Advertising. Advertising influences the consumer through paid persuasive messages delivered to the target market. This sales approach can be expensive, but the payoff is successfully building a brand image and brand loyalty. 

Depending on your resources and whom you are trying to reach, select the interrelated mix of marketing strategies appropriate for your product or service and your target market.

Your marketing plan should fit with all the other pieces of the business plan, and it should show how the specific marketing objectives will be achieved. The marketing plan should also be a dynamic plan. Use it to monitor progress and modify it as needed to reflect changing circumstances.

How to develop a marketing plan - General Guidlines

key factors that affect the marketing of your product or service. 

• Concentrate on the opportunity—the customer problem that your product or service is solving. You may be fixing a weakness in the competitors' services by offering customized service or guarantees on products that aren't available elsewhere. 
• Review your marketing objectives. At what level of sales will you reach the breakeven point? When do you anticipate reaching that point? How long will it take to reach the next sales milestone? What strategies can you design to fulfill these objectives? 
• Focus on the buying behavior of the customer. When, where, why, and how do they buy this product or service? What needs are being fulfilled for them? What factors are important to the consumer in choosing this type of product or service 
• Determine the value of each customer to your business. Weighing the cost to acquire a customer with the long-term value of that customer helps you decide on the appropriate marketing strategies to use. For example, if each customer is worth winning and keeping, then the more expensive marketing strategies of relationship-oriented direct sales might be worth the cost. If, on the other hand, you are trying to reach a wide range of customers, then less expensive strategies, such as mass mailings of sales promotions, can be more effective. To determine the value of a customer, consider the following questions:
  • Are you building an annuity business, such as magazine subscriptions that continue for years, or does your business provide a quick, one-time service?
  • Do customers buy your product often as a consumable or inexpensive entertainment, or is your product durable, only purchased occasionally during a lifetime? 
  • Do you need to build brand loyalty, or is your product/service the only one that will fill the customers' needs? 
  • Is the process of buying the product/service relationship-oriented, requiring direct sales, or is it transaction-oriented and easily adapted to direct mail marketing or online selling?

How can you make the competitive analysis when you are making a strategic business plan.

Competitors can be companies within the industry producing similar products or services, such as motorcycles within the motorcycle industry. Or competitors could be companies in rival industries producing products or services that fall into another industry category but that solve the same consumer problem—for example, if the problem being solved is finding a low-cost alternative to owning and driving a car, then owning and riding a motorcycle or taking public transportation would both be competitive solutions. The readers of your business plan will want to know who the direct and potential competitors of your business venture are because they represent a threat to the success of your venture. Understanding who and what your competitors are can reduce the risk of the failure of your business. Here are some questions your readers may ask: 

• Who are the competitors? Think in terms of what companies solve the same problems for the customer. 
• Identify the major competitors, their products and services, and their strengths and weaknesses. 
• SWot Analysis 
• How much market share does each competitor control? 
• What are their marketing strategies? 
• What are their key success factors?
• What differentiates your product or service from the competitors' products or services?
•  How are you responding to a customer need in a new, useful, and unique way? 
• How much of a threat are your competitors to your venture? 
• Do they enjoy strong brand recognition of their products? 
• Will they aggressively block the entrance of a new rival? 
• Will they recognize your special differentiating attributes and appropriate them for their own products or services?

Please focus on questions written Bold

But all questions very important 

Replying bold questions is very crucial when presenting a business plan

Venn Diagram for setting a new business plan

Venn Diagram for setting a new business plan 

Why do you have to really understand business environment before setting a plan ?

analysis of  industry,  competition,  market in which our business will grow is essential to the development of a robust business plan. 

Your analysis will show that you have choose a real opportunity that solves a real customer problem or needs . 

The result of the analysis will 

• Give you  a thorough understanding of the business environment
• Guidance in developing an effecient  marketing plan
• To convince readers of your business plan of the real potential of your business .

The purpose of the business environment analysis is to show the unique concept will you offer the customer that will induce them to purchase your product rather than your competitors

If you start by clear study of the business environment you will show competitive edge clearly over competitors