Business Plan Preparation Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado 1 Product/Service

Today’s Agenda Topics PRODUCT/SERVICE Margins Read BP pp 6-7 Elevator Speech In the Fire Hand-in 3 alternative value propositions Model company description Product/Service 2

Next Week Is This a Real Business? (max 10 slides) Interim Peer Evaluation Make an appointment with instructor for a 30 min meeting about where you are. Product/Service 3

In the Fire Grading Product/Service 4

Business Plan Elements Executive Summary Company Overview Market & Industry Analysis Product/Service Description Marketing Plan Operations Plan Development Plan Management Competitive Advantage Financial Plan Funding Product/Service 5

Product/Service Sections Features Benefits Proprietary Rights Stage of Development Product/Service 6

Features Detailed description Attributes Environment Use photos, images, schematics What is unique? What is evidence that customers want these features? Systems approach – how produce & deliver Don’t assume people know or understand your product/service Product/Service 7

Attributes Performance: durability, quality of materials, defect levels, tolerances, construction, dependability, functional performance (acceleration, nutrition, taste), efficiency, safety, styling, packaging, etc. Cost: purchase price, quantity discounts, operating costs, repair costs, cost of extras or options, cost of installation, trade in allowance, likely resale value, etc. Availability: carried by local stores, credit terms, quality of service available from local dealer, delivery time, credit card, on-line transactions, etc. Service: hours, warrant, guarantee, return/replacement policy, upgrades, maintenance, training, installation, repair service, spare parts, customer support, tech support, training, product design, make to order, level of inventory, quotation response time, lead time, quality certification, employee capabilities, etc. Environment: location, atmosphere, layout, fixtures, aesthetics, style, sound, lighting, color, etc. Product/Service 8

Benefits Describe major benefits - be specific What is the evidence that benefits are understood by the market? Product/Service 9

Benefits Emotional: ambition, power, independence, achievement, ambition, pride of ownership, comfort, love, friendship, security, style, self Improvement, etc. Social: status, image, popularity with friends or family members, reputation of brand, personal relationships, style, fashionable, etc. Health: stress, fitness, mental capacity, strength, sex life, quality of life, muse, etc. Financial: revenue, costs, savings, productivity, pricing, profitability, market share, save time, productivity, etc. Convenience? Objective is distinguish between benefits & features, not put into categories Product/Service 10

Features & Benefits FEATURES are about the product or service and are often tangible attributes BENEFITS are about the customer and are often about their needs, desires, dreams

Features & Benefits FEATURES justify a product’s existence. BENEFITS motivate (re)purchase.

Features & Benefits FEATURES are rational. BENEFITS are emotive. To define the key benefits, keep asking: “Why does my customer care about that?”

Breathe Right Nasal Strips FEATURES Flexible, spring-like bands gently lift nasal passages. Special adhesive holds strip comfortably in place. Improves airflow by 31%.

Breathe Right Nasal Strips BENEFIT (L1)BENEFIT (L2) Reduces SnoringMy spouse sleeps My spouse is cheerful My marriage thrives Relieves CongestionGreat night’s sleep I feel energetic Higher performance I achieve my dreams

Other Examples… FEATURE BENEFIT Overnight deliverySaves your job “When it absolutely… Inexpensive Biz LodgingPeak Performance “No, but I did sleep at a Holiday Inn last night” Intoxicating refreshmentLook sexy, get the girl (every beer ad)

Pathway to Brand Loyalty attribute benefit value emotional connection

NetDog FeatureBenefit Adaptable to new network threats Protection without a reduction in user productivity Modular rules based systemAdaptable to new business requirement and new threats Guaranteed zero packet lossEliminates the risk of false negatives Intelligent network adaptationProtection is provided regardless of the network topology Ships with a standard rule setProvides out of the box protection from common attacks Scripting language and APICustomers can develop their own powerful rules Web based reporting systemImproves forensics and visibility into the security of the network Web based interfaceMakes administration of the system easy Product/Service 18

Features DUO Benefits Ergonomic design Eliminates back and shoulder pain so parents feel more comfortable while carrying their baby. CocoonsAllow parents to more easily attach and detach baby from harness, eliminating fear of straining arms, dropping or tightly squeezing baby. Multiple Cocoons Parents maintain a look that can be seasonally updated to provide the feeling that they are on the leading edge of fashion. Babies are happier and more comfortable in Cocoons specifically designed to fit their current developmental stage. Unexpected Attributes Convenient features allow parents to keep important items, like keys, easily accessible. This saves time and energy spent preparing to get out the door. Product/Service 19

Product & Service Conclusions Make it real Photo, rendering, specs faculty.colorado.edu/moyes/html/documents/Busi ness%20Plan/Amari%20Final%20BPLAN.pdf faculty.colorado.edu/moyes/html/documents/Busi ness%20Plan/Amari%20Final%20BPLAN.pdf Prototype Evocative description Make it exciting Sell your concept Product/Service 20

Product/Service 21 Quality

Moments of Truth Each customer contact is called a moment of truth. You have the ability to either satisfy or dissatisfy them when you contact them. 6-22

Quality Dimensions I Performance - the primary operating characteristics of the product or service Features - the characteristics that supplement the basic functioning of the product or service Reliability - probability of the product or service failing within a specified period of time Conformance - the degree to which a product or service meets acknowledged standards Product/Service 23

Quality Dimensions II Durability - a measure of product life (both technical and economic) Serviceability - the speed, courtesy, competence, and ease of repair or recovery Aesthetics - how a product or service looks, feels, sounds, tastes, or smells Perceived Quality - various tangible and intangible aspects of the product from which quality is inferred Product/Service 24

Service Quality Dimensions Reliability - ability to perform service dependably & accurately - receive mail at same time each day Responsiveness - willingness to help customers & provide prompt service - avoid keeping customers waiting for no apparent reason. Assurance - knowledge & courtesy of employees and ability to convey trust and confidence - being polite and showing respect for customer. Empathy - provision of caring, individualized attention to customer - being a good listener. Tangibles - appearance of physical facilities, equipment personnel and communication material - cleanliness.. Product/Service 25

Margins % Gross Profit Margin % Contribution Margin % Net Profit Margin % Operating Expenses Product/Service 26 Revenue – COG’s Revenue Revenue – Variable Costs Revenue Net Earnings Revenue Sales, General & Admin Revenue

Margins % Product/Service 27