1. Business Plan Preparation
Frank Moyes Leeds College of Business
University of Colorado Boulder, Colorado
Marketing Strategy

2. Today Marketing Strategy Revenue Model Customer acquisition costs

3. Next Week Operations Plan Development Plan Walk an Order
Marketing Strategy

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
Most important part of the Bplan
Marketing Strategy

5. Marketing Plan Objectives
Build on Market & Industry Analysis
Define the strategies & key actions to exploit the opportunity
Marketing Strategy

6. Marketing Plan Outline
Customer Research
Target Market Strategy
Channel Strategy
Positioning
Product/Service Strategy
Pricing Strategy
E-commerce
Communications Strategy
Sales Strategy
Revenue Model
Marketing Strategy

7. Customer Research Show your results How do customers pay?
George’s Questionnaire - qualitative 20 people
Surveys – walk-up, mailed, , on-line
Lurk & listen
How do customers pay?
Marketing Strategy

8. Target Customer Strategy
Profile of the target customers
Demographics, psychographics, etc.
Photo
How does TC perceive products/services?
How will you overcome brand loyalty? What will cause customers to switch? Spend money?
Identify first 10 customers
Future markets
Child care service
Who makes final decision?
Who else involved?
Marketing Strategy

9. How Do Customers Make Decisions?
How Do Customers Make Decisions?
Where, when & how
Initiator, Influencer, Decider, Purchaser & User
Identify criteria used to make decisions
Criteria may be different than your features
Where get information, advice
Where: retail stores, mail order, internet
When: time of year, month and day; seasons; end fiscal year
How: how collect info, sales people, brochures, TV, internet
how make decision: emotional, holistic, automatic, spontaneous
Initiator baby diapers - mom
Influencer - grandmother, other moms, dad
Decider - mom
Purchaser - mom
User – baby
Initiator purse – women, husband, family
Influencer – women of same demographic, friends, husband, Oprah
Decider - women
Purchaser – women, husband, boyfriend
User - women
Marketing Strategy

10. Customers Buy Benefits
Does your TC understand
How will you convince?
Marketing Strategy

11. You Must Prove That You Understand the Target Customer
Marketing Strategy

12. Channel Strategy Describe and justify the distribution channels
Potential channels
Distributors, wholesalers, retailers
OEM’s & VAR’s
E-commerce
Describe how you will gain access to the channels
Identify specific companies
What is the decision making process
Delivery to your customers, e.g. UPS is not the channel
Marketing Strategy

13. Positioning Positioning is relative to the competition
Overt or perceived
How are you unique & different?
Base on Buying Decision Criteria
Bicycle type
Racing
Road
Mountain
Cross bike
Cruiser
Descent
MBX
Price
Performance: speed, handling, ride comfort,
Durability
Quality
Weight
Design
High tech
Aesthetics
Benefits
Who is the TM?
Kids
Teenagers
Racers
Parents with Kids
Baby Boomers
Tourist locations – hotels
Transport to work
Channel
High end bike retailers – University Bikes; Pro Peleton
Bike retail chains – Performance
Sports retailers – Garts
Mass retailers – Walmart
Catalog
Internet
Rental
Direct sell
Competition
Huffy
Asia
Trek
Kestrel
Custom
Marketing Strategy

14. Perceptual Map Attribute 1 You Attribute 2 Competitor 3 Competitor 1
Exercise: Take 5 minutes and have each team present
Use Spectrum analysis
Marketing Strategy

15. Hot Chocolate Flavour HC Convenience Brown Palace Ski Resort cafe
Hershey
packets
Convenience
Exercise: Take 5 minutes and have each team present
Use Spectrum analysis
Marketing Strategy

16. Hot Chocolate “Coolness” HC Price Ski Resort cafe Hershey packets
Brown Palace
Exercise: Take 5 minutes and have each team present
Use Spectrum analysis
Marketing Strategy

17. Branding Perceptions, impressions and feelings
What must target customer believe about you
Every thing you do supports this
Other
Name of your company
Company characteristics – essence of personality, tone & manner
Marketing Strategy

18. Product/Service Strategy
Not the description
Product/service roll out
Initial product/services
Future product/services
Enhance the product/service with operations & service
Actions to sustain competitive advantage
Features & benefits
New technology
New process
Marketing Strategy

19. Pricing Strategy Describe and justify your pricing strategy
Provide evidence that your target customer will accept your price
Position your pricing relative to current and potential competition
Low price usually is NOT a good strategy!
Measure of management
Marketing Strategy

20. What Are the Pricing Methods?
What Are the Pricing Methods?
Value pricing - how much is customer willing to pay?
Commodity pricing
Set by the market
Supply and demand
Seasonality & perishability
Competition
Payback period – depends on impact on company profit
Rule of thumb – Keystone
Introductory low price to get customers to use
Cost plus – markup
Transaction fee
Razor & razor blade
A la carte
Commodity pricing
Set by the market
Supply and demand
Based on competitor(s) price
Value pricing - how much the customer is willing to pay for value received
Payback period – depends on impact on company profit
Industry rule of thumb – keystone pricing is common in retail businesses and equals purchase cost + 100% markup
Introductory low price to get customers to use
Cost plus + markup
Razor & razor blade
E-commerce – transaction fee, advertising, intermediary commission, affiliate commission fee, subscription fee
A la carte
Max price – what will attract enough customers
Min price – lowest price to make a profit
Marketing Strategy

21. Communications Be imaginative! Be a guerilla!
How you will communicate with current and potential customers?
Advertising – paid advertising newspapers, magazines, TV, internet
Public relations – articles in paper, journals, blogs, websites
Printed materials – flyers, brochures
Performances, concerts, exhibitions
Exhibitions
Why is this the most effective strategy?
Be imaginative! Be a guerilla!
Marketing Strategy

22. Guerilla Examples I
New restaurant invites local hairdressers for free meal just after opening
Mattress retailer has sleep over advertising on the ceiling of a retail store
News is created so it will be covered in local newspaper
Computer store does computer training for underprivileged kids
Owner makes bold predictions, does something unusual
Articles are written by the entrepreneur for newspapers
Mike Morris, Syracuse University
Marketing Strategy

23. More Guerilla Examples II
More Guerilla Examples II
Reciprocal advertising: two businesses mention one another in their ads
Store offers discount card/coupon that appreciates in value each time it is used
Coupon that is worth something different each time it is used
Theatre places speakers outside front of facility with movies soundtracks playing; bakery purposely lets smells waft into customer passageway of mall
Mike Morris, Syracuse University
Marketing Strategy

24. More Examples III
Bowling alley charges based on number of bowling pins customer knocks down
Bicycle retailer puts promotional tags on bike racks around town
Day care center adds cameras and streaming videos so parents can see how children are treated
Flower shop with lack of visibility at their location decorates popular park and some small cafes in the area with creative and simple flower arrangements
Mike Morris, Syracuse University
Marketing Strategy

25. Sales Strategy
How will you recruit, train, and compensate our sales force?
How will you support the sales effort?  
Internal staff
Service operations
How will you get orders?
Personal selling
Online purchasing
TV infomercials
Direct mail
800 telephone
Who will do the selling?
An internal sales force
Field sales force
Manufacturer's reps
Telephone solicitors
Marketing Strategy

26. Customer Acquisition Costs
Costs to Get a Customer
Number of Customers
Costs to get a customer
Sales salaries, commissions
Advertising & promotion
Customer & tech support
Website
Travel & entertainment
Number of customers
Financial Plans

27. Revenue Model
Marketing Strategy

28. Two Approaches Top down – market penetration & timing
Bottom up – pipeline, revenue by customer
Marketing Strategy

29. Revenue Model
Marketing Strategy

30. Revenue Model
Marketing Strategy

31. Revenue Model
Marketing Strategy

32. Revenue Model
Marketing Strategy

33. Revenue Model
Marketing Strategy

34. Revenue Model
Marketing Strategy

35. Revenue Model
Marketing Strategy

36. Revenue Model
Marketing Strategy

37. Revenue Model Variables
Market potential - number of customers, transactions or units, purchases
Size & growth
Market share - penetration rate
Product/Services offered
Roll-out strategy
Range & mix
New Products/Services
Obsolescence
Frequency of purchase – per day/week/month
Capacity Utilization – per time period, event
Prices
Price per customer, transaction or unit
Average revenue per customer or transaction
Channel strategy - discount
Marketing Strategy

38. Revenue Model (Bottom-up)
Identify specific customers
Identify decision maker
Determine
Annual purchases today & future
Who purchase from & level of satisfaction
What do you need to do to get an order?
If you meet the criteria, how much business can you expect?
Marketing Strategy

39. How Much Do Your Customers Care?
High Involvement Low Involvement
Easy to get attention Hard to get attention
Will invest to upgrade Will delay upgrading
Will try new brands Hard to change
About “wants” About “needs”