Notes on preparation - market research:
Marketing is often regarded as a soft discipline, where ideas and enthusiasm reign. In the end, however, you will spend a lot of time, effort, and money on generating sales. There is nothing soft about sales dollars. It is critical, therefore, that the answers to each of the questions in this section be based on solid research, and not just fuzzy ideas and optimism.
There are two kinds of market research: primary and secondary. Secondary research means using published information such as industry profiles, trade journals, newspapers, magazines, census data, and demographic profiles. This type of information is available in public libraries, industry associations, chambers of commerce, vendors who sell to your industry, government
agencies (US Census Bureau and state & local economic development agencies), and our own SBA Business Information Centers and One Stop Capital Shops.
Primary market research means gathering your own data. Examples would be: doing your own traffic count at a proposed location, using the Yellow Pages to identify competitors, doing surveys or focus group interviews to learn about consumer preferences. Include descriptions of your market research in the Marketing Plan narrative. Describe what you learned from your market research.
PRODUCT:
In the Products / Services section, you will describe your products/services as you see them. Now describe your product
and/or services from your customer's point of view
What do you think customers will like and dislike about your goods, services, and company ?
Why will customers patronize YOU ?
What after sale services will you provide?
- delivery - warranty
- service contracts - support
- follow-up - refunds
ECONOMICS.
What factors are known about your industry ?
- growth history - trends in target market
- current demand in target market
- growth potential and opportunity for a business of your size
What is the total size of your intended market ?
- number of items sold -total dollar value
- number of customers
What % of market share do you think you can capture ?
What barriers to your entry exist for you (bad) or your competitors
(good) into the market at this place and time ?
high production cost training
high unit price entry customer acceptance
manufacturing costs capital
marketing shipping costs
unions, cartels development costs
Why will potential customers patronize YOU
CUSTOMERS.
Identify your customers, their characteristics, and their geographic locations
(i.e.: their demographics). What market niche will you serve ?
Who will be your customers ?
What are their product/service preferences and reasons for
purchasing ?
Describe major categories of customers (wholesale/retail,
domestic / international, etc.).
Why do customers need YOUR new company ?
COMPETITION.
List your major competitors:
# direct / indirect names & addresses
their reputation location & distribution
Discuss your competition:
service size market share reputation
product or service features such as quality or price
What will be your competitive advantages & disadvantages ?
Compare your goods & services with competition:
- price - quality
- uniqueness - service
STRATEGY.
Promotion- How will you target customers for your products
and services ?
What are your customer contact plans ?
How will you promote & advertise your products and services:
trade shows? catalogs? word of mouth?
network of friends? advertising?
Pricing - What is your pricing strategy ?
Compare your prices with your competitors: are your
prices higher? lower? same ? Why ?
How important is price as a competitive factor ?
What are your payment, collection, and customer
credit policies ?
Channels of distribution - How will you sell your products and
services ?
retail wholesalers mail order
sales force independent representatives
Budget - What will it cost to implement your decisions about
marketing and selling your company's products and services ?
Can you test your marketing technique in a limited way
before full commitment ?
Sales forecast - Now that you have described your products,
customers, markets and marketing plans in detail, it is time
to attach some numbers to your plan. Use the Sales Forecast
spreadsheet (SALEFCST) to prepare a projection for the first year.
Doing your forecast month by month and category by category
will help you focus on the details of your sales plan.
Later, you will also forecast expenses, which will be easier
because expenses are more controllable and more predictable
than sales. However, an accurate sales forecast is the key
to determining whether your new venture idea is really
feasible. The forecast should be based on your market
research and, when available, upon industry averages.
We recommend that you do two forecasts: 1) a best guess which is what you really expect,
and 2) a worst case or low estimate which you are sure of reaching
no matter the business climate.
Projected Sales Forecast:
---> insert printed SALES FORECAST here
Narrative section: Briefly explain the basic assumptions
underlying your SALES FORECAST figures
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