Marketing Plan

Entrepreneur
Submitted to : Mr. Abelito T. Quiwa, DBA
Submitted by : Karla Joyosa & James Estropia

THE MARKETING PLAN:

LEARNING OBJECTIVES:
1. To understand the relevance of industry and competitive analysis to the
market planning process
2. To describe the role of marketing research in determining marketing strategy
for the marketing plan.
3. To illustrate an effective and feasible procedure for entrepreneur to follow
engaging in a market research study
4. To define the steps in preparing the marketing plan
5. To explain the marketing system and its key components
6. To illustrate different creative strategies that may be used to differentiate or
position the new ventures products or services.

INDUSTRY ANALYSIS:
Prior to the preparation of the marketing plan, the entrepreneur will need to
complete the industry analysis section of the business plan. The primary focus of the
industry analysis is to provide sufficient knowledge of the environment that can affect
marketing strategy decision making. This market research may add important
valuable insights that can assist the entrepreneur in determining the most effective
market position, setting market goals and objectives, and determining what action
programs are necessary to meet those goals and objectives.
One of the important benefits of the upside-down pyramid approach to industry
analysis is that the entrepreneur can begin to understand competitors strengths and
weaknesses which may provide valuable insight in how to position the products or
services of the new venture and Techniques for recording and evaluating this
information on the competitive environment.

COMPETITOR ANALYSIS:
The entrepreneur should begin this step by
first documenting the current strategy of each
primary competitor. The information on competitors
can be gathered initially by using as much public
information as possible and the complementing this
with a marketing research project. Newspaper
articles, web sites, catalogs, promotions, interviews with distributors and customers,
and any other marketing strategy or company information available should be
reviewed. A simple google, yahoo or MSN search can link the entrepreneur to many
good sources of information on competitors. A library search using such data bases
as business source complete, LexisNexis, Factiva or Hoovers can also provide
access to any newsworthy articles on specific competitors. These articles should be
scanned for information on competitor strategies and should identify the names of
individuals who were interviewed, referenced, or even mention in the article. Once
the strategy has been summarized, the entrepreneur should begin to identify the
strengths and weaknesses of each competitor.

MARKETING RESEARCH FOR THE NEW VENTURE:

Information for developing the marketing plan may necessitate conducting
some marketing research. Marketing research involves the gathering of data to
determine such information as who will buy the product or service, what is the size of
the potential market, what price should be charged, what is the most appropriate
distribution channel and what is the most effective promotion strategy to inform and
reach potential customers, since marketing research costs vary significantly, the
entrepreneur will need to assess available resources and the information needed.
There are also some research techniques that are not costly and can provide at least
initially, significant evidence to support the market potential for the new venture, one
of these techniques is the focus group.
Marketing research may be conducted by the entrepreneur or by an external
supplier or consultant. There are also opportunities for entrepreneurs to contact their
local colleges or universities to identify faculty who teach marketing and are willing to
have external clients for student research projects.

Market research begins with a definition of objectives or purpose. This is often

the most difficult step since many entrepreneurs lack knowledge or experience in
marketing and often dont even know what they want to accomplish from a research
study. This, however, is the very reason why marketing research can be so
meaningful to the entrepreneur.
STEP ONE: DEFINING THE PURPOSE OR OBJECTIVES
The most effective way to begin is for the entrepreneur to sit down and make
a list of the information that will be needed to prepare the marketing plan. For
example, the entrepreneur may think there is a market for his or her product but not
be sure who the customers will be or even whether the product is appropriate in its
present form. Thus, one objective would be to ask people what they think of a
product or service and whether they would buy it, and to collect some background
demographics and attitudes of these individuals. This would satisfy the objective or
problem that the entrepreneur. Other objectives may be to determine the following:

How much would potential customers be willing to pay for the product or
service?
Where would potential customers prefer to purchase the product or service?
Where would the customer expect to hear about or learn about such a product
or service?

STEP TWO: GATHERING

SECONDARY SOURCES

DATA FROM

Secondary sources, offer a means of

gathering information for the industry analysis
section of the business plan. There are many
other market research secondary sources that
may be used to address the specific objectives of the project identified in step one.
As mentioned, trade magazines, newspaper articles, libraries, government agencies,
and the internet can provide much information on the industry market and
competitors. The internet can even be used to gather informal primary data through
chat groups.

Commercial data may also be

available, but the cost may be prohibitive
to the entrepreneur. However, business
libraries may subscribe to some of these
commercial services such as Nielsen
indexes, audits and surveys national
market
indexes,
and
information
resources. Before considering either
primary sources or commercial sources
of information, the entrepreneur should
exhaust all free secondary sources.
The most important purpose of reviewing secondary sources is to obtain
information that will assist the entrepreneur in making the best decisions regarding
the marketing of a product or service. Improvements in information technology today
make this a very effective source in gathering information on customers, competitors
and market trends. Completion of this task will also determine if more data are
needed, in which case a primary data gathering will then need to be planned.
STEP THREE: GATHERING INFORMATION FROM PRIMARY SOURCES
Information that is new primary data. Gathering primary data involves a data
collection procedure such as observation, networking, interviewing, focus groups, or
experimentation and usually a data collection instrument, such as questionnaire.
Observation is the simplest approach. The entrepreneur might observe potential
customers and record some aspect of their buying behaviour. Networking, which is
more of an informal method to gather primary data from experts in the field, can also
be a valuable low-cost method to learn about the market place. One study of new
ventures found that the most successful ventures were focused on information about
competitors, the customers and the industry, using networking, trade associations,
and recent publications. Less successful ventures were more focused on gathering
information on general economic and demographic trends and hence had less of a
sense of what was happening in their specific target market.
Interviewing or surveying is the most common approach used to gather
market information. It is more expensive that
observation but is more likely to generate more
meaningful information. Interviews may be
conducted in person, by telephone, through the mail
or online, an approach growing in popularity,
particularly for firms with an existing customer base.
Each of these methods offers advantages and
disadvantages to the entrepreneur and should be
evaluated accordingly.

The questionnaire, or data collection instrument, used by the entrepreneur

should include questions specifically designed to fulfil one or more of the objectives.
Questions should be designed so they are clear and concise, do not bias the
respondent, and questionnaire should be easy to answer. The questions are
designed to satisfy the objectives of the entrepreneur, which are to ascertain the
need, location and determination of the most important services to offer and price.
Support in the design of questionnaires can often be attained through small-business
development centers, members of the service corps of retired executives or students
in marketing research classes at a local college or university since the instruments is
important in the research process. It is recommended that entrepreneurs seek
assistance if they have no experience in designing questionnaires. Someone other
than entrepreneur should lead the focus groups. Often this is a good project for
students at a college or university in a marketing research class.
STEP FOUR: ANALYZING AND INTERPRETING THE RESULTS
Depending on the size of the sample,
the entrepreneur can hand tabulate the
results or enter them on a computer. In either
case, the results should be evaluated and
interpreted in response to the research
objectives that were specified in the first step
of the research process. Often, summarizing
the answers to questions will give some
preliminary insights. Then data can be crosstabulated to provide more focused results. For example: the entrepreneur may want
to compare the results to questions by different age groups, sex, occupation,
location, and so on. Continuing this fine-tunning can provide valuable insights,
particularly regarding the segmentation of the market.
UNDERSTANDING THE MARKETING PLAN:
Once the entrepreneur has gathered all the necessary information, he or she
can sit down to prepare the marketing plan. The marketing plan represents a
significant element in the business plan for a new venture. It serves a number of
important functions or purposes. Primarily, the marketing plan establishes how the
entrepreneur will effectively compete and operate in the marketplace and thus meet
the business will operate have been established, the entrepreneur can assign costs
to these strategies, which then serves the important purpose of establishing budgets
and making financial projections. The marketing plan, like any other type of plan,
may be compared to a road map used to guide a traveller. It is designed to provide
answers to these basic questions:

1. Where have we been?

This would imply some background on the company, its strengths and
weaknesses, some background on the competition and a discussion of the
opportunities and threats in the marketplace. When the marketing plan is
integrated as part of the business plan, this segment would focus on some history
of the market place, marketing strengths and weaknesses of the firm and market
opportunities and threats.
2. Where do we want to go?
This question primarily addresses the
marketing objectives and goals of the
new venture in the next 12months. In
the initial business plan, the objectives
and goals often go beyond the first year
because of the need to project profits
and cash needs for the first three years.
3. How do we get there?
This questions discusses the specific marketing strategy that will be
implemented, when it will occur, and who will be responsible for the monitoring of
activities. The answers to these questions are generally determined from the
marketing research carried out before the planning process is begun. Budgets
will also be determined and used in the income and cash flow projection.
Management should understand
that the marketing plan is a guide for
implementing marketing decision
making and not a generalized
superficial document. The mere
organization of the thinking process
involved in preparing a marketing
plan can be helpful to the
entrepreneur because, to develop
the plan, it is necessary to formally
document and describe as many marketing details as possible that will be part of
the decision process. This process will enable the entrepreneur not only to
understand and recognize the critical issues but also to be prepared in the event
that any change in the environment occurs.
Each year the entrepreneur should prepare an annual marketing plan before
any decisions are made regarding production or manufacturing, personnel
changes, or financial resources needed. This annual plan becomes the basis for
planning other aspects of the business and developing budgets for the year.
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CHARACTERISTICS OF A MARKETING PLAN:

The marketing plan should be designed to meet certain criteria. Some
important characteristics that must be incorporated in an effective marketing plan
are as follows:

It should provide a strategy for

accomplishing
the
company
mission or goal
It should be based on facts and
valid assumptions.

Allocation of all equipment, financial resources, and human resources must be

described.

An appropriate organization must be described to implement the marketing

plan
It should provide for continuity so that each annual marketing plan can build
on it, successfully meeting longer term goals and objectives.
It should be simple and short. A voluminous plan will be placed in a desk
drawer and likely never used. However, the plan should not be so short that
details on how to accomplish goals are excluded.
The success of the plan may depend on its flexibility. changes, if necessary,
should be incorporated by including what-if scenarios and appropriate
responding strategies.
It should specify performance criteria that will be monitored and controlled.

Since the term marketing plan denoted the significance of marketing, it is important
to understand the marketing system. The marketing system identifies the major
interacting components, both internal and external to the firm, that enable the firm to
successfully provide
products
and
services
to
the
market
place

FACTS NEEDED FOR MARKETING PLAN:

Who are the users, where they are located, how much do they buy, from
whom do they buy and why?
How have promotions and advertising been employed and which approach
has been most effective?
What are the pricing changes in the market, who has initiated theses
changes, and why?
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What are the markets attitudes concerning competitive products?

Who are the competitors, where they are located, and what advantages/
disadvantages do they have?
What marketing techniques are used by the most successful competitors? By
the least successful?
What are the overall objectives of the company for the next years and five
years hence?
What are the companys strengths and weaknesses?
What are the ones productions and capabilities by product?

In addition to the external environmental factors, there are internal environmental

factors which, although more controllable by the entrepreneur, ca also affect the
preparation of the marketing plan and implementations of an effective marketing
strategy. Some of the major internal variables are as follows:
FINANCIAL RESOURCES:
The financial plan, should outline the
financial needs for the new venture. Any marketing
plan or strategies should consider the availability of
financial resources as well as the amount of funds
needed to meet the goals and objectives stated in
the plan.

MANAGEMENT PLAN:
It is extremely important in any
organization to make appropriate assignments
of responsibility for the implementation of the
marketing plan. In some cases, the availability
of a certain expertise may be uncontrollable. In
any event, the entrepreneur must build an
effective management team and assign the
responsibilities to implement the marketing plan.

SUPPLIERS

The suppliers used are generally based on the number of factors such as
price, delivery time, quality and management assistance. In some cases, where raw
materials are scarce or there are only few suppliers of a particular raw material or
part, the entrepreneur has little control over the
decision. Since the price of supplies, delivery
time, and so on, are likely to impact many
marketing decisions, it is important to
incorporate these factors into the marketing
plan.
COMPANY MISSION:
Every new venture should define the
nature of its business. This statement helps to define the companys mission and
basically describes the nature of the business and what the entrepreneur hopes to
accomplish with that business. This mission statement or business definition will
guide the firm through long term decision making.

THE MARKETING MIX:

The preceding environmental variables will
provide much important information in deciding
what will be the most effective marketing
strategy to be outlined in the marketing plan. The actual short term marketing
decisions in the marketing plan will consists of four important marketing variables:
product or services, pricing, distribution and promotion. These four factors are
referred as the marketing mix. Each variable will be described in detail in the
strategy or action plan section of the marketing plan. Although flexibility may be an
important consideration, the entrepreneur needs a strong base to provide direction
for the day to day marketing decisions.
CRITICAL DECISIONS FOR MARKETING MIX:
PRODUCT:
Quality of components or materials, or style,
features, options, brand names, packaging,
sizes, service availability and warranties.
PRICE:
Quality image, list price, quantity, discounts,
allowances, for quick payment, credit terms, and
payment period
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CHANNELS OF DISTRIBUTION:
Use of wholesalers or retailers, type of
wholesalers or retailers, how many,
length of channel, geographic coverage,
inventory and transportation.
PROMOTION:
Media alternatives, message, media budget, role of personal selling, sales promotion
and media interest in publicity

STEPS IN PREPARING THE MARKETING PLAN:

Illustrates the various stages involved in preparing the marketing plan. Each of these
stages, when completed, will provide the necessary information to formally prepare
the marketing plan
DEFINING THE BUSINESS SITUATION:
The situation analysis is a review of
where we have been. It also considers many
of the factors that were defined in both the
environmental analysis section of the business
plan and the industry analysis.
To fully respond to this question, the entrepreneur should provide a review of
past performance of the product and the company. If this is a new venture, the
background will be more personal, describing how the product or service was
developed and why it was developed. If the plan is being written after the new
venture has started up, it would contain information on present market conditions
and performance of the companys goods and services. Any future opportunities or
prospects should also be included in this section of the plan
At this point, the entrepreneur should simply review some of the key elements
of this section to help provide a context for the marketing segmentation and actions
that will be stated in this section of the business plan.
DEFINING THE TARGET MARKET:
Either from the industry analysis or from the marketing research done, the
entrepreneur should have a good idea of who the customer or target market will be.
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Knowledge of the target market provides a basis

for determining the appropriate marketing action
strategy that will effectively meet its need. The
defined target market will usually represent one or
more segments of the entire market. Thus, it is
important even before beginning the research to
understand what market segmentation is before
determining the appropriate target market.
MARKET SEGMENTATION: is the
process of dividing the market into small
homogenous
groups.
Market
segmentation allows the entrepreneur to
more effectively respond to the needs of
more homogenous consumers. Otherwise
the entrepreneur would have to identify a
product or service that would meet the
needs of everyone in the marketplace.
The process of segmenting and targeting customers by the entrepreneur should
proceed as follows:
I.
II.

III.
IV.

Decide what general market or industry you wish to pursue

Divide the market into smaller groups based on characteristics of the
customer or buying situations
A. Characteristics of the customers:
1. Geographic (state, country, city, region)
2. Demographic (age, sex, occupation, education, income, and race)
3. Psychographic (personality and lifestyle)
B. buying situations:
1. desired benefits (product features)
2. usage (rate of use)
3. buying conditions (time available and product purpose)
4. awareness of buying intention (familiarity of product and willingness to
buy)
select segments or segments to target
Develop a marketing plan integrating product, price, distribution, and
promotion.

CONSIDERING STRENGTHS AND WEAKNESSES:

It is important for the entrepreneur to consider
strengths and weaknesses in the target market.

ESTABLISHING GOALS AND OBJECTIVES:

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Before any marketing strategy decisions can be outlined, the entrepreneur

must established realistic and specific goals and objectives. These marketing
goals and objectives respond to the questions where do we want to go and
should specify things such as market share, profit, sales, market penetration,
number of distributors, awareness level, new product launching, pricing policy,
sales promotion, and advertising support.
All the preceding goals and
objectives are quantifiable and can
be measured for control purposes.
However, not all goals and
objectives must be quantified. It is
possible for a firm to established
such goals or objectives as:
research customer attitudes toward a product, set up a sales training program,
improve packaging, change name of a product, or find new distributor. It is a good
idea to limit the number of goals or objectives. too many goals make control and
monitoring difficult. Obviously, these goals should represent key areas to ensure
marketing success.

DEFINING MARKETING STRATEGY AND ACTION PROGRAMS:

Once the marketing goals and objectives have been established, the
entrepreneur can begin to develop the
marketing strategy and action plan to achieve
them. These strategy and action decisions
respond to the question how do we get
there

PRODUCT OR SERVICE
This element of the marketing mix indicates a description of the product or
service to be marketed in the new venture. This
product or service definition may consider more
than the physical characteristics. For example:
every product is more than its physical
components. It involves packaging, the brand
name, price, warranty, image, service, delivery
time, features, style and even the website that will be seen by the customers.
When considering market strategy, the entrepreneur will need to consider all or
some of these issues, keeping in mind the goal of satisfying customer needs.

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PRICING
Prior to setting the price, the entrepreneur,
in the majority of situations will need to consider
three important elements: cost, margins and mark
ups, and competition.
COSTS
One of the important initial considerations in any pricing decisions is to ascertain
the costs directly related to the product or service. For a manufacturer, this will
involve the determining the materials and cost inherent in the production of the
product. For a no manufacturer, such as clothing retailer, this would involve the
determining of the cost of the goods from the suppliers. For a service venture, there
are no manufacturing costs or costs of goods such as those that exist for a clothing
retailer. Instead, the service ventures costs relate entirely to labor and overhead
expenses.
Whether a manufacturer, retailer or service venture, the entrepreneur would need
to ascertain the approximate costs for overhead. Some examples would be utilities,
rent, promotion, insurance and salaries)
MARKUPS AND MARGINS:
In many industries, such as jewellery, beauty
supplies, furniture and clothing, the retailers of the
products use a standard mark up to price goods in
their stores. The lower mark-up and hence, lower
profit accepted by the entrepreneur. In this case, is
a strategy used to increase demand in the short
term (market penetration strategy) but could influence the competition to also lower
its price, thus, eventually reducing the profit margins
for everyone.
COMPETITION:
Often, when the products cannot be easily
differentiated, the entrepreneur is forced to charge
the same price as the competition.
For those situations where the product or service is unique in the
marketplace, the entrepreneur has more flexibility and should have a clear
understanding of the inherent costs. The important thing to remember is that there is
a total cost and profit margins to get the final price. Changing one of these items will
impact the other two factors in some manner.

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DISTRIBUTION:
This factor provides utility to the customers; that is to make a product
convenient to purchase when it is needed. This variable must also be consistent with
other marketing mix variables. Thus, a high quality product will not only carry a high
price but should also be distributed in outlets that have quality image
Channel of distribution strategy: If the
market for a new venture is highly concentrated,
such as a major metropolitan area, the
entrepreneur may consider direct sales to the
customer or to a retailer rather than using a
wholesaler. If the market is dispersed across a
wide geographic area, the cost of direct sales
may be prohibitive and the use of a longer
channel with wholesalers and retailers may be
necessary
Attributes of the product also affect the channel decision. If the product is very
expensive, perishable or bulky, a more direct channel would make sense because
the costs of handling and shipping would drive the cost up to prohibitive level.
Middlemen such as wholesalers and retailers can add important value to the
product. Their cost for providing this benefits are much lower than the cost for a
small, single product start up because they operate with economies of scale by
representing many other businesses. They can provide functions such as storage,
delivery, a sales staff, promotion or advertising, and maintenance that would not be
feasible for a start-up venture. Middlemen also have important experience in the
marketplace that can support and assist entrepreneur in his/her marketing strategy.
PROMOTION:
It is usually necessary for the entrepreneur to inform potential customers
about the products availability or to educate the consumer, using the advertising
media such as print, radio or television. Usually television is too expensive unless
the entrepreneur considers cable television a viable outlet. A local service or retail
company may find that using community cable station is the most cost effective
method to reach customer. Larger markets can be reached using the internet, direct
mail, trade magazines, or newspapers. The entrepreneur should carefully evaluate
each alternative medium. Considering not just the cost but the effectiveness of the
medium in meeting the market objectives mentioned in the marketing plan.
Sometimes, the entrepreneur has to be creative with the existing budget and
cost of buying major media or space time.

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MARKETING STRATEGY: CONSUMER VERSUS BUSINESS-TO-BUSINESS

MARKETS
Marketing strategy decisions for a consumer product may be very different
from the decisions for a business to business product. In business to business
markets, the entrepreneur sells the product or service to another business that uses
the product or service as part of its operations. In marketing consumers, the
company uses direct mail and the internet to businesses it uses its own sales force.
The consumer marketing effort however, does support the business marketing effort
since the advertising and promotions will be seen by both markets. Consumer
markets involve sales to households for personal consumptions. Food, beverages,
household products, furniture would be a few examples.
Usually, business to business marketing
strategy involves a more direct channel of
distribution because of the volume of each
transaction and the need to relate product
knowledge to business buyers. Advertising and
promotion for the business to business market
involve more trade magazine advertising, direct
sales, and trade shows. For a start-up venture,
attendance at a trade show can be one of the
most effective means to reach many potential buyers in one location. At trade shows,
it is important to distribute material on the ventures products and services and to
keep a log of all interested visitors to the trade show booth.
Overall, the marketing mix for the consumer or business markets is the same.
However, the techniques and strategies within the mix of these factors will often vary
significantly
All these marketing mix variables will be described in detail in the marketing
strategy or action plan sections of the marketing plan. As indicated earlier, it is
important that the marketing strategy and action programs be specific and detailed
enough to guide the entrepreneur through the years.
BUDGETING THE MARKETING STRATEGY:
Effective planning decisions must also
consider the costs involved in the implementation
of these decisions. If the entrepreneur has follow
the procedures of detailing the strategies and
action programs to meet the desired goals and
objectives costs. Should be reasonably clear. If
assumptions necessary they should be clearly stated so that anyone else who
revised the written marketing plan. This budgeting of marketing action and strategy
decisions will also be useful in preparing the financial plan.
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IMPLEMENTATION OF THE MARKET PLAN:

The marketing plan is the meant to be a
commitment by the entrepreneur to a specific strategy
that it is not a formality that serves as a superficial
document to outside financial supporters or suppliers
that it is meant to be a formal vehicle for answering
questions earlier. And a commitment to make
adjustment as needed or dictate by market conditions.
Someone in the venture should be assign the responsibility of coordinating and
implementing the plan.
MONITORING THE PROGRESS OF MARKETING THE ACTIONS:
Generally, monitoring of that plan that
involves tracking the specific results of the
marketing effort. Sales data by the product,
territory, sales rep, and outlet. Are few of the
specific results that should be monitored. What is
monitored is dependent on the specific goals and
objectives outlined earlier in the marketing plan.
That any weak signals from the monitoring process will provide the entrepreneur
with the opportunity to redirect or modify the existing marketing effort to allow the
firm to achieve its initial goals and objectives. In addition to monitoring the progress
of the existing plan, the entrepreneur should also be prepared for contingencies.
Adjustments in the marketing actions are usually minor if the plan is effectively
developed And implemented. If the entrepreneur is constantly faced with significant
changes with the marketing strategy, then it is likely the plan is not prepared properly.
Weaknesses in the market planning are usually the result of poor analysis of the
market of the competitive strategy, unrealistic goals and objectives, are poor
implementation of the outlined plan action. There are also acts of god such as
weather or war that can affect the marketing plan. it is usually difficult to predict but
maybe considered in a contingency plan.

SUMMARY:
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The marketing plan entails number of major steps. First, it is important to

conduct a situation analyses to assess the question, where have we been? Market
segments must be defined and opportunities identified. This will help the
entrepreneur determine a profile of a customer that goals and objectives must be
established that these goals and objectives must be realistic and detailed. Next, the
marketing strategy and action program must be defined. Again, this should be
detailed so that the entrepreneur clearly understands how the venture is going to get
where it wants to go.
The marketing strategy section or action plan describes how to achieve the
goals and objectives already defined.
There may be alternative marketing
approaches that could be uses to
defined goals. The use of creative
strategies such as internet marketing
may give the entrepreneur a more
effective entry into the market. The
action programs should be also
assigned to someone to ensure their implementation. If the plan has been detailed,
the entrepreneur should be able to assign some costs and budgets for implementing
the marketing plan. During the year, the market signals will provide the entrepreneur
with the opportunity to modify the plan or develop a contingency plan.
Careful scrutiny of the marketing plan can enhance its success. However,
many plans fail, not because of poor management or poor product but because the
plan was not specific or had an inadequate situation analysis, unrealistic goals, or
did not anticipate competitive moves, product deficiencies and acts of god.

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Grading Sheet

Hard Copy

30% x _____ = _____

Power Point

25% x _____ = _____

CD

10% x _____ = _____

Presentation Skill

(35%)

Karla Joyosa

35% x _____ = _____

James Estropia

35% x _____ = _____

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