The term "marketing" is one of the most misunderstood and misused terms in the business world. Many think of marketing as advertising, and while advertising is a part of marketing, the process of marketing encompasses a whole lot more. Marketing is an ongoing process of analyzing the marketplace elements, making decisions about those elements, and then finding the best ways to shift and adjust your marketing strategies to best serve the customer. How to enter the market is one of the most important decisions you will make. Marketing will make or break your venture.
You have already described your products/services and the industry profile in Section III. In this section you will help the reader understand your customer, your competition, and your market potential.
A. Market Analysis
- Customer Analysis - Summarize the key characteristics of the customer you are targeting. Be as specific as possible and include all relevant factors including demographic information (age, gender, income, occupation, etc.), psychographics information (motivation for buying, values, interests, preferences) and lifestyle descriptions (where, how and when they choose to buy). If more than one customer group is targeted, include an explanation of the multiple groups and a justification for choosing them.
- Competitive Analysis - Identify and describe your major competitors. Include where they are located and whether their location is a strength of weakness. Then summarize your competitors' key strengths and weaknesses, including how they are currently performing to meet the needs of the customer. Clearly identify your competitive advantage by discussing the aspects of your business or products/services that are unique and superior to the competition.
- Market Potential - Before describing the market potential, you will first need to describe your actual geographic trade territory, including the boundaries and why you chose this trade area. The Internet has dramatically changed the size of typical trade territories - if you are looking at substantial customers through the Internet, you should describe in detail how you will attract them.
Next describe the size of your market in terms of number of potential customers. Summarize the trends for this market, including whether the market is growing, stable or declining and why.
Now, if you are an existing business, you should describe your current sales volume and your projected ability to grow based on your market potential, including your plans for adding products/services. If you are starting a business, describe the market potential in terms of total potential sales (Annual Sales Volume Projection). Include the calculations and assumptions you used in making the calculations so the reader will understand the basis for your discussion of market potential.
B. Marketing Strategies
- Market Positioning - Summarize your market positioning strategy, including how you will differentiate your product or service from your competition through your marketing efforts. Describe the relationship between price and quality in your products/services. Describe whether or not you are effectively positioned in the market based on the price/quality relationship and that of your competitors. Is your position consistent with your desired image? Explain why or why not.
- Business Location - Write a paragraph explaining your business location and why it was selected. Include the features of the location and the building, including how it is positioned relative to your distribution needs. If there are nearby businesses, describe how they attract or detract from your location. Discuss future needs of your location, and include any visual aids to help the reader understand where you do business.
- Packaging - Explain how your products/services and your business are "packaged." Describe how this packaging will reinforce your image and your other marketing strategies. (Remember, pictures really help the reader, so include a picture of your packaged products or of packaging elements of your services such as your service truck, business cards, etc., in the Appendix section.)
- Promotion - Explain how you intend to use public relations and networking activities to positively influence public opinion about you and your business. Explain how this element fits with the rest of your marketing strategies. Describe the primary advertising tools you will use and why the specific tools were chosen. Address how you approach budgeting for advertising, and how you intend to measure the effectiveness of the advertising tools you chose. Detail any specific advertising events you have planned for the coming year. If you have yet to plan specific events, explain when you will put your promotional calendar together.
- Customer Service - Describe your customer service strategies and how you will implement them. Include customer retention strategies and use of technology in the discussion. Describe how your customer service strategy "fits" with the other promotional strategies and goals.
(Used with permission from the NxLeveL Start-up and Entrepreneurs Workbooks. For more in depth information and personalized assistance, we recommend taking the
NxLeveL course offered through the Idaho SBDC.)