VENTURE NEW MANAGEMENT
AGENDA FOUR
RESEARCH
Group Meeting
Group Meeting
Market Data for Each Project
Revenue Estimation (using the Hotel Rates / Restaurant turnover)
Population (Traffic) during the season
Proximity:
Hotel Landscape (# Rooms. OR, ADRs)
Next Week: Market Plan -Presentation
Capital Raising - discussions/ Projections
INTRO:
I: Information is Power - Show the hand behind the back
N: See the Need David Thomas opened the first Wendys restaurant because he saw
an unfilled need in the marketplace. Thus, he started with Market Orientation
I like a hamburger with mustard, pickle, and onion, and you didnt have a choice at
McDonalds or Burger King. I thought I want that not what they give me
let Customers select their own condiments 256 possibilities. fresh Hamburger Vs
patties.
Sold the 4 KFCs and started his won brand Wendy using his daughters nickname
He started when McDonalds had 1,300 restaurants - he had two restaurants sold his
first Franchise for $5,000 Today Wendys Restaurants number 5,000.
The Need to market the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to create exchanges that
satisfy individual and organizational objectives.
T: Agenda for Today
R: Range of tools for putting the Marketing Plan
O: Know how to develop a marketing Plan
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Lecture
Information is Power
1. Market Opportunities and Marketing Strategy (Chapter 3 p71
Researching your Market
The purpose of market research is to provide relevant data that will help solve marketing
problems a business will encounter. This is absolutely necessary in the start-up phase.
Conducting thorough market surveys is the foundation of any successful business. In fact,
market strategies would be impossible to develop without market research.
Conducting market research Methods:
Historical (trends)
Experimental
Observational (Know about the industry 0 Word of mouth)
Survey method (Ask the need of the Customer)
Two types of data:
Primary Research (exploratory and specific)
Exploratory research is open-ended in nature; helps you define a
specific problem; and usually involves detailed, unstructured interviews
in which lengthy answers are solicited from a small group of respondents
Specific research is broader in scope and is used to solve a problem that
exploratory research has identified. Interviews are structured and formal
in approach. Of the two, specific research is more expensive.
Surveys (Direct Mail, Phone, Personal Interviews)
Info from the owner / Lawyers / Franchisor
Secondary Research
Public (Most Economical)
Commercial (useful - subscription
Educational (Colleges- universities)
Marketing Strategy:
Market Segmentation (identifying specific segments within the market
(location, format, etc)
Product Differentiation (creating an identity for your service that
separates it from your competitors)
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2.
Marketing Management: Create a Marketing Plan
MARKETING PLAN - Researching for Information
4 concepts need to be on your Market Plan:
1.
2.
3.
4.
Analyze the Environment situation / market opportunity
Develop Marketing Objective
Formulate Marketing Strategy
Create an Action Plan
See below Agenda 5 (next week to go over the details)
The Benefits of a Marketing Plan
A marketing plan, on the other hand, is plump with meaning. It provides you with several major
benefits. Let's review them.
Rallying point: SHOW EXCITEMENT Your marketing plan gives your troops something to
rally behind. You want them to feel confident that the captain of the vessel has the charts in order,
knows how to run the ship, and has a port of destination in mind. Companies often undervalue the
impact of a "marketing plan" on their own people, who want to feel part of a team engaged in an
exciting and complicated joint endeavor. I f you want your investors/partenrs to feel committed to
your investment/opportuity, it's important to share with them your vision of where the company is
headed in the years to come. People don't always understand financial projections, but they can
get excited about a well-written and well-thought-out marketing plan .
Chart to success: NEED A PLAN WASTE OF TIME? We all know that plans are
imperfect things. How can you possibly know what's going to happen 12 months or five years
from now? Isn't putting together a marketing plan an exercise in futility . . . a waste of time better
spent meeting with customers or fine-tuning production? Yes, possibly but only in the narrowest
sense. If you don't plan, you're doomed, and an inaccurate plan is far better than no plan at all . To
stay with our sea captain analogy, it's better to be 5 or even 10 degrees off your destination port
than to have no destination in mind at all. The point of sailing, after all, is to get somewhere, and
without a marketing plan, you'll wander the seas aimlessly, sometimes finding dry land but more
often than not floundering in a vast ocean. Sea captains without a chart are rarely remembered for
discovering anything but the ocean floor.
Captured thinking: You don't allow your financial people to keep their numbers in their
heads. Financial reports are the lifeblood of the numbers side of any business, no matter what
size. It should be no different with marketing. Your written document lays out your game plan. If
people leave, if new people arrive, if memories falter, if events bring pressure to alter the givens,
the information in the written marketing plan stays intact to remind you of what you'd agreed on.
Top-level reflection: In the daily hurly-burly of competitive business, it's hard to turn your
attention to the big picture, especially those parts that aren't directly related to the daily
operations. You need to take time periodically to really think about your business--whether it's
providing you and your employees with what you want, whether there aren't some innovative
wrinkles you can add, whether you're getting all you can out of your products, your sales staff and
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your markets. Writing your marketing plan is the best time to do this high-level thinking. Some
companies send their top marketing people away to a retreat. Others go to the home of a
principal. Some do marketing plan development at a local motel, away from phones and fax
machines, so they can devote themselves solely to thinking hard and drawing the most accurate
sketches they can of the immediate future of the business.
Researching Your Market
The purpose of market research is to provide relevant data that will help solve marketing
problems a business will encounter. This is absolutely necessary in the start-up phase . Conducting
thorough market surveys is the foundation of any successful business. In fact, strategies such as
market segmentation (identifying specific segments within a market) and product differentiation
(creating an identity for your product or service that separates it from your competitors') would be
impossible to develop without market research.
Whether you're conducting market research using the historical, experimental, observational or
survey method, you'll be gathering two types of data. The first will be "primary" information that
you will compile yourself or hire someone to gather. Most information, however, will be
"secondary," or already compiled and organized for you. Reports and studies done by government
agencies, trade associations, or other businesses within your industry are examples of the latter.
Search for them, and take advantage of them.
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Market Research
Library
o Science, Industry and Business Library (34th Street and Madison)
o U.S. Small Business Administration (26 Federal Plaza, Suite 3100)
From Database Terminals:
o MarketResearch.com
o ABI Inform
o Hoovers Online
o Lexis-Nexis
o Bloomberg
o Statistical Universe
o STAT-USA
o Edgar Scan
o Datastream
o Dow-Jones Interactive
o Colaritas.com
Search Engines:
o Google.com
o Metacrawler.com
o Mamma.com
o Dogpile.com
o Yahoo.com
o DMOZ.com
o Looksmart.com
o About.com
Recommended Sites:
o Sec.gov (Competitive and Benchmarking data)
o Ccensus.gov (U.S. Census)
o Salary.com (free salary benchmarking)
o Houseandhome.msn.com (info on Neighborhoods given a zip code)
o www.homeadvisor.com (demographic data)
o Marketsource.com (trade organization database)
o Demographics.com (U.S. demographics data)
o USPS.gov (zip code lookup tool)
o State.NY.US (new York State information including business related data)
o Bigcharts (company info and interactive chart making tool)
o MBAPLan.com (go to: Resources/Research Resources)
o YP.Yahoo.com (Yellow Pages directory of businesses)
o Google News & Resources (google.com/news/ Links to news sites)
o Citidex.com (find the Zip Code from a map)
The Ingredients of a Marketing Plan
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Every how-to book on the market has a different take on the essential elements of a marketing
plan. Those geared toward the big corporate crowd communicate in a language few human beings
understand. However, the words you use are much less important than how seriously you
approach the task.
This section outlines the key elements you need to include in your marketing plan. No matter how
it's ultimately organized, your marketing plan should be a straightforward, easily understood
company document. It should provide you with a clear direction for your marketing efforts
for the coming year, and it should give an incisive look into your company for all readers .
Preparing to Write
Before you begin to write, pull together some information you'll need. Getting the information
first avoids interruptions in the thinking and writing process. Have on hand:
Your investment's latest financial reports (profit and loss, operating budgets and so on)
and latest sales figures by product and region for the current and the past three years or, if
less, for however long you've been in business.
A listing of each product or service in the current line, along with target markets
Your understanding of your marketplace: your competitors, geographical
boundaries, types of customers you sell to, existing distribution channels, latest and
most useful demographic data, any information on trends in your markets (both
demographic and product-related)
Ask each of your salespeople and/or customer-relations people to list the most crucial
points, in their opinion, that need to be included in the coming year's marketing plan. You
don't have to include all of them, but you do have to take them into account.
Market plan start with the first and complete with 2 and 3
1. Market Situation
The "market situation" section should contain your best and most clear-headed description of
the current state of the (this marketplace is no place for hunches).
1.
2.
3.
4.
5.
What are your products/services or product/service lines?
What is the dollar size of your markets?
What is your sales and distribution setup?
What geographic area do you sell to?
Describe your audience in terms of population, demographics, income levels and so
on.
6. What competitors exist in this marketplace?
7. Historically, how well have your products sold?
Explain next week in detail
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Much of this information exists in the heads of the management team, the way it is at many
companies. But now is when you write it down. For example, how much information do you have
in your officeright nowon your competition? A marketing plan gives you a chance to pull all
this relevant information together in one place, to spur ideas and justify actions.
Consider each of your products or services up against the matching products or services of your
competitors. How well do you stack up? Is there any significant market opportunity for you that
neither you nor your competitors are currently exploiting?
You'll also find that the best thinkers in your company may well have different ideas about
elements of the current situation. Your marketing plan will provide a good arena to test different
snapshots of the market against each other.
S W O T Analysis
Threats and Opportunities
This section is an extension of the "market situation" section, and it should focus on the bad and
good implications of the current market:
What trends in the marketplace are against you?
Are there competitive trends that are ominous?
Are your current products poised to succeed in the market as it now exists?
What trends in the marketplace favor you?
Are there competitive trends working to your benefit?
Are the demographics of your market in your favor? Against you?
There are lots of places to go to get information on the trends in your market. City and state
business publications frequently publish overview issues; you can talk to local business reporters;
and local chambers of commerce publish projections, as do associations of manufacturers (the
names are different in various parts of the country). Talk to your professional association and read
your trade journals.
Here's an example of what a threats and opportunities section would look like for the Sumners
and Associates firm:
Threats:
Examples
Opportunities:
1. The local economy continues to be strong, and we believe our typical clients
will continue to flourish in this growth cycle.
2. Marketing Objectives
In the "marketing objectives" section, you paint your picture of the future: What marketing
objectives do you want to achieve over the course of the plan? Each of your marketing objectives
should include both a narrative description of what you intend to accomplish along with numbers
to give you something concrete to aim for . Just to say you want to make a first entry into the
Swiss screw machine marketplace isnt providing much guidance. Saying you want to go from 0
percent to 8 percent of the local market in two years is easier to understandand verifiable. If
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you're not sure of the size of the local market, then aim at a dollar figure in sales. Your accountant
will let you know whether you've succeeded or not.
3. Goal For It BACK TO THE NUMBERS
If you're new to the marketing plan racket, how do you set a quantifiable goal? Start with your
past. Review your past sales numbers, your growth over the years in different markets, the
size of typical new customers, and how new product introductions have fared . If over the last
five years you've grown a cumulative 80 percent in gross revenues, projecting a 20 percent to 25
percent increase in the next year is reasonable; 45 percent is not. Make a low but reasonable
projection for what youll be able to accomplish with marketing support toward your new
marketing objectives. Set modest goals to start, until you get a feel for the terrain.
You should make it a point to limit the number of marketing objectives you take on in a given
year. Let's face it, change can bring stress, disorient staff and sometimes even confuse your target
market. Keep your objectives challenging but achievable. Better to motivate yourself with
ambitious but worthy targets than to depress yourself by failing at too many enthusiastic goals.
Here are some typical marketing objective categories:
Introduce new products
Extend or regain market for existing product
Enter new territories for the company
Boost sales in a particular product, market or price range. Where will this business come
from? Be specific.
Cross-sell (or bundle) one product with another
Enter into long-term contracts with desirable clients
Raise prices without cutting into sales figures
Refine a product
Enhance manufacturing/product delivery
This third section of your plan should include perhaps a half dozen such objectives, spelled out
with specific goals. Some examples:
To repeat, make your objectives simple, concrete, countable, ambitious and achievable.
3 (Continued). Marketing Goals: Where The Details Start
Here's where you come down out of the clouds and spell out how you're going to make things
happen. While your spreadsheet has shown increasingly stunning profits each time you bump up
the market gains, now you're in the real world. Gains must be earned by marketing brains and
brawn.
Each marketing objective should have several goals (subsets of objectives) and tactics for
achieving those goals. In the objectives section of your marketing plan, you focus on the "what"
and the "why" of the marketing tasks for the year ahead. In the implementation section, you focus
on the practical, sweat-and-calluses areas of who, where, when and how. This is life in the
marketing trenches.
When Eisenhower and the Allies decided to invade Normandy in 1944 to open up a mainland
Europe offensive against the Axis powers, they developed detailed plans for victory. While
successfully landing in Normandy and holding it were the overall objectives, many intermediate
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goals were set to make this possible: lining up the needed boats, air cover, behind-the-lines
paratrooper drops to cut off communications, feints at a Calais landing to fool the enemy and so
on. And, of course, each of those steps had its own list of details.
The key task is to take each objective and lay out the steps you intend to take to reach it. As an
example, let's take the first marketing objective mentioned
Objective: Give an Example
You get the idea. If your objective is to build a business for example , you have to put together
concrete goals to make it happen. Each of these actions makes sense. You might come up with
others (there's no limit to human creativity, after allespecially in marketing). The point is that
each goal should consist of concrete actions.
Controls: Tracking Effectiveness - GET FEEDBACK AND ADJUST THE PLAN
To track progress on your marketing plan throughout the year, establish a regular schedule of
meetings, and spell this out in writing. How will you make adjustments to your plan midstream?
How will you monitor progress in sales/costs to make changes during the year? You can't leave
yourself without this capability.
The reason you pick measurable marketing objectives is to have the ability to track your progress
toward reaching them. Too many marketing efforts aren't quantifiable, with the result that the
achievements of your marketing campaigns aren't satisfactory, or they're just plain illusory.
All your marketing efforts will benefit from the classic feedback loop: Act, observe, adjust, act
again. Scheduling quarterly meetings is best. At these meetings, responsible individuals should
report on what they've accomplished in the last quarter, including how much of the budget has
been spent. Reports should be verbal, with a printed summary for the record.
As your activities move forward over time, you'll doubtless find the need to adjust the timing, the
budget or the tasks themselves. At these points you must decide whether to intensify your efforts,
add more tactical steps to pick up the pace, or scale back your objectives. Make your changes in
an organized manner, adjusting all the dependent tasks so that the plan shifts as a whole.
Whatever your decision, make sure to update your marketing plan document. Put in writing your
understanding of why you didn't reach your goals. Keep the original, and date and number all
changes. Your plan must be dynamic, but it shouldn't lose its sense of history. All this
information will be extremely useful when you create next year's marketing plan.
Setting Marketing Objectives / Action Plan
what does someone have to know about your plan to have any sense of it?
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This summary gives plan readers a concise description of what your company plans to do in the
coming year. It also forces you to boil your thoughts down to their rich and flavorful essence,
which is always a good thing.
Here's a sample marketing plan summary:
5. We review the existing competitive marketing situation. Overall, prospects look
good for our company. Tourism is growing at a steady 4.2 percent rate. No
competitive hotel property made significant marketing efforts, although XYZ
Hotel did run a series of advertisements in the business section of the
marke..
6. In the long term, we'll explore the possibilities of opening another Hotel in the
city. Over the next two to four years, we anticipate maintaining our historical
growth of 5 percent to 7 percent per year. Toward the end of that period, we'll
hire at least one other employee and consider expanding our leased space.
Your plan must address two different time frames:
Short-term (one to 12 months)
Long-term (over 12 months).
Most of your document should focus on the coming year, which is the most important for the
majority of small and medium-size businesses.
Write this down, briefly and in general terms. Questions you might answer could include: How
many employees do you envision adding over the next few years? Will your need for office space
stay the same? Will there be major equipment purchases? Will you be able to hire a manager? Do
there exist specific training courses or certifications you'd like to put your staff through? Will
your profit margin stay constant, or do you think you'll be able to better it? Will you become
active in local, regional or national trade groups? How will market demographics affect your
business in the coming years? Keep track of how your larger vision changes over time as well.
Next Week
QUIZZ
Creating a Successful Business Plan
The Business Plan as a Selling Document
Reasons for Writing a Business Plan
Researching Your Market
.
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