274 Planning and Forecasting
where their product fits or where they would like to position it, because this
position determines the other aspects of the marketing plan.
Product/Service Strategy
Building from the target market strategy, this section of the plan describes
how your product is differentiated from the competition. Discuss why cus-
tomers will switch to your product and how you will retain them so that they
don’t switch to your competition in the future. Using the attributes defined in
your customer profile matrix, a powerful visual is a product attribute map
showing how your firm compares to the competition. It is best to focus on the
two most important attributes, one on the x-axis and the other on the y-axis.
The map should show that your product is clearly distinguishable from your
competition on desirable attributes (see Exhibit 9.8).
This section should also address how you will service the customer. What
type of technical support will you provide? Will you offer warranties? What
kind of product upgrades will be available and when? It is important to detail
all these efforts and account for each in the pricing of the product. Entrepre-
neurs frequently underestimate the costs of these services, which leads to a
drain on cash f low and can ultimately lead to bankruptcy.
Pricing Strategy
Determining how to price your product is always difficult. The two primary
approaches are the “cost-plus” approach and the “market demand ” approach. I
advise entrepreneurs to avoid cost-plus pricing for a number of reasons. First,
it is difficult to accurately determine your actual cost, especially if this is a
new venture with a limited history. New ventures consistently underestimate
the true cost of developing their products. For example, how much did it really
EXHIBIT 9.8 Competitive map for PurePlay Golf.
IntelliGolfInforetechPurePlayultraCaddieLow HighHighAvailability to consumersTechnology/functionality