170 ENTREPRENEURSHIP
Market Analysis. This section describes the actual marketing strategy of the firm or
new venture. This strategy must be consistent with the objectives stated earlier. The mar-
keting section explains how the firm will exploit its resource base to create a total mar-
keting focus. It also describes how the new venture connects with its customers.- Overall Concept and Orientation: The description of the venture’s concept in the
background section can be given a marketing focus by transforming it into a state-
ment of customer orientation. What benefits and positive outcomes will the cus-
tomer derive from interaction with the firm? Evaluate the resources that the firm or
new venture has or can control in creating high levels of customer awareness and
satisfaction. This introduction demonstrates a commitment to the marketing effort. - Marketing Strategy: This brief description of the primary product or service’s
P/M/T along with that of the major competitors can show how marketing strategy
will support the product or service’s strengths and exploit competitors’ weaknesses.
Identifying the target market and using data from market research demonstrates
why the company is competing in this particular segment. Why and how does its
product appeal to this segment? How does the marketing strategy communicate and
activate this appeal? What image does the firm want to adopt? Is this image consis-
tent with the product or service? Why will it appeal to customers? How will the
image be communicated? That is, what are the plans for packaging, branding, and
labeling the product? What advertising, promotional activities, and campaigns are
proposed? This also requires a budget and a breakdown of marketing costs (usually
in dollars per 1,000 people reached). Advertising materials (copy, storyboards, and
photographs), if available, are included in an appendix. - Pricing: Here the plan discusses pricing strategy. How do the company’s prices
compare with the competition’s? Is the pricing strategy consistent with the firm’s
image? Does it create value for customers? What is the profit margin per unit under
various pricing schemes? What is the credit policy and is it consistent with purchas-
ing patterns in the industry? What is the warranty policy? What about service after
the sale? How will the company create and foster ongoing relationships with buy-
ers and encourage repeat business? - Distribution: How will the product or service be distributed? Include a description
of the geographic scope and the channels of distribution.
Sales Forecasts. The sales forecast is derived from three elements of market analysis: (1)
the size of the market in units and dollars, (2) the fraction of that market that the firm
can capture through its marketing efforts (market penetration rate), and (3) the pricing
strategy.
Sales forecasts are often best presented in an exhibit or chart. They can be shown as
units of products (or number of services delivered) as well as in dollars. The entrepre-
neur multiplies product units by predicted average price (and offers the justification for
this price). Using a five-year time frame, the plan presents a best case, most likely case,
and worst case scenario. What separates the best, most likely, and worst cases? A graph
can illustrate sales trends and growth.Financial Plans. The sales forecasts conclude the marketing portion of the business plan
and begin the financial analysis portion; they represent the “top line.” The purpose of