Key to writing a business plan, product plan, or marcom plan, is the information upon which they are based. There are two types of information, primary and secondary. Primary information is obtained first hand, and typically is very specific to a particular need or question. Secondary information is less current, typically several months to a few years in age; but usually costs much less than primary research.
Typically led by a moderator, with six to dozen people, who typically represent a cross-section of the people who will use the product, i.e. supermarket produce buyers. Good for determining product features (color, size), which market, which reseller. Not good for obtaining pricing information.
Typically less focused, but all of the participants are very much the same, e.g. all are vegetarians. Good for obtaining detailed feedback on specific product features, i.e. what problems occur in buying vegetables, what things could be improved.
One on one, with different classes of users, typically framed by a discussion guide, but open ended. Requires knowledgeable interviewer. Excellent at identifying unexpected information, new vendors, defining range of desired product features. Results while not statistically valid, of tremendous value in defining leading edge products and services.
Question and answer forums. Typically these seminars are pitched as being “educational” or “informative.” For example, you might advertise a seminar on “Dietary Supplements for Vegetarians – How to Choose.” At the seminar, knowledgeable dietitians and vegetarians might speak. Careful note would be taken on the people attending, and the questions asked.
Questionnaire / poll
Either by mail or telephone. Provides statistically valid results if done on large enough, and diverse enough sample. Mail surveys often suffer from low response rates, but provide valid pricing information. Telephone surveys are limited in length. Often difficult to obtain responses from “busy” individuals, skewing results. Selection of the list is of primary importance.
Market Research Firms
There are a wide range of firms providing market research. Some like In-Stat, focus on a particular industry. Others such as Dun & Bradstreet and Gallup, provide research on a wide variety of markets. Often portions of their research will be “published” as a teaser to purchase / subscribe to a particular service.
There are ten of thousands of trade associations, many of which collect information and statistics specific to their industry. Often this information is available for a nominal fee.
For almost any profession, industry, or hobby, there exists either magazines or periodicals that focus on it. Newsletters often exist on topics too narrow to be covered in depth by magazines or newspapers.
The United States Government collects and produces a wide variety of information, from Census information, to maps, to patents. Increasingly, a large amount of this information is being made available on CD-ROM. There are also many commercial organizations who organize this information in more useful forms, and resell it.
A business plan should be written by the people who will execute it. If they can’t write the plan, they will not be able to execute it. A consultant can be profitably used to research portions of a business plan, and to cause it to “speak” with one voice.
- The Concept — The health of and opportunities in the industry.
- Background — The story of the motivation for the business.
- The Company — Explain the current development stage of the product, the benefits offered by the product, long term goals, ownership.
- The Markets — Who will buy; how big is each market; where will revenues come from.
- Competitive Position — Anybody else developing anything like your product? If so, do you have a USP?
- The Management Team — Emphasize previous business ownership and management – and any other experience related to the industry; e.g., audio, digital technology.
- The Future — Give potential investors some idea of the growth opportunities.
- Financials — Develop 2, 3, and 5 year plans; for the 2-year (or 3-year), a proforma Profit and Loss
- Funds Sought — Show specific numbers; indicate use of funds.
Give the name of the business; what is the basic description; what are the objectives; what is the mission statement.
The place of the business within the industry; what is the size and growth rate of the segment of the audio industry.
Actually, define each market, in order of targeting; point out that in some cases (other than consumer) there is no special advertising or education expenses needed yet the market already exists. Explain the size and profile of the audience, with attention to the demographics and geography. Any special trends that may affect the business?
Define carefully any competition – regardless of the media used; evaluate the pros and cons of each organization, but make sure you sound fair and reasonable … and believable … in rating them; how are they perceived by your market; do you have a USP (unique selling proposition) – something you do or are that nobody else offers.
Marketing Plan and Sales Strategy
How are you reaching the customer; what message will you give; what media, if any, to send the message; make sure you can document you’re giving your audience what they want. Describe your sales structure and compensation.
This is where the fundamentals are and where your chance of success lies. How are you going to run the business. Facilities? Production method and cost? New technologies applications? Distribution? Financial controls?
Management and Organization
Principals and key employees: their experience, successes, education, compensation and incentives. Board of directors and advisers committee; consultants and other specialists; key personnel positions to be filled. Management structure and lines of authority.
What is the business’s ultimate destination. Is there an exit plan? Goals and strategies belong here. Milestones that will be used as markets.
First, a two-year, three-year and five-year projections: put in form of financial income / profit and loss statement.
Sources and Use of Funds
This is critical: how much do you want to raise, based on financials above; where will it come from; how are you going to use them?
A product plan is typically written by a product marketing manager. It typically requires interviewing customers and resellers, along with an ongoing dialog with the other departments in the company. Developing a plan for an evolutionary product is straightforward, and is best done internally. Defining a plan for a new product category is challenging and demanding, since there typically is only a “concept” to test, versus a real product. The latter task is often most appropriate for a consultant.
The executive summary briefly summarizes the conclusions of the product plan. It defines the product, describes how it will be sold and supported, and states how it will be positioned against the competition.
Provide a definition of the product. State the need filled by the product.
The Product Definition
- Define what makes the product unique, in what way is it different from anything else on the market?
- What is the value proposition of the product, why would someone want to buy it?
- What requirements must be met to use the product; can it be used in all environments, does it require training to use, et cetera?
- What are the features offered by the product? How do these features compare with competitive products in terms of pricing and implementation?
- Typically there are other products which are offered. Does this product complement the positioning strategy being used for the other products?
- How should this product be priced?
- What service and support requirements does the product have? How should these needs be fulfilled?
- What does a potential customer perceived the value of the product as being? What do they see the ideal product as being? Who are involved in the buying process, and who influence the buying decision?
- Classes of end user
- Profile of likely buyers
- What buyers are most inclined to buy the product?
- Profile of least-likely buyers
- What buyers are least likely to be interested in the product?
- How much, and what type of support needs to be provided to sell the product through different channels, i.e. direct, reseller, two-tier distribution, sales representatives, mail order, et cetera.
- What channel(s) should be used initially, and which channels should be considered in the future?