| | marketing issues in business planning seppo mönkkönen m.sc agric., senior lecturer in...
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Marketing issues in business planning
Seppo Mönkkönen
M.Sc Agric.,Senior Lecturer in Business EconomicsSavonia University of Applied Sciences
Iisalmi, Finland
Innotools 14th April 2008
© Savonia University of Applied Sciences
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What is Business plan?
• A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals.
• The business goals may be for-profit or non-profit. For-profit business plans typically focus on financial goals. Non-profit and government agency business plans tend to focus on service goals
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Internally or externally focused BP
• Externally focused plans target goals that are important to external stakeholders
• Internally focused business plans target intermediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organization
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Content of a business plan
EXAMPLE
• 1 Executive Summary
• 2 Organizational Background
• 3 Marketing Plan
• 4 Operational Plan
• 5 Financial Plan
• 6 Risk analysis
• 7 Decision Making Criteria
• There is no fixed content for a business plan
• Rather the content and format of the business plan is determined by the goals and audience
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Marketing Plan
Two aspects:
1 Understand markets and customers behaviorPoint 1 Diffusion of innovationsPoint 2 Producut life cycle (PLC)Point 3 Market Segmentation
2 Marketing actions (Four P´s)ProductPricePlacePromotion
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Diffusion of innovations
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Cumulative diffusion of innovations
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Product life cycle
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• Market introduction stage » cost high » sales volume low » no/little competition - competitive manufacturers
watch for acceptance/segment growth losses » demand has to be created » customers have to be prompted to try the product
• Growth stage » costs reduced due to economies of scale » sales volume increases significantly » profitability » public awareness » competition begins to increase with a few new
players in establishing market » prices to maximize market share
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• Mature stage » Costs are very low as you are well established in market &
no need for publicity. » sales volume peaks » increase in competitive offerings » prices tend to drop due to the proliferation of competing
products » brand differentiation, feature diversification, as each player
seeks to differentiate from competition with "how much product" is offered
» Industrial profits go down • Decline or Stability stage
» costs become counter-optimal » sales volume decline or stabilize » prices, profitability diminish » profit becomes more a challenge of production/distribution
efficiency than increased sales
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Market Segmentation
• A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs
• A true market segment meets all of the following criteria:
1. it is distinct from other segments (heterogeneity across segments)
2. it is homogeneous within the segment (exhibits common attributes)
3. it responds similarly to a market stimuli
4. it can be reached by a market intervention
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EXAMPLE
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Three possible strategies after market sementation
1. No segmentation in marketing
=> Same marketing to everybody
2. Concentrated marketing
=> Marketing for only one segment
3. Segmented marketing
=> Different marketing for different segment
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