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Introduction to Entrepreneurship

Map Your Venture Plan

What Makes You Tick

Take out a piece of paper and write down everything that you like to do.
Include sports, hobbies, and anything else you like.

Business Ventures
List and identify any business ventures you feel that you would like to run. Develop what you might want to include in your Venture.

Venture Partners
Work on your networking skills and walk the class asking you peers what venture they would like to do. If similarities think about maybe a partnership to work on your Venture plan.

Pick your Group

Pick wise.
The next part of the class you are to pick your group that you will create a venture plan. All groups need to be approved by the teacher.

What is a Venture?
A venture is a business that an entrepreneur would like to develop. The process of a venture includes the most important developmental process called the Business Plan.

What is a Business Plan

A business plan is a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and sufficient for the venture to succeed. It is a written explanation of the company's business model.

Business Plan Cont

Business plans are used internally for management and planning and are also used to convince outsiders such as banks or venture capitalists to invest money into a venture.

Business Plan Cont

Business plans are noted for often quickly becoming out of date. One common belief within business circles is that the actual plan may have little value, but what is more important is the process of planning, through which the manager gains a greater understanding of the business and of the options available.

Business Model
Is the way you develop you business practice, how you get your business out there. Example Shop keeper model.
This involves setting up a store in a location where potential customers are likely to be and displaying a product or service.

Go to the following site to see what your business model will be.

Business Plan Cont

A business plan can be seen as a collection of sub-plans including a marketing plan, financial plan, production plan, and human resource plan See the following site to see a example of what a business plan

Business Plans Include the Following

Business Overview Products and Services

Industry Overview
Management and Staffing

Marketing Strategy
Regulatory Issues

Financial Plan Confidentiality and Recognition of Risks

Implementation Plan
Executive Summary

Know Your Business History

History and Background
If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle. - Sun Tzu Art of War

You must know your history and background in order to learn about your industry. Gives you an understanding of potential of your venture and challenges that you might have.

Readers will first want to know about the history of your business. If you have an existing business, briefly describe when and by whom the business was started and any major changes that have occurred in the business. If this is a new business, highlight some of the reasons why you would like to start this specific business.

Group Contract
You have selected your group to work with you must create a contract that all will sign. Must include:
Group expectation. Consequences if expectations are not met. Rules on firing individuals. All group members signatures.

Whats Next
Time to start your VENTURE

Vision and Mission Statement

It is important to have a long-term vision of what you want your business to become. Some businesses use their vision and mission statement to highlight their business strategies and philosophies or to show the importance that their business places on developing good relationships with customers and employees.

Vision Statement
A vision statement describes in graphic terms where the goal-setters want to position themselves in the future. It may describe how they see events unfolding over 10 or 20 years if everything goes exactly as hoped.

Mission Statement
A mission statement resembles a vision statement, but has a more immediate focus. It details what one will do today to attain one's goal, purpose, or mission. Ford's brief but powerful slogan, "Quality is Job 1" could count as a mission statement.

Mission Statement
However, most mission statements involve more detail, often describing who will do what, for whom, how, and why. For example: "Our mission consists of meeting or exceeding the demands of business-computer users by offering a level of service that surpasses anything available in the Tritown area while providing our employees with a stimulating environment in which to grow and providing our shareholders with a return above the industryaverage."

Mission & Vision Statements

Vision statements often appear more graphic and more abstract than mission statements, which tend more to the concrete and the proscriptive. A vision statement "paints a picture" of ideal future outcomes. Vision Statement usually located in main entrance of the companies building.

Mission & Vision Statements

In the 1980s, Bill Gates had a simple vision: "A personal computer on every desk, and every computer running Microsoft software". I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident: that all men are created equal. Martin Luther King

Vision Statement May Include:

clarity and lack of ambiguity painting a vivid picture describing a future memorable and engaging expression realistic aspirations alignment with organizational values and culture subjection to customer needs (in the case of a vision statement for a business organization)

Your Turn
By yourself you are to develop a Vision Statement for your future and a Mission Statement for this class. Use your notes to help with creating a vision and mission statement. Must be typed and handed in. Mark breakdown
Application 10 marks Communication 10 marks Knowledge 10 marks Thinking 10 marks

Objectives list the short to medium term (1 to 5 year) goals of the business. What do you want the business to accomplish? Your objectives should be simple, measurable and realistic. A business plan loses credibility if the objectives are not believable to the reader. Use the S.M.A.R.T. approach

Objectives Cont
You can set objectives for:
desired market position (for example, we want to be the largest repair shop in town), sales (we want sales to increase by 25% over the next twelve months), profitability (we want to improve profitability by 5% in 1997), or any other issue which is important to your business.

Primary Objectives
These are your main goal that you wish to obtain. More focused and direct.

Secondary Objectives
These are objectives that are not as important to meet as the primary objectives. Do demonstrate potential gains that may also be unexpected.

Vision, Mission & Need

Successful Business Opportunity


Unmet Market Need

Business Mission

Objective Examples
1. Establish and maintain a unique position among CD-ROM oriented publications in Canada as the best magazine to consult when wanting information about new or existing CD-ROM products and industry trends. 2. Expand magazine distribution to the remainder of Western Canada and Ontario.

Objectives Examples
3. Increase distribution per issue from current levels of 20,000 copies to 50,000 copies. A bank loan of $100,000 will be obtained to finance the increase in copies, distribution and marketing and ensure a positive cash flow in the first year of operations. 4. Expand the magazine from its current 64 pages to 96 pages per issue by the end of 1997. 5. Position the magazine for an acquisition by a major publisher within the next two years

Your Turn
You are to set five personal objectives that you would like to achieve by the end of the year. With five primary objectives to meet, then develop two secondary objectives.

What business structure are you planning?

With the idea of your venture and your business plan you must decide on organization structure. Are you working alone? With someone? Or with a group? These are all question needed to ask yourself.

Ownership Types
This allows you to understand the potential benefits as well as potential risks that may be present. You must chose smart to be successful.
Example Muslcocity

Business Structure
How you 'structure' your business is important for two reasons:
legal purposes tax purposes

What you choose to do depends a lot on how you manage or run your business AND your financing needs. One final consideration is what your expected tax position at the end of the year will be.

Business Structures
The first structure that you choose may only be temporary.
As your business grows, you may want to change your structure.

Your business can be classified under one of the following business structures and each has its advantages and disadvantages: Sole Proprietorship Partnership Corporation Franchises

Sole Proprietorship
FACT: You are the business. FACT: All profits and losses come directly to you. Characteristics:
owned and operated by one person unlimited personal liability most widely used business structure

Sole Proprietorship
easy to form has the least amount of government intervention very flexible you have complete responsibility and control of the business all income and losses are consolidated on your personal income tax return

UNLIMITED PERSONAL LIABILITY the business ends if the owner quits for any reason you have complete responsibility and control of the business you may have limited ability to raise capital you may have fewer resources and talents to draw from

Proprietorship: A proprietorship is a business owned by one person who is fully responsible for all debts and obligations related to his or her business. A creditor with a claim against a sole proprietor would normally have a right against all of his or her assets, whether business or personal. This is known as unlimited liability.

FACT: A voluntary association of 2 or more people who act as co-owners of the business. FACT:The partners combine their talents to run the company. FACT: Always have a partnership agreement drawn up that spells out the rights and duties of all partners (and their descendants) to help you to avoid headaches later on.

easy to form flexible limited government intervention may be possible tax advantages since your income is taxed as personal income may benefit from having the combined talents and funding of partners

UNLIMITED personal liability of at least one partner may be hard to get large sums of money the actions of one partner can make the entire business liable

Some factors needed for a successful working relationship among partners:
trust willingness to work together and coordinate roles a strong sense of commitment from all partners frequent, clear communication

Partnership: A partnership is a business, not incorporated, in which two or more persons combine their resources. A partnership agreement may specify the capital contributions to be made by each partner, the ratios in which partnership earnings and losses will be distributed, the management responsibilities of the partners, and the partners' rights to transfer or sell their individual interests.

FACT: This is a separate entity formed by filing Articles of Incorporation with your Secretary of State. FACT: You must file a separate business tax return because you and the business are legally separate.

limited personal liability ownership can be transferred through stock sales unlimited life usually it is easier to obtain money should have a larger pool of talent and expertise gives an impression of credibility to potential and current customers

your business activity may be restricted by the charter lack of representation of minority stockholders extensive record keeping may be required organizing expenses to become a corporation can be high double taxation

There are 2 special types of corporations that may be advantageous for smaller companies:
S Corporations limited personal liability pass through income/loss to your personal income more expensive to set up than a sole proprietorship or partnership income is divided among the owners based on their ownership interests

Limited Liability Corporations (LLC) limited personal liability pass through income/loss to your personal income can include more than 35 shareholders profit and loss can be allocated differently than the ownership interests more expensive to set up than a sole proprietorship or partnership.

Nonprofit Corporation
Usually religious, charitable, or educational organizations Most are private in nature

Corporation: A corporation, also known as a Limited Company, is a legal entity which is separate and distinct from its members (shareholders). Each shareholder has limited liability. A creditor with a claim against the assets of the company would normally have no rights against its shareholders, although in certain circumstances shareholders may be held liable.

FACT: the right to own and operate this business is provided by the owner/manufacturer to sell their product.

training and guidance is available there may be brand name appeal often there is a proven track record financial assistance may be available

franchise fees franchisor maintains a fair amount of control promises may not be realized

Questions to Ask Regarding Franchises:

What is the total investment cost? Are there additional royalties or other hidden costs? What is the franchises performance to date? Is there a franchisee available that you can talk with and determine their satisfaction level? Can the business continue if something happens to the owner? Which legal structure should you choose? Can you get additional monies if needed? Will you be able to get the people you need? Will you be able to work under someone else's rules? What are the termination clauses if any? Are there sales quotas that must be met? What government requirements do you need to be aware of?

Your Turn
Think about your business, and identify what type of business you are running and the type ownership you have. Are are some of the advantages and also some disadvantages of you business structure.

Location, Location, Location

In a business you maybe as successful as the location that you pick. Location is not only a factor of success but could be the key factor in longevity of your business.

In industrial markets, customer location may be important in some cases.
Shipping costs may be a purchase factor for vendor selection for products having a high bulk to value ratio, so distance from the vendor may be critical. In some industries firms tend to cluster together geographically and therefore may have similar needs within a region.

Your Business
In your Venture Team you are to do the
following: Create a Vision Statement and Mission Statement Set a list of your objectives for the company should have at least 5 Develop a potential location site. Create a Company name for your Venture.

Unit 3 Marketing Your Ideas

Invention or Innovation
Make a list of ten products and by yourself decide if the product is an innovation or invention. Define the difference between innovation and invention

Invention or Innovation
Select three products and describe the innovation of the products. Create a flow chart detailing your innovation/evolution of your selected products Make sure you have sufficient information of your products innovation Present your best one to the class and handin all 3

Innovation of the Portable Audio

Invention is an object, process or technique which displays an element of novelty. In certain circumstances, legal protection may be granted to an invention by way of a patent

In business and economics, innovation is often divided into four types: Product innovation, which involves the introduction of a new good or service that is substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension Process innovation involves the implementation of a new or significantly improved production or delivery method. Marketing innovation is the development of new marketing methods with improvement in product design or packaging, product promotion or pricing. Organizational innovation involves the creation of new organizations, business practices, or ways of running organizations.

Invention vs. Innovation

While an invention is merely theoretical (even though the legal protection of a patent may have been sought), an innovation is an invention that has been put into practice.

Ways to Find New Ideas

Articles containing local and global trends

Report possible changes Specialty magazines target market

Trade Shows
Show new products to markets

Protecting Your Idea

Intellectual property are rights to protect your ideas/inventions/innovations They consists of the following:
Patents Copyrights Trademarks Industrial Act

A patent is a set of exclusive rights granted by a state to a person for a fixed period of time in exchange for the regulated, public disclosure of certain details of a device, method, process or substance (known as an invention) which is new, inventive and useful.

The exclusive right granted a patentee is the right to prevent others from making, using, or selling the claimed invention, not the right to make, use, or sell the invention themselves. The patentee may have to comply with other laws and regulations to make use of the claimed invention. So, for example, a pharmaceutical company may obtain a patent on a new drug but will be unable to market the drug without regulatory approval.

Copyright is a set of exclusive rights granted by government for a limited time to regulate the use of a particular form, way or manner in which an idea or information is expressed.

Copyright may subsist in a wide range of creative or artistic forms or "works" and subject matter other than works. These include literary works, movies, musical works, sound recordings, paintings, photographs, software, live performances, television or sound broadcasts and in some jurisdictions industrial designs. Copyright is a type of intellectual property; designs or industrial designs may be a separate or overlapping form of intellectual property in some jurisdictions.

It is not designed or intended to cover the actual idea, concepts, facts, styles or techniques which may be embodied in or represented by the copyright work.

Copyright law provides scope for satirical or interpretive works which themselves may be copyright. For example, the copyright which subsists in relation to a Mickey Mouse cartoon prohibits unauthorised parties from distributing copies of the cartoon or creating derivative works which copy or mimic Disneys particular talking mouse, but does not prohibit the creation of artistic works about talking mice in general. Other forms of intellectual property may impose legal restrictions where copyright does not.

A trademark is a distinctive sign of some kind which is used by a business to identify itself and its products and services to consumers, and to set the business and its products or services apart from those of other businesses.

A trademark comprises a name, word, phrase, logo, symbol, design, image, or a combination of one or more of these elements.

The essential function of a trademark is to serve as an exclusive identifier of the commercial source or origin of products or services, such that a trademark, properly called, indicates source or acts as a badge of origin. The use of a trademark in this way is known as trademark use, and a trademark owner seeks to enforce its rights or interests in a trademark by preventing unauthorised trademark use.

Industrial Design Act

An industrial design consists of the creation of a shape, configuration or composition of pattern or color, or combination of pattern and color in three dimensional form containing aesthetic value. An industrial design can be a two- or threedimensional pattern used to produce a product, industrial commodity or handicraft

Marketing: What is it?

To succeed, entrepreneurs must attract and retain a growing base of satisfied customers. Marketing programs, though widely varied, are all aimed at convincing people to try out or keep using particular products or services.

Marketing: What is it?

Business owners should carefully plan their marketing strategies and performance to keep their market presence strong. Marketing is based on the importance of customers to a business and has two important principles:

Marketing: What is it?

1. All company policies and activities should be directed toward satisfying customer needs. 2. Profitable sales volume is more important than maximum sales volume.

Marketing: What is it?

To best use these principles, a small business should:
Determine the needs of their customers through market research Analyze their competitive advantages to develop a market strategy Select specific markets to serve by target marketing Determine how to satisfy customer needs by identifying a market mix

Class Work
For each of the following topics above, research in your text and make notes for each one of them. What is included specific points that should be addressed for each one and every thing else. Work Hard

Marketing Is
Marketing is the process of planning and executing the pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals. American Marketing Association

Marketing Plan
Marketing Plan Includes:
Marketing Research Marketing Strategy Target Market Marketing Mix 5 Ps

Marketing Research
Market research will help you to determine if there is a need. The research does not have to be elaborate and expensive, but you MUST gather information about your market and analyze that information. Know what information you need to gather before you begin researching the market.

Marketing Research
Market research is broader in scope and examines all aspects of a business environment. It asks questions about competitors, market structure, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment.

Marketing Research
Product research - This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop. Advertising research - This attempts to assess the likely impact of an advertising campaign in advance, and also measure the success of a recent campaign.

Marketing Research
Primary Research
The technique of gathering data firsthand through such methods as personal observations, interviews, questionnaires and surveys.

Secondary Research
Information that is gathered by other means, such as Stats Canada (Census data)

Marketing Research
Most common form of Primary data is a survey.
Surveys allow potential consumer behaviors/patterns and allows us to segment the selected market. See Ridge Survey

Marketing Research

Creating A Survey Assignment

With the product advertisement that you have decided to choose from your magazine, prepare the following:
Decide on an advertisement and innovate the product. (Develop a new product line) Create a market research survey.
Professionally typed.

Distribute 10 surveys and analyze the information. Present the findings make sure you use visuals.

Marketing Segmentation

Market Segmentation and Positioning

A market:
people or organizations with needs money to spend willingness to spend it

A target market:
narrow section of the market

Market segmentation
grouping consumers into clusters

Target Market Strategies

1. market aggregation:

Single Marketing Mix

One Aggregate (Mass) Market

Target Market Strategies

2. single-segment segmentation:

A Single Marketing Mix B

Target Market Strategies

3. multiple-segment segmentation:

Mix A Mix B Mix C

Market Segment A Market Segment B Market Segment C

Effective Market Segmentation

The bases of segmentation must be measurable with accessible data Segments must be accessible Segments are large enough to be profitable

How do we segment a market?

First broad segments are business and end consumers Next further define the segment by:
Geographic location Demographics Psychographics Behavioural Product-related

Geographic Segmentation

Geographic Segmentation
Regional distribution: People in a region tend to share values and attitudes Urban, rural, suburban distribution Census Metropolitan Areas (CMA) Suburban growth and back to city
Geodemographic Clustering: using postal codes to cluster segments

Segmenting using Geographics

Geographic Region: Atlantic, Prairies, Ontario, Quebec, BC City or CMA size: Under 25,000 or 25,001 100,000 or 100,001 500,000 Urban or rural Climate: mountainous, seacoast, rainy, cold

Demographic Segmentation
Develop a detailed profile of members from a target segment Easy to observe but can be very simplistic There are differences across segments based on age, gender, family life-cycle stage, education, ethic background, occupation

Segmenting using Demographics

Income: under 10,000; 10,00125,000;25,001-35,000;35,001-50,000;over 50,000 Age: under 6; 6-12;13-19;20-34;35-49;50-64; 65 and over Gender: Family life cycle: Ethnic background: Education: Occupation:

Family Life-cycle

Segmentation by Income
Income has an important influence on how people spend Disposable income vs. discretionary income Many factors contribute to household buying power Spending varies depending on life-cycle stage and income Segmenting by income doesnt necessarily mean targeting the high end consumers

Psychographic & Behavioural Segmentation

Psychographic: Personality depends on individual Lifestyle active, interests in art or politics Social Class upper, middle, lower
Behavioural: Benefits the function they want from the product Usage heavy user, medium user, light user, non-user

Relates to the manipulation of the marketing mix variables to create an image or perception that the company wants to be known for.

Positioning approaches
Head on competition occupy a gap in the market distance a brand from competitors market leadership appeal to a lifestyle niche reposition

Positioning Maps
Positioning Maps help:
see how key players in a market are viewed by consumers helps see competitive clusters and market gaps

Pepsi Taste Test

Drink samples Identify 3 marketing aspects (Branding & Positioning) of each:
Coke Pepsi

Drink Samples

Branding & Tag Lines

What is it? And why do we use it?

What Is Branding?
A Name, term, slogan, symbol, or a combination of these. Used to identify the product of one company and what it does to differentiate it from the competitor.

Branding & Colors

Colors can help determine brand image. Cleveland Browns
Orange & Brown Colors known around the NFL and help establish following.

Dawg Pound

Tag Line
What is a Tag Line?
It is a saying that allows the brand to create an identity. Usually found at the end of the image/advertisement to form a relationship to the product. Reason why its called tag line is b/c it tags along with the brand image.

Companies Tag Lines

Is It In YOU? Just Do It Taste of the New Generation Cant beat the Real Thing Gatorade NIKE Pepsi

Your Turn
Stay in your teams Given 1 chocolate bar
Analyze bar (what the bar means to you and the demographics/Target Market) Create a new Tag Line for the chocolate bar State why the Tag line identifies with the chocolate bar. Hand in paper to me for marks

Hand in
State new Tag Line Explain connection between Tag line and Product Identify Target Market and Demographics

Marketing Mix
The marketing mix is probably the most famous phrase in marketing. The elements are the marketing 'tactics'. Also known as the 'four Ps', the marketing mix elements are price, place, product, and promotion.

Marketing Mix

Marketing Mix
The concept is simple.
Think about another common mix - a cake mix. All cakes contain eggs, milk, flour, and sugar. However, you can alter the final cake by altering the amounts of mix elements contained in it. So for a sweet cake add more sugar! It is the same with the marketing mix.

Marketing Mix
Another way to think about the marketing mix is to use the image of an artisit's palette. The marketer mixs the prime colours (mix elements) in different quantities to deliver a particular final colour. Every hand painted picutre is original in some way, as is every marketing mix. Some commentators will increase the marketing mix to the 'five Ps', to include people

There are many ways to price a product. Let's have a look at some of them and try to understand the best policy/strategy in various situations.


Pricing Strategies
Premium Pricing
Use a high price where there is a uniqueness about the product or service. This approach is used where a a substantial competitive advantage exists. Such high prices are charge for luxuries such as Cunard Cruises, Savoy Hotel rooms, and Concorde flights.

Other Pricing Strategies

Product Bundle Pricing
Here sellers combine several products in the same package. This also serves to move old stock. Videos and CDs are often sold using the bundle approach.

Pricing Strategies
Economy Pricing
This is a no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc.

Pricing Strategies
Price Skimming
Charge a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost, other marketing strategies and pricing approaches are implemented.

Pricing Strategies
Penetration Pricing
The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom in order to attract new corporate clients.

Other Pricing Strategies

Promotional Pricing
Pricing to promote a product is a very common application. There are many examples of promotional pricing including approaches such as BOGOF (Buy One Get One Free).

Other Pricing Strategies

Value Pricing
This approach is used where external factors such as recession or increased competition force companies to provide 'value' products and services to retain sales e.g. value meals at McDonalds.

Place is also know as Channels of Distribution
A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption.

There are six basic 'channel' decisions:
1. Do we use direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a wholesaler) 2. Single or multiple channels 3. Cumulative length of the multiple channels

4. Types of intermediary (see later) 5. Number of intermediaries at each level (e.g. how many retailers in Southern Spain). 6. Which companies as intermediaries to avoid 'intrachannel conflict' (i.e. infighting between local distributors)

Place/Channels of Distribution
Types of Channel Intermediaries.
There are many types of intermediaries such as:
Wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others.

They break down 'bulk' into smaller packages for resale by a retailer. They buy from producers and resell to retailers. They provide storage facilities.
For example, cheese manufacturers seldom wait for their product to mature. They sell on to a wholesaler that will store it and eventually resell to a retailer.

Wholesalers offer reduce the physical contact cost between the producer and consumer e.g. customer service costs, or sales force costs. A wholesaler will often take on the some of the marketing responsibilities.
Many produce their own brochures and use their own telesales operations.

Agents are mainly used in international markets. An agent will typically secure an order for a producer and will take a commission. They do not tend to take title to the goods.
This means that capital is not tied up in goods.

Retailers will have a much stronger personal relationship with the consumer. The retailer will hold several other brands and products.
A consumer will expect to be exposed to many products.

Products and services are promoted and merchandised by the retailer. The retailer will give the final selling price to the product. Retailers often have a strong 'brand' themselves e.g. Ross and Wall-Mart in the USA, and Alisuper, Modelo, and Jumbo in Portugal.

The Internet has a geographically disperse market. The main benefit of the Internet is that niche products reach a wider audience e.g. Scottish Salmon direct from an Inverness fishery. There are low barriers low barriers to entry as set up costs are low.
Use e-commerce technology (for payment, shopping software, etc)

There is a paradigm shift in commerce and consumption which benefits distribution via the Internet

Marketing Plan
Marketing Plan Includes:
Marketing Research Marketing Strategy Target Market Marketing Mix 5 Ps

Customer Needs
The founder of a successful cosmetics firm, when asked what his business did, replied, "In the factories we make perfume and in the shops we sell dreams."

Customer Needs
Business people usually define their business in physical terms. Customers, on the other hand, see businesses as satisfying their needs. Compare a cheap ballpoint pen with a quality fountain pen.
Basically they are very similar: they both write well, are comfortable to hold, and have clips that hold them in place and caps that protect your pockets from ink stains. One costs $1, the other perhaps $100. Customers pay the extra $99 for largely intangible benefits, such as status or the pleasure the pen will bring as a gift. The makers of each pen both have successful businesses, but the needs they satisfy are poles apart.

Customer Needs
Until you have clearly defined the needs of your potential customers, you cannot begin to assemble a product to satisfy them. American psychologist Abraham Maslow says that "all customers are goal seekers who gratify their needs by purchase and consumption." He classifies consumer needs in a five-stage pyramid, called the hierarchy of needs.

Customer Needs
Maslows Hierarchy of Needs

Self-esteem Social needs Safety Physiological needs (hunger and thirst)

Customer Needs
Every product or service is bought to satisfy one or more of these needs. So, for example, as people's hunger and thirst needs are satisfied, they move up the hierarchy to satisfy other needs. Try interesting someone who is starving and cold in "higher" things, or see how much more food you buy if you shop when you are hungry than when you have just consumed a large meal.

Customer Needs
Where are your customers on the needs hierarchy, and how can your product or service help them to achieve their goals?

Writing Up and Presenting Your Business Plan

The above sections are intended to help you assemble the information needed to write up your business plan. The plan will require substantial editing and rewriting; the way in which it is written up will undoubtedly influence the chances of getting a hearing, if you are seeking outside support for your venture. You must also give some thought to how you will handle the meeting with your bank, venture capital firm, or other backers. Presentation skills and good planning will help make a good production, and "showbiz" counts for a surprising amount in the money world.

Writing Up and Presenting Your Business Plan

The following guidelines will help you and your colleagues make the most efficient use of the information in the planning category when constructing your business plan: 1. Do not expect to be told where to find all of the information about your business. You will need to do some research yourself.

Writing Up and Presenting Your Business Plan

2. Do not copy a sample, however good it may sound; use it to help you understand the purpose of that article only. 3. Try to strike a balance between qualitative and quantitative statements in writing up your business plan. That is, try to back up as many of your statements as possible with numbers and documented sources of information. On the other hand, do not include numbers just because you have them; make sure that they really serve a purpose.

Writing Up and Presenting Your Business Plan

4. Finally, before attempting to write up your business plan, make sure the information you have compiled is internally consistent. If you have business partners, make sure you are all in substantive agreement, both at each stage and with the final outcome.

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