Marketing plays a vital role in successful business ventures. How well the plan you develop markets your business, along with the management and financial management plans, will ultimately determine your degree of success or failure. The key elements of a successful marketing plan are to 1) know your customers -- their likes, dislikes and expectations, and 2) to know your competitors -- their strengths and weaknesses. By identifying these factors, you can develop a marketing strategy that will allow you to arouse and fulfill customers needs, better understand competitors and identify changes in the marketplace that can affect your bottom line. The purpose of the marketing plan is to define your market, i.e., identify your customers and competitors, to outline a strategy for attracting and keeping customers and to identify and anticipate change. Your business will not succeed simply because you want it to succeed. It takes careful planning and a thorough understanding of the marketplace to develop a strategy that will ensure success. Understanding the Marketplace Generally, the first and most important step in understanding the market is to study it through market research. In the case of a franchise, the franchisor has developed a marketing program, so you will need to review the program he or she has provided. Look over the plan to determine what product/service you will offer and write a description of it. Even though a franchisor has described your product or service, it is a good idea to develop and write your own description because this process helps you to know your product or service--a key variable in any successful marketing plan. When describing your product or service outline what you feel are its unique aspects, and explain how or why these aspects will appeal to customers. Emphasize the special features that you feel are its selling points. These features are what you will use to convince customers to purchase your product or service. Next go over sales projections, determining if there is a demand for the product or service. In the case of a franchise, the franchisor will have developed the projections. Study this data to see how he or she arrived at these projections. This will help you to better understand how the marketplace operates relative to your product/service, and it can help you develop the skills necessary to identify and anticipate changes in the marketplace. Start your own file on marketplace trends. Periodically review your data, looking for shifts in the market. If changes are occurring, you should modify the marketing plan to coincide with these changes. In franchise operations, it is customary for the franchisor to update the marketing plan periodically to reflect changes in the marketplace and to keep the marketing program current. A marketing plan should answer these questions: * Is this product or service in constant demand? * How many competitors provide the same product or service? * Can you create a demand for your service or product? * Can you effectively complete in price, quality and delivery? * If a franchise, will the franchisor price the product or service to give you the projected profit? Review your program to ensure that it answers these questions. If your plan doesn't answer the questions, it will need to be modified, or you will need to devise a strategy that will provide a means for answering them. When you are satisfied that you understand the program, how the market operates and how to identify market shifts and trends, start writing the marketing section of your business plan. Even if you adopt a marketing program that has been developed elsewhere, it is your responsibility to promote your product or service by cultivating the marketplace, i.e., attracting and keeping customers. You can accomplish this aim by knowing your market, your customers, your competitors and your product/ service. Don't rely solely on the program provided by a franchisor or others, gather and assess your own data using the techniques outlined in your plan. By gathering and analyzing this information, you will be better able to determine if your program is in line with your competitors, if it is in line with industry averages and what adjustments you can make to improve your overall competitiveness. A sample "Marketing Plan" is attached as part of Appendix I. Study it carefully, then try to develop a similar program for your business plan. MARKET RESEARCH Strategies for Researching the Market Researching your market is perhaps the easiest way to assess it. Market research does not have to be costly, nor does it have to be a complex process. It can be as simple and as easy as surveying a cross-section of your consumers (focus group) to get their opinions about the product or service you will be offering, or conducting a telephone or mail survey. The disadvantages of using the telephone or mail survey method are the individuals you contact may not be interested in responding to a survey. Other market research techniques include analyzing demographic data, such as population growth/decline rate; age range, sex, income/educational level; brainstorming with family and friends, focus group interviews. Whatever method you use, your focus should be on gathering enough information to determine who your potential customers are--their needs, wants and expectations; if there is a demand for your product or service; who your competitors are and how well they are doing. Market research should answer questions such as: * Who are your customers and potential customers? * What kind of people are they? * Where do they live? * Can and will they buy the product or service you're offering? * Are you offering the kinds of goods or services they want -- at the best place, the best time and best amounts? * Are your prices consistent with what the buyers view as the products' values? * Are you applying the promotional programs in a way that will bring about success? * What do customers think of your franchise? * Who are your competitors? * If a franchise, how does your operation compare with the competition? While there are some disadvantages to market research--it's a costly, time-consuming process, builds in biases that distort information, ignores answers or lets arrogance or hostility cut off communications at some point in the marketing process--the advantages, however, outweigh the disadvantages. Don't forego this process or stop halfway because you are not getting the desired results. This may be an indication that you are going into the wrong business or that there isn't a market for your product or service. Don't be discouraged. You simply may need to modify your original plan. A few of the benefits of market research are outlined below. * Learning who your customers are and what they want. * Learning how to reach your customer and how frequently you should try to communicate with them. * Learning which appeals are most effective and which ones aren't. * Learning the relative successes of different marketing strategies in relation to their return on investment. While market research may appear to be a tedious, time-consuming process, it is necessary if you want to be successful. Think of market research as simply a method of finding out what catches customers' attention by observing their actions and drawing conclusions from what you see and as an organized way of finding objective answers to questions every business owner and manager must answer in order to succeed. Market research focuses and organizes marketing information, ensuring that it is timely and that it provides what you need to: * reduce business risks, * spot problems and potential problems in your current market, * identify and profit from sales opportunities, and * get basic facts about your markets to help you make better decisions and set up plans of action. If viewed from this stand point, market research is an invaluable tool that can save you time, effort and money. _________________________________________________________________ SELF-PACED ACTIVITY During this activity you will answer the following questions: * Do you have a marketing plan? Yes___ No___ * If yes, which elements described in pages 1-5 did you NOT include? * Have you conducted any marketing research? * If yes, how and what methods did you use? * If no, why?