Potential
Market
Worksheet
The
size of the total market should be measured in dollars
of sales per year, but often to get the dollar figure
you first have to estimate the number of potential customers
and their average purchases, and then do some calculations.
You will split the market with competitors, so market
shares become important. Your market share, in turn, will
depend on how you compare to your competitors. .A list
of places to look for figures on the number of customers
available and their estimated spending in your field can
be found on the feasibility worksheet.
What
is your target market?
Worksheet
Your
target market is your primary customers. Many businesses
also draw significant numbers of customers from other
- secondary - market segments. While
these segments may not be your main source (s) of customers,
the total business you could get from these segments can
be very important
Identify
your targeted customers, their characteristics, and their
geographic locations, otherwise known as their demographics.
The
description will be completely different depending on
whether you plan to sell to other businesses or directly
to consumers. If you sell a consumer product, but sell
it through a channel of distributors, wholesalers, and
retailers, you must carefully analyze both the end consumer
and the middleman businesses to which you sell. You may
have more than one customer group. Identify the most important
groups.
Then,
for each customer group, construct what is called a demographic
profile:
Age
Gender
Location
Income level
Social class and occupation
Education
For
business customers, the demographic factors might be:
Industry (or portion of an industry)
Location
Size of firm
Quality, technology, and price preferences
What
is your competition?
Worksheet
To
deal with competition, you must understand who your
competitors are, how they compete, and how you can make
your business different enough to offer more value to
your customers. Your direct competition offer products
and/or services similar to the ones your business sells.
Your indirect competitors offer products and/or services
different from the ones you sell but which to some extent
meet the same needs. (I.e.: video rental and movie theaters)
This was done when you defined your business. The worksheet
is available on the feasibility page.
What
will be your marketing policies?
Worksheet
You
need to establish basic policies in combinations of
pricing, promotion, product quality, and customer service,
and examine how they differentiate your from the competition.
Another important aspect of your marketing policy will
be the kind and level of sales effort to be made. The
method of selling is to some extent determined by the
traditions in your kind of business and to some extent
determined by your own personality and sales motivation.
Answer these questions in the feasibility worksheet,
and sum them up in a paragraph - for your policy.
Niche
Now that you have systematically analyzed your industry,
your product, your customers, and the competition, you
should have a clear picture of where your company fits
into the world. In one short paragraph, define your
niche, your unique corner of the market.
Strategy
Now outline a marketing strategy that is consistent
with your niche.
Promotion
How will you get the word out to customers?
Advertising:
What media, why, and how often? Why this mix and not
some other? Have you identified low-cost methods to
get the most out of your promotional budget? Will you
use methods other than paid advertising, such as trade
shows, catalogs, dealer incentives, word of mouth (how
will you stimulate it?), and network of friends or professionals?
What image do you want to project? How do you want customers
to see you? In addition to advertising, what plans do
you have for graphic image support? This includes things
like logo design, cards and letterhead, brochures, signage,
and interior design (if customers come to your place
of business). Should you have a system to identify repeat
customers and then systematically contact them?
Promotional
Budget
How much will you spend on the items listed above? Before
startup? (These numbers will go into your startup budget.)
Ongoing? (These numbers will go into your operating
plan budget.)
Pricing
Explain your method or methods of setting prices. For
most small businesses, having the lowest price is not
a good policy. It robs you of needed profit margin;
customers may not care as much about price as you think;
and large competitors can under price you anyway. Usually
you will do better to have average prices and compete
on quality and service. Does your pricing strategy fit
with what was revealed in your competitive analysis?
Compare your prices with those of the competition. Are
they higher, lower, the same? Why? How important is
price as a competitive factor? Do your intended customers
really make their purchase decisions mostly on price?
What will be your customer service and credit policies?
Putting
it all together, presenting
your Marketing Plan. .
Marketing
Feasibility Study Worksheets
Next:
Business Plan Operating Plan
