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Entrepreneurship

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Entrepreneurship ­ MGT602
VU
Lesson 25
THE MARKETING PLAN
LEARNING OBJECTIVES
1. To understand the differences between business planning, strategy plans, and market planning.
2. To describe the role of marketing research in determining market strategy for the marketing plan.
3. To illustrate an effective and feasible procedure for the entrepreneur to follow in engaging in a
market research study.
4. To define the steps in preparing the marketing plan.
5. To explain the marketing system and its key components.
6. To illustrate different creative strategies that may be used to differentiate or position the new
venture's products or services.
PURPOSE AND TIMING OF THE MARKETING PLAN
The marketing plan establishes how the entrepreneur will effectively compete and operate in the
marketplace. Marketing planning should be an annual activity focusing on decisions related to the
marketing mix variables. The marketing plan section should focus on strategies for the first three years of
the venture. For the first year, goals and strategies should be projected monthly. For years two and three,
market results should be projected based on longer-term goals. Preparing an annual marketing plan
becomes the basis for planning other aspects of the business.
MARKET RESEARCH FOR THE NEW VENTURE
Information for developing the marketing plan may require some marketing research. Marketing research
involves the gathering of data in order to determine such information as who will buy the product, what
price should be charged, and what is the most effective promotion strategy. Marketing research may be
conducted by the entrepreneur or by an external supplier or consultant. Market research begins with
definition of objectives. Many entrepreneurs don't know what they want to accomplish from a research
study.
Defining the Purpose or Objectives
One effective way to begin the marketing plan is to make a list of the information that will be needed to
prepare the marketing plan.
Possible objectives:
Determine what people think of the product or service and if they would buy it.
Determine how much customers would be willing to pay for the product.
Determine where the customer would prefer to purchase the product.
Determine where the customer would expect to hear about such a product or service.
Gathering Data from Secondary Sources
An obvious source is data that already exists, or secondary data, found in trade magazines, libraries,
government agencies, and the Internet. The Internet can provide information on competitors and the
industry, plus can be used for primary research. Commercial data may also be available, but the cost may be
prohibitive. Free secondary information is available through:
The U.S. Bureau of Census and the Department of Commerce.
State departments of commerce, chambers of commerce, and local banks.
Private sources of data, such as Predicasts, the Business Index, and the SBA's Directory of Business
Development Publications, can be found in a good business library.
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Entrepreneurship ­ MGT602
VU
A local business library can also provide access to reference sources and articles about competitors
and the industry.
The entrepreneur should exhaust all possible secondary data sources, observation, and networking
before beginning costly primary data research.
Gathering Information from Primary Sources
Information that is new is primary data. Observation is the simplest approach. Networking is an informal
method to gather primary data from experts in the field, can be a valuable low-cost research method.
A recent study found that the most successful ventures were focused on information about competitors,
the customer, and the industry. Less successful ventures were more focused on gathering information on
general economic and demographic trends. Interviewing or surveying is the most common approach, but is
more expensive. The questionnaire used by the entrepreneur should include questions designed to fulfill
one or more of the objectives. Questions should be designed so they are clear and concise, without bias,
and easy to answer. If the entrepreneur lacks experience, he or she should seek help in developing the
questionnaire through Small Business Development Centers or a local education institution.
Focus groups
A focus group is a sample of 10 or 12 potential customers who participate in a discussion.
Groups discuss issues in an informal, open format.
These groups should be led by an experienced monitor.
Experimentation involves control over specific variables in the research process.
Analyzing and Interpreting the Results
The entrepreneur can enter the results on a computer or hand-tabulate the results. Summarizing the
answers to questions will give preliminary insights. Data can then be cross-tabulated to provide more
focused results.
UNDERSTANDING THE MARKETING PLAN
The marketing plan should answer three basic questions:
Where have we been? -The history of the marketplace, marketing strengths and weaknesses, and market
opportunities.
Where do we want to go (short term)? - Marketing objectives and goals in the next twelve months.
How do we get there? -Specific marketing strategy that will be implemented.
The marketing plan should be a guide for implementing marketing decision-making and not a superficial
document. The mere organization of the thinking process involved in preparing a marketing plan can be
helpful in understanding and recognizing critical issues.
CHARACTERISTICS OF A MARKETING PLAN
An effective marketing plan should:
1. Provide a strategy to accomplish the company mission.
2. Be based on facts and valid assumptions.
3. Provide for the use of existing resources.
4. Describe an organization to implement the plan.
5. Provide for continuity.
6. Be simple and short.
7. Be flexible.
8. Specify performance criteria that can be monitored and controlled.
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Entrepreneurship ­ MGT602
VU
The marketing system identifies the major interacting components, both internal and external, that enable
the firm to provide products to the marketplace. Environment factors, although largely uncontrollable,
should be studied.
Internal environmental factors are more controllable by the entrepreneur:
Financial resources: The financial plan should outline the financial needs for the venture.
Management team: An effective management team responsibilities assigned is needed for implementing
the marketing plan.
Suppliers: Suppliers used are generally based on a number of factors, such as price, delivery time, and
quality.
Company mission: Every new venture should define the nature of its business and what it hopes to
accomplish.
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Table of Contents:
  1. THE NATURE AND IMPORTANCE OF ENTREPRENEURSHIP:DEFINITION OF ENTREPRENEUR
  2. THE NATURE AND IMPORTANCE OF ENTREPRENEURSHIP:Possibility of New Venture Formation
  3. ENTREPRENEURIAL PROCESS/START UPS:GOVERNMENT AS AN INNOVATOR
  4. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND:ENTREPRENEURIAL PROCESS
  5. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…)
  6. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…):CLIMATE FOR ENTREPRENEURSHIP
  7. THE ENTREPRENEURIAL AND ENTREPRENEURIAL MIND (continued…):PROBLEMS AND SUCCESSFUL EFFORTS
  8. THE INDIVIDUAL ENTREPRENEUR:ENTREPRENEURIAL BACKGROUND AND CHARACTERISTICS
  9. THE INDIVIDUAL ENTREPRENEUR (continued…):Personal Values, Work History, MOTIVATION
  10. THE INDIVIDUAL ENTREPRENEUR (continued…):ROLE MODELS AND SUPPORT SYSTEMS
  11. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES:INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES, Minority interests
  12. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):DIRECT FOREIGN INVESTMENT
  13. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):BARRIERS TO INTERNATIONAL TRADE
  14. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):ENTREPRENEURIAL PARTNERING
  15. INTERNATIONAL ENTREPRENEURIAL OPPORTUNITIES (continued…):SOURCES OF NEW IDEAS
  16. CREATIVITY AND THE BUSINESS IDEA:METHODS OF GENERATING NEW IDEAS, CREATIVE PROBLEM SOLVING
  17. CREATIVITY AND THE BUSINESS IDEA:PRODUCT PLANNING AND DEVELOPMENT PROCESS
  18. LEGAL ISSUES FOR THE ENTREPRENEUR:NEED FOR A LAWYER, PATENTS
  19. LEGAL ISSUES FOR THE ENTREPRENEUR:TRADEMARKS, LICENSING
  20. LEGAL ISSUES FOR THE ENTREPRENEURS:PRODUCT SAFETY AND LIABILITY, INSURANCE
  21. CREATING AND STARTING THE VENTURE:WHAT IS THE BUSINESS PLAN, PRESENTING THE PLAN
  22. CREATING AND STARTING THE VENTURE (Continued….):WRITING THE BUSINESS PLAN
  23. CREATING AND STARTING THE VENTURE (Continued….):
  24. CREATING AND STARTING THE VENTURE (Continued….):WHY SOME BUSINESS PLANS FAIL, MARKETING PLAN
  25. THE MARKETING PLAN:MARKET RESEARCH FOR THE NEW VENTURE
  26. THE MARKETING MIX:STEPS IN PREPARING THE MARKETING PLAN
  27. THE ORGANIZATIONAL PLAN:DEVELOPING THE MANAGEMENT TEAM, LEGAL FORMS OF BUSINESS
  28. THE ORGANIZATIONAL PLAN (Continued….)
  29. THE ORGANIZATIONAL PLAN (Continued….):THE LIMITED LIABILITY COMPANY
  30. THE FINANCIAL PLAN:OPERATING AND CAPITAL BUDGETS
  31. THE FINANCIAL PLAN (Continued….):PRO FORMA INCOME STATEMENTS, PRO FORMA CASH FLOW
  32. PRO FORMA SOURCES AND USES OF FUNDS:PERSONAL FUNDS, FAMILY AND FRIENDS
  33. PRO FORMA SOURCES AND USES OF FUNDS:COMMERCIAL BANKS
  34. BANK LENDING DECISIONS:SMALL BUSINESS ADMINISTRATION LOANS
  35. SOURCES OF CAPITAL:GOVERNMENT GRANTS
  36. SOURCES OF CAPITAL:PRIVATE PLACEMENT, BOOTSTRAP FINANCING
  37. CAPITAL SOURCES IN PAKISTAN:PROVINCIAL LEVEL INSTITUTIONS, FINANCIAL INSTITUTIONS
  38. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  39. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  40. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  41. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  42. PREPARING FOR THE NEW VENTURE LAUNCH: EARLY MANAGEMENT DECISIONS (Continued….)
  43. NEW VENTURE EXPANSION STRATEGIES AND ISSUES:JOINT VENTURES, ACQUISITIONS
  44. NEW VENTURE EXPANSION STRATEGIES AND ISSUES (Continued….):DETERMINING THE PRICE FOR AN ACQUISITION
  45. ENTREPRENEURSHIP & PAKISTAN:GENDER DEVELOPMENT STATUS WOMAN AS AN ENTREPRENEUR IN PAKISTAN