An effective bplan requires a business market plan to be incorporated within the document. The section of your business plan focused on Marketing and Sales Management needs to detail the conclusions of your market research efforts.
Typically, there are two types of market research--primary marketing research and secondary marketing research so that the readers of your plan (and you!) thoroughly understand how you arrived at the conclusions you did in answering the question: Who is my customer? A word of caution: you may be smart, your products and/or services maybe superb but unless you have an effective marketing plan, your business could flounder. Why? Because a good business market plan begins with careful market research. If you "assume" you know who your customer is and act on that, there is a chance that you will get it wrong.
An effective business plan requires a realistic business market plan. The extent and type of your marketing research really depends on your budget. If you are well financed going into business, your best bet is to get a paid market research study done. New business marketing research done by a top-notch marketing research firm will tap market research information resources including market research focus groups and other measures. You can also check for paid online market research if you do not want to hire a company. There is a rich variety of market data research available. It is similar to peeling the skin off an onion, the more layers you peel away, the more there is. Examples: if you were to market research student spending, do construction market research, auto market research, or semi conductor market research you would have vastly greater quantities of information than you need.
Here are the typical sections of a business plan that you should consider when writing a business plan:
If you decide to go with a market research firm, it will conduct both primary and secondary marketing research we mentioned earlier. Primary market research involves going directly to the customer to find out more about them. Secondary market research relies of existing material and data to get information on the customer.
If you cannot afford to hire a marketing research firm do do your business market plan, you can do the marketing research yourself. Like anything else, however, you need to learn how to conduct market research. You need to educate yourself in how to do market research before you tackle the task. The marketing research process is a complex one and there are a number of good books and articles that you can use to better understand and undertake marketing research.
Getting Information On Your Market
The Small Business Administration (www.sba.gov) suggests looking at these websites for possible help in developing secondary market research. They are: http://sbdcnet.org/SBIC/demographics.php -- Demographics — Research Your Market; http://sbdcnet.org/SBIC/marketing.php -- SBDCNet - Marketing; http://web.sba.gov/sbtn/registration/index.cfm?CourseId=1 -- Business Plan Workshop; http://www.sba.gov/ smallbusinessplanner/ plan/writeabusinessplan/SERV_BUSPLANFAQS.html -- Business Planning FAQs.
We offer articles within this website on conducting market research to help you produce your business market plan as well, including:
Glossary of Terms
Definition of 4 P’s of marketing — An effective business market plan will mix the four P’s of marketing to reflect the demands of consumers in a market. The four P’s of marketing are: pricing: the process of setting a price for the product or service including discounts; promotion: includes advertising and promotion and refers to the advertising, sales promotion and publicity (it also refers to the various methods of promoting the product, brand or company); products: this deals with the specs of the product or service you are selling (how it relates to the end users needs and wants); and place: refers to how the product gets to the customer. It refers to the channel by which the product or service is sold or distributed.
Definition of Market or Marketing Segmentation — Market or marketing segmentation is the process that defines or breakouts your market into distinct groups that have similar needs or behave in a similar way. The theory is that because these market segments behave in a similar way, they are likely to respond to a similar marketing strategy.
Definition of primary market research — Primary marketing research is going right to the horse’s mouth to do research, that is contacting the prospective customer to determine if he or she is in fact a customer and if not, who is the customer? Primary market research is conducted through focus groups, telephone or in-person interviews or surveys, direct observation of the customer in action, mail surveys and the like.
Definition of secondary market research — Secondary marketing research takes material that already exists and extrapolates information from it. This type of research might involve going on the internet to many of the information-rich sites. It could be free market research or inexpensive market research.
Once you have your business market plan complete—that is, once you have described your markets and marketing plans—focus in of sales. This can be tricky. If you have an ongoing business, you can use a spreadsheet program to forecast month by month sales. An existing business can use real world numbers including perhaps numbers by month from the best years and worst years. That gives you your best guess and worse case. If you are a new business, you will need to rely on best guess estimates. What would be extremely helpful to you at this point is if you had hired a marketing research firm. That firm could come up with more convincing best guess numbers for you than if you did your own market research.
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