Excercise 2
Market plan
To be presented 30.01
The business plan
According to ”Fra idé til ny virksomhet” the
business plan should consist of:
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Summary
The business idea
The management
The market plan
The business model and organization
The plan to carry it through
Financing and profitability
Risks
The market plan
• The market, competition, and context
• Choice of target market
• Market strategy
– Product
– Price
– Place
– Promotion
The market plan
• The market, competition and context
– Market size
• E.g. # of customers, produced units, and total turnover
– Market growth (~the coming 5 years)
• Real numbers, trends
– The competitive situation
• Industry
• What other companies are there that make the same or
similar products that you do.
• How many competitors are there, what are their size, market
share, strategies, …
– Context (e.g. regulations)
Industry cycle
• Emergence – artificial organ,
nanotechnology, genomics
• Growth –
medicine technology,
software, electronics
• Maturity electrical appliances,
automobiles, cinemas
• Decline Steel, bowling alleys
The market plan
• Market and competition
– Sources:
• Business organizations / international
organizations
• Special magazines
• Statistiske sentralbyrå
• EU
• Companies yearly reports / homepages
• www.google.com
The market plan
• Choice of target market
– Customer segmentation
• What characterizes your customers, e.g. ”early
adopters”, geographical factors, demographical
factors
– Positioning relative
competitors
• Your market share
Adoption curves
Early adopters
Late majority
Often a difficult
gap to cross
Innovators
Early majority
Laggards
Crossing the chasm
”There is nothing more difficult to carry out, nor
more doubtful of success, nor more dangerous
to handle then to initiate a new order of things.
For the reformer has enemies in all who profit by
the old order, and only luke warm defenders in
all those who profit by the new order. This luke
warmness arises partly from the incredulity of
mankind, who do not truly believe in anything
new until they are actual experience of it.”
Machiavelli, The Prince, 1513.
The market plan
• Market strategy
– Product
• Specify a little bit more; e.g. 1 for all segments or many
products
– Price
• Price strategy (e.g. cost-, value-, market based; penetrating
vs skimming; pusher (first for free – once addicted they need
to pay)
– Place (distribution channels)
• The way to the customer (by yourselves or via retailers?)
– Promotion (how to get to the customer)
Ex. Price
High
Contradiction
Avoid this
quadrant
Premium / Upscale
Those who want the best
and are willing to pay for
it
Price
Bargain
Value
Those who value a low
price more than quality
Those looking for ”best
value for the buck”
Low
Low
Perceived quality
High