New Business Development > Starting a Business > Feasibility and Business Plans

Create Your Own Business Plan -- Markets

File C5-69
Updated March, 2010

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Marketplace Analysis

In this section you can describe why and how customers will buy your product.  More specifically, you can describe that there are willing buyers for your product.

Below are items you may want to address in your marketplace analysis.

  • Describe and define the market. 
  • Is it a specialty or niche market? 
  • What sets the market apart from other markets? 
  • Describe the current size, the forces driving the market and the speed at which it is growing. 
  • Identify major customer segments and key customers in this market.

Target Market and Customer Analysis

In this section you can identify and describe your target market and analyzing customers within the target market.

You may want to consider the following points:

1. Target Market

  • Will the product be sold into a commodity or differentiated product/service market? 
  • Will the product be sold to consumers or as an ingredient in another market? 
  • If you are targeting a niche market, identify the relevant market segments and how they are defined.  
  • Describe the demand and usage trends of the target market in which the proposed product will be offered. 
  • Who are your target market customers (consumers, manufacturers, retailers, etc.)? 
  • What need does your product fill in the target market?
  • Examine the potential for emerging, niche or segmented market opportunities. 
  • Assess the opportunity and potential for a branded product. 
  • Assess potential market usage. 
  • What share of the market do you expect to capture?

2. Customer Analysis

  • What type of customer will you focus on – consumers, retailers, manufacturers, etc. 
  • Name specific potential customers (or types of customers) for this product. 
  • Are customers dissatisfied with the current products in the market?  
  • Identify any trials or tests of your product currently being conducted by potential customers. 
  • Describe any on-going contract negotiations with potential customers. 
  • What will motivate their buying decisions – product quality, price, public relations, etc.?

Direct Marketing

If you expect to market your product directly to consumers, discuss how you will accomplish it.

You may want to consider the following points:

1. Describe the direct marketing method(s) you will use.

  • Farmers Market
  • Community Supported Agriculture
  • E-Commerce
  • Catalog Sales
  • In-Store Demonstrations
  • Direct Mail
  • Freezer Sales
  • Catering
  • Door to Door Sales
  • Pick-Your Own
  • Roadside Markets
  • Sales to Restaurants and Institutions
  • Other

2. List the attributes of this market.

  • Specific location and name of the market.
  • Will this allow you to access your target market?

Competitive Assessment

In this section you can identify the competitors in your market and how you will compete against them.

You may want to consider the following points:

  • Identify similar products/services in the market that are direct competitors to your product/service.  
  • Compare your product/service to these products/services (ie. features, service, quality, price, distribution, brand, etc.). 
  • Describe the companies that produce these products/services. 
  • Describe the concentration within the market (ie. large number of small players or small number of large players). 
  • Describe the current competitive intensity within the market (cutthroat competition or live and let-live). 
  • Describe the ease of entry of competitors into this market (can competitors easily enter the market and drive prices down). 
  • Describe how you will compete against these competitors and their products – ie. low cost, niche market, product differentiation, etc.

Market Access, Distribution, Pricing, and Sales Forecasting

1. Access to Market Outlets:

  • Will the product/service be sold directly to consumers or directly to wholesalers/retailers?
  • Will an intermediary such as a broker, distributor or marketer be used?
  •  Identify the potential intermediate and end buyers of the product/service and the associated marketing costs to access each. 
  • Outline the product/service distribution system and the costs involved. 
  • Describe any strategic marketing partners that will be used to garner access to key customers (for example, brokers, other manufacturers, distributors.) 
  • Specify commitments from customers or brokers. Are the commitments verbal or contractual?

2. Pricing Plan:

  • Explain how you set your selling price.   
  • Why will customers pay this price?
  • How does your price compare to that of competitors? Why should it be different?
  • Will your pricing plan include selling on credit? What are the terms? Who will you extend credit to? How will you manage accounts receivable? How much will this cost you?

3. Sales Forecast:

  • Make a projection of sales or usage.   
  • Carefully identify and assess the accuracy of the underlying assumptions in the sales projection. 
  • Project sales under various assumptions (e. g. selling price, services provided, other)
  • Project alternative possible levels of sales (high, low, average).

Marketing Message and Promotion

In this section you can describe how you will promote your product.  Use the topics listed below to help guide your discussion.

  • Identify marketing themes or product propositions that will be utilized with key customer segments. 
  • Describe the use of third parties to be used in the development or deployment of marketing messages (eg, advertising agencies, consultants, etc.). 
  • Describe the selling strategies to be used by sales or marketing personnel. 
  • Describe advertising and communications programs that will be deployed, and the media in which they will be deployed. 
  • Identify strategic selling partners (e. g. entities that will co-promote your product, include it within their sales bundle, etc.). 
  • Identify any plans for marketing research to assess customer acceptance of the sales strategy. 
  • For very large potential customers, identify specific market development objectives for those customers. 
  • Identify marketing and sales incentives to be used for third parties and for sales staff.

 

Don Hofstrand, retired extension value added agriculture specialist, agdm@iastate.edu