Business Plan Prep ch 4

• secondary research

Information already collected for some other purpose than the current problem or questions.

• primary research

New information collected to solve a problem at hand or answer cur- rent questions.

• scalar questions

Questions that are answered by some sort of scale; for example, "On a scale of 1 to 5, how do you like this book?"

• dichotomous questions

Questions that have only two pos- sible choices; for example, "Have you shopped here before?"

• marketing research

Systematic collection and interpretation of data to support future marketing decisions.

• differential advantage

The characteristic that separates one company from another in product, price, promotion, and/or distribution.

• market segmentation

The process of dividing the market into groups that have somewhat homogeneous needs for a product or service.

• indirect competition

Companies that provide alterna- tives that are dissimilar to your product/ service that consumers might choose to meet a similar need; for example, indirect com- petition for Coca-Cola includes any other company providing items to quench thirst.

• bot

A Web-based program that uses artificial intelligence techniques to automate tasks such as searches.

• survey

A data-collection method using a questionnaire—in person, on phone, on paper, or on the Internet.

• focus group

A form of data gathering from a small group led by a moderator.

• concentrated strategy

A marketing strategy in which a marketer selects one specific group of consumers and designs a marketing mix specifically for that group.

• differentiated strategy

A marketing strategy in which a marketer selects two or more distinct groups of consumers and designs specific marketing mixes to meet their needs.

• undifferentiated strategy

A marketing strategy that uses no segmentation; assumes that all consumers have virtually identical needs and can be reached by the same marketing mix.

• marketing plan

A systematic written plan of all phases of marketing for a busi- ness, including information on the product, price, distribution, and promotion strategy, as well as a clear identification of the target market and competition.

• ethnographic research

Data gathered by simple observation—seeing what consumers do, rather than asking them.

• direct competition

Other companies that make a similar product or provide a similar service; for example, direct com- petition for Coca-Cola includes all other soft drink providers.

• open-ended questions

Questions that allow respondents to express themselves as they choose; for example, "What do you like about this book?"

• categorical questions

Questions that are answered by selecting the proper category; for example, "What is your ethnicity? White, African American, Hispanic, Asian, American Indian, Other."

LO4 Find or create a product's differential advantage.

● A differential advantage is that which sets you apart from the competition. ● The differential advantage can be in your product, promotion, distribution, or pricing.

LO3 Use sales forecasting methods.

● If your product or service is a component of another prod- uct or tied directly to another product or service, your estimated sales can be calculated as a portion of this known number. ● Most products and services, however, will require "softer" estimates such as traffic counts or questionnaire results. ● This sales forecast is critical to and must be checked against your capacity.

LO2 Recognize the major methods for conducting market research.

● Secondary research is data already gathered for some other purpose than the question you are trying to answer. ●Internet, libraries, newspapers, and magazines offer free data; data are also for sale and can range from rela- tively inexpensive to very expensive. ●While using secondary data is quick and often free, it may not give you exactly what you need. ●Primary data is that which you gather to answer your current questions. ●primary data can be gathered through observation, focus groups, or questionnaires. ●Questionnaires can be administered via mail, phone, Internet, or in person and can consist of close-ended or open-ended questions.

LO1 Understand the importance of a marketing plan.

● The marketing plan helps you articulate how you are going to sell your product or service. ● The marketing plan is a necessary piece of the business plan. ● The plan examines your current situation and competition and specifically identifies what you will do with your product, pricing, promotion, and distribution.

LO5 Identity the critical components of a marketing plan.

● Who is your target market? ●Typically, markets are divided by demographic, life style, or personality traits. ●The target market is the group that is likely to buy your product or service and that has distinct purchasing behaviors. ●Secondary target markets should also be considered. ●What is your current situation? ●Ongoing businesses must reflect over the recent year and how effective their actions were. ●All businesses must consider likely changes in political, economic, cultural, and other external environments and how these may affect the business. ●Direct and indirect competition must be identified and its actions and likely actions analyzed. ● What are your specific plans for your product, promotion, pricing, and distribution? ● The marketing plan needs to be written, but the format can vary depending on who is going to use it. ● The plan should be revised regularly—whenever something sig- nificant occurs to change a piece of it or at least once a year.