In order to achieve the targeted sales, the way you price your products and/or services matter a lot.
Examples of overall marketing strategies include:
- Market penetration
- Product development strategy
When developing pricing strategy, you have to consider the following factors:-
- Methods of calculating the selling price of your products and/or services.
- Factors which will influence your price setting e.g. competitors’ price, demand for the product, production costs.
- Actual selling prices of your products and/or services.
- Credit terms to be offered.
- Discounts, e.g. trade discount, cash discount.
- Any after-sales services and relevant costs.
Justify your prices, particularly if they are substantially above or below the prices of similar products and/or services in the market place. Demonstrate that your pricing decision is based on your company’s ability to make a profit.
- Show calculations for determining your selling price (methods of coming up with price)
- How does this compare with the price charged by each of your competitors – impact of products/services
- Cost price reduction approach
- What is your gross profit margin
- What price structures have you in place to cover quantity discounts – structure
- What credit terms will you offer to your customers?
- What discounts will you offer your agents, distributors
- What pricing policies do you have for after sales services?
- Describe the size of your competitors. Are they small, medium, or large in relation to your business. (Consider assets, sales volumes, number of employees, and number of brands).
Describe the methods you will use to make sales
- These selling techniques, including:
- Personal selling
- Selling indirectly e.g. use of agents
- Getting orders
- Satisfying customer needs
- Customer interviews
- Sales appeals
- Recruitment and retention of the sales force
- Ways of selecting and motivating distributors/agents and/or sales people
Servicing, Warranties And Packaging
In this part of a business plan, you are required to:-
- Discuss the types of packaging that you will use.
- The policies that you set regarding servicing and warranties
- Discuss the purpose of the packaging, servicing and warranties
- Explain how they fit in your overall marketing approach
- Explain why you feel that they will increase sales and profits.
1. For packaging,
Explain what features will be responsible for sales, it is
- The appearance of the packaging
- Texture or
Is there something other than the sensory appeal of the package? For example:
- The packaging may make it easier for the customer to carry
- It may reduce the chances of breakage
Discuss the cost of the packaging
2. For servicing:
- Describe your servicing programme.
What features are included in this programme?
- Explain your purpose for each of these services
Are they additional sources of income?
Do they result in future sales by increasing customer satisfaction or by enhancing your reputation?
- Explain who will provide the services and under what arrangements:
Do you intend to continue the servicing without additional change?
If not, will the customer be able to buy a service contract or will he/she merely pay cash for each servicing?
What will you charge for the servicing and what will your costs be?
Advertising And Promotion
Making your products and services known to your potential customers is essential in increasing sales. In this part of your business plan you should discuss your planed advertising and promotion programme.
When setting an advertising and promotion programme, consider the following:
1. Decide on the purpose of the programme
Are you try to generate immediate profit and trying to build up your business mage?
Are you trying to create awareness of your products?
2. Identify the advertising and promotion target.
Will your advertising and promotion be directed toward the general population, your entire market or a portion of the market?
3. Determine what media to be used. Use most appropriate media for your target market.
4. Determine the amount to be spent, the frequency of the advertisement and the content of the advertisement.
5. Decide in advance how you will measure the effectiveness of the advertising programme.
6. Determine the plans for initial promotional campaign and plans for regular promotional methods.
7. Determine the cost for each promotional event.
8. Determine how you will measure the promotional effectiveness.
For your business plan, include as much information as you have.
- What will be the frequency of your advertising?
- How do you intend to promote each product/service?
- What promotional activities do your competitors use?
- What is your advertising and promotional budget?
- How will you measure the effectiveness of each promotional activity?
Reaching the market: Marketing channels
These refer to how goods reach the market place. For a business there are two choice of channels:
1. To distribute to end users
2. through intermediaries
Multi- level marketing these is used to describe a variety of ways of reaching consumers: by a chain of direct selling agents this includes pyramid selling which is legally regulated as many self employed people were duped into buying a stock of product which was being sold to fill up the distribution lines and rarely to end users. Multi-level or network marketing involves setting up a pyramid structure of sales agent, who earn commission on their sales to consumers and to other agents and both on their sales to consumers and to other agents the agent does not need to buy stock in order to make a sale, other than for demonstration purposes thus if final users are not buying the product the system breaks down
In describing the channels distribution you tend to use. Consider the following:
- Types of channels of distribution available
- Nature and channels you will utilize
- Location/premises improvement resources
- Outline your distribution channels geographical area you intend to serve
- What means of transport will you use and how much will it cost?
- What problems do you anticipate in your distribution network?
- Indicate methods of solving the problem