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Market and Industry Analysis - This section is designed to provide enough facts to convince an investor, potential partner or other reader that your business has enough customers in a growing industry, and can earn sales DESPITE the competition. It is one of the most important parts of the plan, taking into account current market size and trends, and may require extensive research. Many of the sections that follow - from manufacturing to marketing to the amount of money you need - will be based on the sales estimates you create here. You must make a number of assumptions when completing this section. For example, the percentage of available customers that you expect will pay for your product or service, called potential market penetration, is a key estimate in determining the amount of money you will make if every potential customer bought something from you. (Potential sales revenue.) No one expects you to know how many sales you will make during the first year or two, but you can provide fairly accurate estimates by making some educated assumptions based on your research. This section includes:
Customer profile - It is important to be thorough and specific when creating a description of the target customer for your product or service. Describe the ideal customer(s) for the business in great detail. This description defines the characteristics of the people you want to sell to and should indicate, among other things, whether your customers are cost or quality conscious, under what circumstances they buy, and what types of concerns they have. To create a customer definition, describe your target customers in terms of common identifiable characteristics. A common mistake is to describe customers in general terms, such as all "people who want to buy a bicycle," or "anyone who needs a resume created." to make a list of the characteristics of the people or companies that will buy your product or service. I have attached a document called "the Ideal Customer Profile Worksheet," you should try and complete it as best as you can to best address this section of the business plan
Target Market segment(s) - For each of your market segments, the market analysis should explain as much as possible about the target customers included in that group. That normally includes the segment description, needs and requirements, distribution channels, competitive forces, communications, and keys to success. The specific research related to this market analysis begins with statistics that provide total numbers of households, classrooms, businesses, and workers in a market. These are your basic demographics. What you need depends on whether you're looking at businesses, households, or individuals as your main target groups. When possible, you should be able to segment households by income level, businesses by size, and workers by job type, education, and other factors. Employment statistics can add information about types of workers and their education and background. You can also divide your target customers into groups according to psychographics. This is your strategic market segmentation, a core element of your marketing strategy.
Customer needs - The best marketing always focuses on customer needs. Why do they need your product or service? What is going to make them buy? Don't get trapped into merely marketing what you have when you should be identifying a customer need and working toward fulfilling it.
Market size/trends - This section defines the total market size as well as the slice of the market your business will target. Use numbers as well as trend information to make a case for a viable current market and its growth potential. After you define the total market, create a description of your target market by using geography, company size, business organization, lifestyle, sex, age, occupation, and other characteristics to describe the companies or consumers likely to buy your product or service. Take a look at the example provided in the sample business plan attached to this assignment.
Competitor Analysis - The competition section indicates where your products or services fit in the competitive environment. Presenting your business in the landscape of its competitors proves that you understand your industry and may be prepared to cope with some of the barriers to your company's success. Present a short discussion of each of your primary competitors. Each assessment should include why these companies do or do not meet their customers' needs. You should then explain why you think you can capture a share of their business. Strengths and weaknesses can fall into a number of different categories. Sales, quality, distribution, price, production capabilities, image, and breadth of products/services are all ways companies differentiate themselves. Ask yourself: Who is the price leader? Who is the quality leader? Who has the largest market share? Why have certain companies recently entered or withdrawn from the market? These factors are critical to a successful competitive analysis.
Pricing Strategy - Discuss what you will charge for your product or service and how you derived the price. For example, a luxury gift importing business sets prices not only to cover costs and make a profit but to position products as luxury items. A printing shop with a good location charges slightly more than its competition because it has a convenient location and it has determined that the market will bear the higher price. Once you have briefly explained your pricing and rationale, discuss where this pricing strategy places you in the spectrum of the other providers of this product or service. Next, explain how your price will: get the product or service accepted, maintain and hopefully increase your market share in the face of competition, and produce profits.
