MARKETING PLAN

Creation of the business concept- in search of uniqueness

Entry barriers to markets

… obstacles that have an impact on the chances of the enterprise to gain a foothold in the market - the first real condition for success. Entry barriers vary over time and across industries.

Barriers have not necessarily been raised as a protection against new ventures - but may be inherent to an industry or a cluster of enterprises.

Entry barriers type A: Customer access

• Without customer access there is no business

Entry barriers type B: Customer acceptance

• Customer access is a necessary, but not always sufficient condition for conquering market shares

• you should not underestimate performance, functional and design attributes, production costs and hence price because they are important acceptance promoting elements

• Economies of scaleThe diminishing unit cost as a function of volume per time unit. Large scale operations protect against invaders who will, initially, be short of volume

• Experience curveDeclining unit costs as a function of learning through the accumulated production during the overall life of the product class. Experience curve advantages constitute an effective price barrier which is rarely overcome by competing head-on.

• System tiesare not just a matter of being able to guarantee interoperability and persistence (proprietary standards) and assure the customer that no unforeseen consequences, disruptions or other factors will happen to the existing routines. System ties also occur by way of workflows and procedures that have to be changed if new concepts are introduced.

• Transaction costspart of the price and so constitute a barrier to customer acceptance. 3 Cs: Contact, Contract and Control

• Product differentiationDifferentiation may entail a physical as well as a perception dimension, and in many industries it works as an effective blocking mechanism against entrepreneurial ventures.In industries with a high degree of product differentiation suppliers have apparently understood the value of effective segmentation and positioning.

• Compatibilitya supply or a product will seamlessly fit into a customer's activities and processes

• References• The newcomer enterprise may attempt to concentrate its foothold-

gaining strategy on customers who are especially willing to run a risk, or who have done well by being innovators. Or they may try to interest customers in a joint venture development (pilot projects) in which the customer becomes the co-owner of the innovation and has a certain ability to influence things at a modest price

• Brand equityperceived quality, mindshare, and loyalty. Branded goods or corporate branding are predominant decision criteria for customers indicate considerable differences in customers' quality perceptions.

Entry barriers type C: Competitor reaction

• obviously a barrier that the entrepreneur will always have to consider

• important for the entrepreneur to understand what kind of countermoves may be expected

Strategies for market entry

• Entry strategy type A: First mover- first, the biggest, best

• Entry strategy type B: Differentiation

Entry strategy type C:Generic product-market strategy

Marketing Plan

• The target market strategy• The product/service strategy• Pricing strategy• Distribution strategy• Advertising and promotion• Sales strategy• Sales and marketing forecasts.

• See page 87 Business Plan That Work