New Venture Planning

Mod -3
• Methods to Initiate Ventures; Acquisition-Advantages of acquiring an
ongoing venture and examination of key issues;
• Developing a Marketing plan-customer analysis, sales analysis and
competition analysis,
• Business Plan-benefits of drivers, perspectives in business plan
preparation, elements of a business plan;
• Business plan failures.
Venture

• Venture is defined as to go on
some sort of journey or to take
a risk in something. An example
of venture is to put money into
a business that might not be the
most profitable, but that will
make the person happy.
• A new business that is formed
with a plan and expectation that
financial gain will follow.
• It is referred to as a small
business, as it typically begins
with a small amount of financial
resources.
 Generating
Methods to business idea
initiate
ventures Sources of new
ideas
Most common idea generation ideas
• Brainstorming-group discussion
• Market analysis-investigation , swot analysis
• Think tank-core group formed by known people
• Looking into the future-social trends , changing customer needs
Sources of new ideas
• Analyze the performance of exciting industries
• Examine the inputs and outputs of various industries
• Review imports and exports
• Study plan outlays and government guidelines
• Study the suggestions of financial institutions and development agencies.
• Investigate local resources and skills
• Analyze economic and social trends
• Study new technological developments
• Explore the possibility of reviving sick units
Acquisition
• An acquisition is when one
company purchases most or
all of another company's
shares to gain control of that
company. Purchasing more
than 50% of a target firm's
stock and other assets allows
the acquirer to make
decisions about the newly
acquired assets without the
approval of the company's
other shareholders.
• The acquisition example includes purchasing whole foods in 2017 by Amazon for
$13.7 billion.
• In April 2014, Sun Pharmaceutical acquired 100% of Ranbaxy
Laboratories for $4 billion to create world's fifth largest specialty
generic pharma company.
• On June 13, 2016, Microsoft Corp and LinkedIn entered into a definitive
agreement under which Microsoft acquired LinkedIn for $196 per share
in an all-cash transaction valued at $26.2 billion.
• Disney acquired 21st Century Fox Company on March 20, 2019. This was
the largest and perhaps most complicated acquisition of one media
company to another in history.
Standard & Poor's (S&P) Moody's and Fitch are the three most
significant rating agencies in the world. These agencies rate the
creditworthiness of countries and private enterprises. “AAA” or
“Aaa” is the highest rating across all three rating agencies and
indicates the highest level of creditworthiness
 Overall Planning Process (Slide 1 of 3)
▪ Initial planning and preparation will help minimize the stress in
developing a well-structured marketing plan. Gathering the following:
– Situational Analysis / Market Research:
• Assess market trends. Is the market affected by seasons or other factors?
• Profile your ideal customer (demographics, size, location, needs, industry, etc.).
• Determine what current product sales are.
• Identify potential vendors and calculate the costs of buying their supplies.
• Describe strengths, weaknesses, opportunities, and threats your business faces
(SWOT Analysis).
– Target Market: Identify and understand your market niche.
– Positioning: Identify how you want your customer to think about you.
– Product:
• Describe your product or service, its uses, who uses it, who needs it, and what is
currently used if they don’t use your product.
• Define your value proposition.

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 Overall Planning Process (Slide 2 of 3)
– Competition: Conduct competitive analysis, including their marketing efforts.
Determine what differentiates your product or service from competitors.
– Mission Statement: Define your corporate mission, vision, and
objectives/priorities.
– Marketing Strategies and Methods:
• Create your messaging, including taglines, product descriptions, and call to action plan,
e.g. Direct the prospect to contact you or go to your web site).
• Determine how you will promote your product: Networking, advertising, submitting
responses to Request for Proposals (RFPs), social networking sites, web site, phone
calls, email blasts, etc.
• Consider creating brochures, flyers, press releases, or other printed material.
• Decide if and how you will utilize salespeople (internal or contract).
• Create brand awareness by promoting your product and distinguishing it from
competitors.
 Overall Planning Process (Slide 3 of 3)
– Pricing:
• Research competitor pricing.
• Determine your cost of doing business and how much you should charge to
break-even and be profitable (return on investment (ROI)).
– Budget:
• Determine what your marketing strategies will cost (one-time or recurring charge).
• Determine what you can do yourself to lower costs and what should be
outsourced. Be careful not to decrease your product’s value by not utilizing
professional services, e.g., graphic artists, web developers, etc.
– Marketing Goals:
• Determine how many prospects you will contact daily, weekly, and monthly.
• Commit to attending networking functions.
– Monitor Results:
• Define measurements for your marketing strategies.
• Track sales, leads, visitors to your web site, percent of sales to impressions, etc.
 The Marketing Challenge
▪ Ask yourself these five critical questions:
1. What is unique about your business idea? What is the general need that your product or service aims to
meet?
2. Who is your target buyer? Who buys your product or service now, and who do you really want to sell to?
3. Who are your competitors? How can your small business effectively compete in your chosen market?
4. What positioning message do you want to communicate to your target buyers? How can you position your
business or product to let people know about your product?
5. What is your marketing strategy? How will you get your product or service in the hands of your customers?
 The 10 Elements of a
Good Marketing Plan
▪ A good marketing plan includes these 10 elements:
1. Business Description
2. Market Research and Analysis
3. Pricing Analysis
4. Customer Profiling
5. Competitive Analysis
6. Marketing Goals and Objectives
7. Marketing Strategies
8. Marketing Methods
9. Marketing Budget
10. Success Measurements
 1. Business Description
▪ Describe your business’:
– Mission statement, corporate vision, and strategic intent.
– Long-term goals and objectives, e.g., profit, ROI, market share, expanding reach
into existing set of core customers, or expansion into new markets.
– Organization:
• Key personnel.
• Team overview.
• Organizational chart.
– Products and/or services:
• Value proposition, including the problem your product is solving for customers or the
needs your product provides.
• Key differentiators.
• Sales trends and profitability (years, seasonality, share of major brands).
• Pricing overview.
• Branding.
• Growth opportunities.
• Target market.
 2. Market Research
and Analysis (Slide 1 of 2)
▪ Gaining information about your target market and key factors that
influence customers’ buying decisions is typically one of the following:
– Quantitative Research: Statistical and uses mathematical analysis.
– Qualitative Research: Identifies key issues from collected data.
▪ Generally, market research includes:
– Identifying and testing potential target markets.
– Determining ideal customer profile and demographics for your products.
– Determining market influences on timing, pricing, service, etc.
– Gauging economy and buyer confidence.
– Conducting competitive analysis.
– Testing perceptions towards brands, companies, images, packaging.
– Measuring customer satisfaction and benchmarking satisfaction against
competitors.
– Capturing key criteria for your SWOT analysis.
 2. Market Research
and Analysis (Slide 2 of 2)
▪ A situation analysis considers internal and external factors that could
influence your marketing strategy. Analyzing your strengths, weaknesses,
opportunities, and threats (SWOT analysis) is simple, yet powerful, and will
help you develop your goals and marketing strategies.
– Strengths (Internal): Positive attributes, tangible and intangible, internal to your
business that are within your control. What do you do well? What advantages
do you have over your competition?
– Weaknesses (Internal): Factors within your control that detract from your
ability to obtain or maintain a competitive edge, such as lack of expertise,
limited resources, inferior service offerings, or the poor business location.
– Opportunities (External): Reasons your business exists and prospers and reflect
the potential you can realize through implementing your marketing strategies.
– Threats (External): Factors beyond your control that could place business at risk
and may lead to deteriorating revenues or profits, such as competition, price
increases by suppliers, economic downturns, or a shift in consumer behavior.

FDIC OMWI Education Module: Developing a Marketing Plan 32

 3. Pricing Analysis
▪ Determining the price you want for your product or service can be challenging if you don’t have some
historical price and demand data. Ways to determine your price include:
– What is your cost of doing business?
– What is the cost to manufacture your product?
– What is your break-even point?
– What amount do you need to charge to be profitable?
– What amount are customers willing to pay?
– What are competitors charging?

FDIC OMWI Education Module: Developing a Marketing Plan 33

 4. Customer Profiling
▪ Defining your ideal customer shouldn’t be a difficult process. You do not
need serve everyone, but your customers’ needs should be well-defined.
– What is your current customer base (age, sex, income, and geographic
location)?
– What habits do your customers and prospects share? Where do they shop,
what do they read, watch, or listen to?
– Which prospects are you currently not reaching? How can you reach them?
– What qualities do your customers value most about your product or service?
Do they value selection, convenience, service, reliability, availability, or
affordability?
– Would you attract more customers if you
– What qualities do prospects want you to change about your product or service?
What are the advantages and consequences for modifying your product?
 5. Competitive Analysis
▪ It’s not difficult to identify your competitors. However, it may be
challenging to compile complete data. You may be successful by:
– Visiting their location (if possible).
– Browsing their website.
– Talking to their customers.
▪ Competitive analysis should include:
– Who are your major competitors and what are their products, pricing, and
strengths and weaknesses?
– How much do they spend on brand positioning, advertising, and
promotional sales? How else do they reach customers?
– Do they have new or improved products?
– Have they entered new markets or territories?
– What benefits or value do competitor products offer their customers?
– How do your products differ from competitors?
 6. Marketing Goals and
Objectives
▪ The terms “goals” and “objectives” are typically used interchangeable, but
there is a distinct difference:
– Goals: Statements that provide marketing direction and are in-line with the
company’s overall direction. If goals are too broad, they may be less effective.
– Objectives: Specific and measurable actions or methods of achieving the
company’s goals. These are usually described in quantitative terms: Sales dollars,
units sold, market share, etc.
▪ Use “SMART” to develop well-defined goals and measurable objectives:
– Specific: Well-defined, actionable goals.
– Measurable: Turns a goal into an objective with measurable results.
– Attainable: Set goals that are within reach.
– Relevant: Consider current market/economic conditions when developing goals.
– Time-Based: Set a timeframe for achieving your goals.
 7. Marketing Strategies
▪ Once you’ve defined your marketing goals and objectives, you need to
develop a marketing strategy or idea on how you put your goal into action
to achieve profitable success. A basic example includes:
– Goal: Gain 10% more customers within the next 12 months.
– Strategy: Change the color of your product’s packaging to make it more
appealing and entice customers to choose it.
▪ Marketing strategies are generally concerned with four Ps: Product, Pricing,
Promotion, and Placement.
– Product: What is the right product or product improvement?
– Pricing: What is your price? Is it in line with current economic conditions and/or
competitors? Does it support your product positioning?
– Promotional: How can we gain more publicity or increase awareness?
– Placement: Are we targeting the right customer base at the right locations?
 8. Marketing Methods
▪ Part of the challenge of marketing is determining which distribution method
and placement strategy to use for your business.
– Retail: Stores selling directly to customer.
– Wholesale: Selling to a distributor that sells to retail stores or the customer.
– Direct or Print Mail: Generally catalog merchants that sell directly to customer.
– Telemarketing: Merchants sell directly to customers at retail via phones.
– Internet Marketing: Merchants sell directly to buyers at retail prices, or
business-to-business products and services at wholesale prices via the Internet.
This also includes social media, such as Twitter, Facebook, LinkedIn, etc.
– Sales Force: Salaried employees or independent commissioned representatives
sell products directly to the customer.
– Advertising: Internet ads, magazines, sponsorships.
– Networking: This includes tradeshows, joining industry organizations, attending
industry breakfasts/luncheons.
 9. Marketing Budget (Slide 1 of 3)
▪ Small and mid-sized businesses often arbitrarily set marketing budgets as
either “x” percent of revenue or “y” percent over the prior year's budget.
▪ The SMART goals you developed will help you create a targeted budget.
▪ Each marketing line item you plan to use should have a budget.
▪ Your budget should be defined, but flexible. If a particular strategy is
extremely successful, temporarily increase the budget. Temporary success
may be seasonal and may not warrant an extensive or long-term increase.
▪ If a particular strategy is not successful, consider documenting your
findings in an appendix for lessons-learned. Refer to this information when
you update your marketing plan and budget in the future.
▪ Your income and expenses should be calculated to help determine how
much you can spend on marketing.
▪ Research costs associated with your strategies, e.g., printing, postage, etc.
 9. Marketing Budget (Slide 2 of 3)
▪ Tie sales/revenue forecasting with your marketing budget to increase your
chances of success by:
– Calculating the amount or number of goods you need to sell in a fiscal year in
order to be profitable.
– Creating marketing goals and strategies that will enable you to reach your
sales/revenue forecasts.
– Defining the budget for these marketing goals and strategies. If there isn’t
enough money left to implement these strategies, it may be an indication that
your revenue forecast is set too high, or your marketing budget is set too low.
– Developing measurable results (SMART) for marketing activities will help you
understand what’s working and what may need to be modified.
 9. Marketing Budget (Slide 3 of 3)
▪ Determine marketing line items by answering these questions:
– What previous marketing methods have been most effective?
– What are your costs compared to sales?
– What is your cost per customer?
– What marketing methods will you use to attract new customers?
– What percentage of profits can you allocate to your marketing campaign?
– What marketing tools (i.e. - newspapers, magazines, Internet, social media,
direct mail, telemarketing, event sponsorships) can you implement within your
budget?
– What methods are you using to test your marketing ideas?
– What methods are you using to measure results of your marketing campaign?
 10. Success Measurements
▪ Measuring your marketing efforts will help you determine which strategies
are working and which are not. Creating detailed metrics will help you
understand, control, and improve your business’ success.
▪ Measuring some aspects of your marketing activities will be challenging.
For instance, measuring the success of a brochure may not be possible
unless it was part of a larger campaign.
▪ Common ways marketing efforts are measured include:
– Sales: How many products did you sale? How many proposals did you submit
and how many did you win? What were your projected and actual sales?
– Return on Investment: How much profit did you receive after deducting
expenses?
– Web Site: How many people clicked on your web page? Did more click on your
web site after you placed a magazine ad? How many requested additional
information? How many became leads? How many became new customers?
– Customer Satisfaction: Are your customers satisfied with your products? Do
they have brand loyalty? Are they repeat customers?
– Phone Calls or Presentations: How many did you make in a week, month,
quarter, and year? How many did it take to lead to a customer?