Business Plan Preparation. Frank Moyes Leeds College of Business University of Colorado Boulder, Colorado. Today’s Agenda. Topics PRODUCT/SERVICE Margins Read BP pp 6-7 Elevator Speech In the Fire Hand-in 3 alternative value propositions Model company description. Next Week.
Frank MoyesLeeds College of Business
University of ColoradoBoulder, Colorado
Is This a Real Business? (max 10 slides)
Interim Peer Evaluation
Make an appointment with instructor for a 30 min meeting about where you are.
Market & Industry Analysis
Stage of Development
Performance: durability, quality of materials, defect levels, tolerances, construction, dependability, functional performance (acceleration, nutrition, taste), efficiency, safety, styling, packaging, etc.
Cost: purchase price, quantity discounts, operating costs, repair costs, cost of extras or options, cost of installation, trade in allowance, likely resale value, etc.
Availability: carried by local stores, credit terms, quality of service available from local dealer, delivery time, credit card, on-line transactions, etc.
Service: hours, warrant, guarantee, return/replacement policy, upgrades, maintenance, training, installation, repair service, spare parts, customer support, tech support, training, product design, make to order, level of inventory, quotation response time, lead time, quality certification, employee capabilities, etc.
Environment: location, atmosphere, layout, fixtures, aesthetics, style, sound, lighting, color, etc.
Describe major benefits - be specific
What is the evidence that benefits are understood by the market?
Emotional: ambition, power, independence, achievement, ambition, pride of ownership, comfort, love, friendship, security, style, self Improvement, etc.
Social: status, image, popularity with friends or family members, reputation of brand, personal relationships, style, fashionable, etc.
Health: stress, fitness, mental capacity, strength, sex life, quality of life, muse, etc.
Financial: revenue, costs, savings, productivity, pricing, profitability, market share, save time, productivity, etc.
Objective is distinguish between benefits & features, not put into categories
FEATURES are about the product or service and are often tangible attributes
BENEFITS are about the customer and are often about their needs, desires, dreams
FEATURES justify a product’s existence.
BENEFITS motivate (re)purchase.
FEATURES are rational.
BENEFITS are emotive.
To define the key benefits, keep asking: “Why does my customer care about that?”
BENEFIT (L1) BENEFIT (L2)
Reduces Snoring My spouse sleeps
My spouse is cheerful
My marriage thrives
Relieves Congestion Great night’s sleep
I feel energetic
I achieve my dreams
Overnight delivery Saves your job
“When it absolutely…
Inexpensive Biz Lodging Peak Performance
“No, but I did sleep at a Holiday Inn last night”
Intoxicating refreshment Look sexy, get the girl (every beer ad)
Pathway to Brand Loyalty
Performance - the primary operating characteristics of the product or service
Features - the characteristics that supplement the basic functioning of the product or service
Reliability - probability of the product or service failing within a specified period of time
Conformance - the degree to which a product or service meets acknowledged standards
Durability - a measure of product life (both technical and economic)
Serviceability - the speed, courtesy, competence, and ease of repair or recovery
Aesthetics - how a product or service looks, feels, sounds, tastes, or smells
Perceived Quality - various tangible and intangible aspects of the product from which quality is inferred
Reliability - ability to perform service dependably & accurately - receive mail at same time each day
Responsiveness - willingness to help customers & provide prompt service - avoid keeping customers waiting for no apparent reason.
Assurance - knowledge & courtesy of employees and ability to convey trust and confidence - being polite and showing respect for customer.
Empathy - provision of caring, individualized attention to customer - being a good listener.
Tangibles - appearance of physical facilities, equipment personnel and communication material - cleanliness. .
Revenue – COG’s Revenue
Revenue – Variable Costs
Net Earnings Revenue
Sales, General & Admin Revenue
% Gross Profit Margin
% Contribution Margin
% Net Profit Margin
% Operating Expenses