DESCRIPTION OF THE PRODUCT OR

SERVICE
The product or service must be described clearly in the
plan. To achieve this, the following must be presented:

1. The important features of the product or service

e.g, such as the maintenance-free feature of the product, or the home
delivery service for products ordered through the phone.
2. A detailed description of how the product is used.
3. What makes the product or service different from
others available in the market.
e.g, the availability of the product or service 24 houday, or the water-
based feature of the product insect repellant.
The objectives of the product or service
description is to show that the firm has
competitive edge to the others.

The following are the positive factors that are

worth describing for.

1.superior organization of the business;

2. latest equipment that are currently used by the
company;
3.superior location of the company;
4.fair price of the product or service; and
5.superior customer service offered by the company.
 MARKET STRATEGIES
 refer to what the SBO plans to do to achieve the
market objective of the firm.
These strategies are formulated after undertaking market research.
Market strategies consist of the following:
1.definition of the market;
2. determination of the market share;
3. positioning strategy;
4.pricing strategy;
5.distribution strategy; and
6.promotion strategy.
Definition of the market
 The objective of market
definition is to determine which
part of the total potential market
will be served by the firm.
Hence, the market must be
defined in terms of size,
demographics, structure, growth
prospects, trends, and sales
potential. To determine the total
potential market, the total
aggregate sales of the
competitors must be presented.
Determination of the market share
 The business plan will be more useful to the
reader, especially lenders and investors, if
Number of prospects in 1000
the projected market share of the firm is the targeted market families
presented.
Frequency of purchase per 48 times
To determine the firm's market share, the year (average)
following steps may be used: Total number of purchases 48,000
per year
1.determine the number of prospects in the target market;
Average payment per 1000
2.determine the number of times the product or service is purchase
purchased by the target market;
Projected total industry 48,000,00
3. figure out the potential annual purchase; and sales per year 0
4. determine the percentage of the potential annual purchase Percentage the firm can 15%
that the firm can attain. attain
The firm’s market share 7,200,000
Positioning strategy
 positioning refers to how the firm differentiates its producT tor service from those
of the competitors and serving a niche.
 Positioning strategy is one where the firm identifies a target market segment and
develops a strategy mix to address the desires of that segment. The objective of
positioning is to establish the firm's product or service identity in the mind of the
buyer.
 Before adapting a positioning strategy, the following questions must first be
considered:
1.What does the customer really want to buy from the firm?
Apart from product quality, the answer could vary from fast and efficient service to clean and friendly
environment, to good reputation, and the like.

2.How is the product or service different from the competitors'?

A product or service may be different from competition in terms of quality, maintenance requirements, number
of uses, ease of operation, among others.

3.What makes the product or service unique?

The firm's product or service maybe unique in many ways. It may only be the one that is delivered free to the
customer's house, or it may be the only product that provides a trade-in option to the customer.
Pricing strategy
 How the firm prices its product or service is a very important component of the
business plan. If the firm wants to achieve its objectives, the right price for its
product or service must be maintained.
 In determining the right price, the following factors must be considered:
1.customer's perception of value in the firm's kind of business;
2.costs involved such as, overhead, storage, financing, production, and distribution; and
3. profit objectives of the firm.
The firm's price may be established through any of the following methods:
1. Cost plus pricing - covers all costs, variable and fixed, plus an extra incre-ment to deliver
profit.
2. Demand pricing - is a method of pricing where the firm sets prices based onbuyer
desires. The range acceptable to the target market is determined.
3. Competitive pricing - calls for price-setting on the basis of prices charged bycompetitors.
4. Markup pricing - is a form of cost-oriented pricing in which the firm setsprices by adding
per-unit merchandise costs, operating expenses and de-sired profit.
Distribution strategy
 Distribution refers to the process of moving goods and services from the firm to the
buyers. The distribution channel that will be adapted must provide a strategic
advantage to the firm.
 Common distribution channels are the following:
1.Direct sales -is the most effective channel if the plant is to move goods directly to the
ultimate users.
2.Original equipment manufacturer sales -involves selling a manufactured product to
another manufacturer who, in turn, incorporates the same to his product and which is later sold
as a finished product to the end user .An example is the sound system incorporated into cars.
3.Manufacturer's representatives -are wholesalers employed by one or several producers and
paid on commission according to quantity sold.
4.Wholesalers- are channel members that sell to retailers or other agents for further
distribution through the channel until they reach the final users.
5.Brokers-are distributors who buy directly from distributors or wholesalers and sell to retailers
or end users.
6.Retailers-sell directly to consumers.
7.Direct mails-are printed materials used in a targeted campaign to consumers. These are sent
directly to consumers. These include catalogs, letters, e-mail, and other direct appeals.
Promotion strategy
 How the company's products or services will be promoted is an important component of the
marketing strategy. The promotion strategy must include the following:
1.Advertising aspects:
a. advertising budget;
b. positioning message; and
c. first year's media schedule.
2.Packaging-describes how the company's products will be packaged.
3.Public relations - will be a detailed presentation of the publicity strategy of the firm. This
will include a list of media that will be tapped to convey the firm's message to the target
market. The schedule of special events like product launching will also be included.
4.Sales promotions - are means used to support the sales message like special sales,
coupons; contests, premium awards, trade-in, among others.
5.Personal sales -present the sales strategy including:
a. pricing procedures;
b. rules on returns and adjustments;
c. methods of sales presentations;
d. generation of leads;
e. policies on customer services;
f. compensation of salesmen; and
g. responsibilities of the salesmen.
 ANALYSIS OF COMPETITION
 The small business operator (or the entrepreneur) will find it difficult to
compete if his competitors are unknown to him. This makes it necessary to
make an analysis of the competitors.
 In competitive analysis, the following must be determined:
1. strengths and weaknesses of the firm's competitors;
2. strategies that will give the firm a competitive advantage;
3. barriers that can be developed to prevent competitors or would-be competitors
from exploiting the firm's market; and
4. any opportunity that can be exploited.
The competitors of any business may either be or both direct and/or indirect.
-A direct competitor offers a similar product. For example, Nescafe is a direct
competitor of Kopiko Coffee. Both will cater to the same target market.
An indirect competitor will take away sales from a company in an indirect
manner. For instance, RC Cola is an indirect competitor of Great Taste Coffee.
In the effective business strategy, the entrepreneur
ensure to have a comparative strengths and
weaknesses

Asset/skills Our company Competitor A Competitor B

Superior S W S
product
Good business W S W
location
Strong sales W S S
team
Strong financial s w w
capacity