text Chapters 8 and Chapter 9 pages 257 268 275 all related powerpoints Chapters 8 and 9 business plan and mission statements videos Specialty Cheese speaker sheet on Christy Crump and case studies Rug Bug and Amy s Bread class notes the sales forecast handout also a slide on the Ch 8 Marketing Plan ppt Chapter 13 will be discussed at a later date Entrepreneurship Quiz 2 Study Guide Case Study Analysis of Amy s Bread Summary Amy s Bread founded in 1992 in Manhattan She started with a Marketing Job then moved to culinary Used her friends and family for financing By 1998 full production of 600 lbs of dough a day Mostly wholesale costumers 1998 75 were wholesale 32 employees 50 products 15 different doughs Maximum Capacity with 50 wholesale customers Ensuring consistent quality in all of her breads without becoming too mechanized Maintaining steady cash flow Amy quickly discovered that even if she sold every loaf of bread the revenue would not be enough to cover the big expenses such as her monthly lease and equipment Expansion Amy is confronted with the dilemma of whether or not to expand or remain where she is Part of the expansion issue is whether or not to search for a building with retail potential or solely wholesale production Competition the secret to financial success in the bakery business was to differentiate your breads rather than copying what everyone else made Amy Scherber High quality products Handmade Problems Solutions Expanded product line 50 items 15 types of dough Presentation Holidays Window displays Employees took great pride in serving retail customers 560 Reputation Word of mouth Advertisement Press Expansion Retail vs Wholesale Profit margin vs sales volume Gross sales 25 75 6 000 sq ft 300 000 7 500 sq ft 500 000 Benefits vs Costs Preservation of quality Recommendation Based the market from wholesalers Amy s primary focus should be to fulfilling their demands Expanding to retail should be secondary Amy should expand to the 6 000 square foot building and use it as the base for fulfilling her wholesale orders And maintain the current location for retail Streamline the baking process for the larger wholesale orders using more machines Leaving the hands on mainly for the retail operation It is very important to get the right employees for the job This is very important so you re business can run smoothly Also a business isn t just how you treat your customers but a huge part of it is how you treat your employees Without happy employees the business will not be successful because they will not want to come in to work Learned Amy s Bread Today Amy s has expanded to include three different locations each maintaining the charming welcoming atmosphere as the original location The locations include the original spot located in the Hell s Kitchen district on Ninth Avenue a location in the bustling Chelsea Market which is an indoor market that is one city block long and was formerly the Nabisco Oreo factory and finally Amy s newest store which is located in the Village in a cozy neighborhood Today Amy s Bread has over 150 employees and 200 wholesale deliveries daily Amy s bread today now has three retail locations and over 150 employees They do 200 whole sale deliveries a day and One location is open late to satisfy people with late night craves Chapter 8 The Marketing Plan Industry Analysis It provides sufficient knowledge of the environment that can affect marketing strategy decision making Information can be gathered through secondary sources and market research The entrepreneur can begin to understand competitors strengths and weaknesses provides insight into how to position products or services Competitor Analysis Document current strategies of primary competitors Information can be utilized to formulate the market positioning strategy This analysis provides a solid basis for marketing decision making Marketing Research for the New Venture Step One Defining the Purpose or Objectives Make a list of the information that will be needed to prepare the marketing plan Step Two Gathering Data from Secondary Sources Secondary sources can include trade magazines newspaper articles libraries government agencies the Internet and commercial data Step Three Gathering Information from Primary Sources Data collection procedures Observation networking interviewing focus groups and experimentation Data collection instrument Questionnaire Table 8 3 A Comparison of Survey Methods Step Four Analyzing and Interpreting the Results Results can be tabulated by hand or on a computer Evaluated and interpreted should be based on research objectives Cross tabulated data can provide more focused results Understanding the Marketing Plan Marketing plan A written statement of marketing objectives strategies and activities to be followed in business plan It is designed to provide answers to three basic questions Where have we been Where do we want to go in the short term How do we get there Characteristics of a Marketing Plan A marketing plan should Provide a strategy Be based on facts assumptions Describe an organization for implementation Provide for short term and long term continuity Be simple and short Be flexible Specify criteria for control Figure 8 1 The Marketing System A combination of product price promotion and distribution and other marketing activities needed to meet marketing objectives The Marketing Mix Steps in Preparing the Marketing Plan Defining the Business Situation Situation analysis Describes past and present business achievements of new venture In case of a new venture information should relate to how and why the product or service was developed After a new venture has started up information should relate to Present market conditions Performance of the company s goods and services Future opportunities or prospects Defining the Target Market Opportunities and Threats The target market is specific group of potential customers toward which the venture aims its marketing plan Market segmentation Dividing a market into definable and measurable groups for purposes of targeting marketing strategy Process of segmenting and targeting customers Decide on general market or industry to pursue Divide market into smaller groups based on Characteristics of the customer Geographic demographic and psychographic Buying situation Desired benefits usage buying conditions and awareness of buying intention Select segment or segments to target Develop a marketing plan integrating product