QUICK-LAUNCH BUSINESS PLAN
AUDIO TRANSCRIPTION
SEGMENT 1D

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	As we enter the marketing mix, here's what we're looking at trying to 
identify at least four key product or service characteristics.  If you look at 
Anna's jewelry e-Bay sales business plan, you can see that we've identified key 
issues about the product or the service.
 
		We want to identify four key primary customer characteristics.  They're 
in college.  They're female.  They're professionals. They 
are on the run, busy and so need e-Bay.  They like unique pieces. 

		 The secondary customers are international in nature and want to 
display their worldliness.

		Some of this we're assuming, and we're learning from the feasibility 
study that we did.  Feasibility studies are very important.  We learned very 
early on was one of the best ways to test feasibility is to go sell some 
products.  In Anna's case, which is an amalgam of different businesses so we didn't 
betry any confidences, we went out and tested sales both on e-Bay and 
through flea markets.  We also did some research by talking with people who had 
similar businesses.  We learned how to do on e-Bay as well. So that we could offer
advice on this.  

	There are many components to figuring out the marketing and the proper product placement.
I have a picture up there of a Barbie doll. There's a very interesting history behind Barbie. 
I think it's one of the world's top selling children's toys internationally.
  
		I think there's at least one Barbie doll sold like every ten seconds 
in the world, even today, for as long as it's been around.  The 
woman who started Barbie was watching TV and noticed that children's toys were 
being marketed to adults.  Logically it made sense that adults are the ones who 
are making the purchases.  They have the money.
  
		She thought was "Wait a minute!"  The people who are influencing the 
purchaser, though, are the kids.  They are bugging Mom and Dad to buy them this 
toy. She started marketing on the Mickey Mouse Club this thing called the Barbie doll.
The commercials were designed specifically for the children who were watching the show 
and not to Mom and Dad.  Basically that turned marketing on its ear.
  
		Similarly, we found when we were getting ready to sell 
something, talking about the marketing, sales and how to put this process 
together. We tested that.  In one case, we were working on a gift basket 
business with a pet theme.  We had horse baskets, dog baskets, and cat 
baskets.
 
		We took that out in a class we were doing. We gave each team a different 
kind of basket and said, "Go downtown and find some retail spots for us.  Have the 
retailers look at the baskets and offer advice on how we might redesign them, other 
things that we might add to them."  We came back from that changing our entire thinking 
about who our market was.

		We thought our market were pet lovers.  What we found was that our 
market actually were people who were friends of pet lovers who needed a birthday 
gift or a new pet gift or a house-warming gift for a person who has pets. 

		It was a very different way that we wrote up that plan 
after that little bit of research.  That research only took a couple of hours to 
do, and it gave us a much stronger business plan.
  
		We want to look at the key characteristics of the business.  Who is 
that primary customer?  Who is the secondary customer?  How do we take care of 
both of them?

		An example I use a lot is the example of Dunkin' Donuts. Dunkin' 
Donuts has a primary customer, a person who is a commuter to work.  They have 
very little time.  They want to get in line, and they don't want to stay for 
more than a minute. They need that line to move really fast.
 
 		What are they buying?  They are buying one cup of coffee and one 
doughnut.  Dunkin' Donuts' basic primary customer is treated to real speed, 
convenience and reasonable cost.  They locate their stores so that people can 
get to them really fast and get back on the highway without much interruption.
 
		The problem is that they have a secondary customer.  That secondary 
customer who has a meeting that day and needs two dozen assorted donuts. If that person 
gets in the fast lane, slows everybody else down because they are trying to 
figure out what donuts to order, Dunkin' Donuts has just angered a whole lot of 
their customers.  Generally when customers have been angered, they don't come 
back.  They go t somebody else to buy their doughnut.
  
		So what does Dunkin' Donuts do? They have pre-selected assortments. You 
buy them by the dozen, and it only takes as long as it does to buy a single 
doughnut and a single cup of coffee.
  
		This also brings up that people don't think about how many 
sales do you have to make in a day to make a living.  Every week we get a 
proposal from somebody who wants to sell greeting cards.  It's almost always 
greeting cards one at a time.

		The profit on a greeting card usually is not over about 25 cents.  
So think about this. If you're working on a business that requires many, many 
sales a day to make a living, then have you established a business model that 
allows for that many sales?  If you need to make $12,000 a year, how many cards 
at 25 cents a piece profit, do you have to sell?
  
		How are you going to get your cards into enough places?  Think about 
all the sales calls you're going to have to make to outlets to get in there.  
It's an astounding number.

		I think that business planning helps clarify maybe how we need to change 
that model.  Maybe we need to think about how we can sell packages of a dozen 
cards at once. We can develop a series of seasonal cards or holiday cards and we 
have certain markets.  Maybe we only sell to high school fundraisers. Maybe we only 
sell to insurance companies that send out birthday cards to all of their customers 
every year.  We have to go get 12 accounts that each have 3,000 customers.

		Then we've changed our business model.  We're still selling the same 
product, but we're selling it differently.  We're making 12 sales calls instead 
of 1,000 sales calls.  	That drives your price or your cost of sales way down.
 
		Going through this process is really like a job analysis.  You're 
thinking through how does this work get done.  And does it really make sense?  
A lot of time, people get halfway through their business plan and go "You know what?  
The way I was thinking about this doesn't really make sense.  But now that I've 
written it." Writing it out does make a difference.  You're trying to order 
things logically.
  
		That's power of a business plan. Many times it makes us think 
critically about what comes first, what comes next. Is it really doable?

		We also want to describe two things that the product or service 
won't do.  The reason why we do that is not so much for planning necessarily.  
It's to see if there are some things that we're telling the customer that we 
better clarify.  For those of you who work in the developmental disability 
system, if you ask the typical person on the street "Is there a difference 
between you and the mental health center down the street?" most people on the 
street can't say that.  They can't tell you what the difference is.
  
		That's a marketing issue, especially if it's a small business.  For 
Anna's business, she isn't a retailer of diamond rings.  That's not what she 
does.  So she's not the place that a couple looking to get married would go.  
She's not the appropriate place.

		Does she need to say that?  No.  But she wants to analyze her 
marketing approaches to see "Am I about to disappoint a customer?  Have I lured 
a customer in who I'm going to have to say no to?"  We want to avoid that 
generally.  
 
		As we move on, we want to answer this question,  why will people buy 
from your business?  What makes you different?  How is it that you're going to 
attract them to you?  Why should they buy from you and not from somebody else?  
Is it because your quality is higher?

		We recommend this a lot. Is your service better?  That's 
another thing that we recommend.  Are you cheaper?  Lord knows that there's a 
place for low cost niche.  Kmart has exploited that very well and made billions 
and billions of dollars.
  
		It's not always doable, however.  Especially on a small business 
scale where you can't buy your raw materials or you can't provide the service 
faster than somebody else.  So don't automatically go to low cost niche.  It's 
not necessarily a great niche for your business.

		High customer service can work. Think about the Prado 
rule. Prado was a Spanish statistician who figured out years ago that 80% of 
your income is going to come from 20% of your customers.  Those 20% are the 
satisfied repeat customers who keep coming back and coming back.

		They don't cost you very much because you already have 
them.  You don't need to advertise, do specials or discounts for them.  They 
already like you.  They are your bread and butter.  You want to think about how 
do I get the repeat customers, if it's that kind of business.
  
		How is your business different from the competition?  
Have you looked at your competition?  Who are they?  What differentiates you?

		Probably, in every major city there are a thousand people who sell hamburgers.  
How is it that they do that?  For fast food or restaurants in general, one of 
the primary issues is not the food.  It's the location.  It's how 
convenient is it?  How close to work or how close to home is the 
restaurant?  That really drives a lot of restaurants.
 
		Restaurants that sell not on location but on high quality also 
generally are higher priced.  People will drive across the city to get an 
opportunity to eat at one of those kinds of restaurants.  That's a whole 
different market. That's a whole different marketing strategy. That has to do 
with status and with certain kinds of buyers. Not everybody is going to go to 
that restaurant.  You're looking for people with perhaps high amounts of 
disposable income who can afford $100 a night or a $100 dinner.  Think about how 
are you different from your competition.  

		How will customers find you?  What process are you going to use?  
Are you going to do radio and TV advertising? typically for small businesses,
We don't find it very effective, partly because we don't have the kind of budgets 
that allow us to get the kind of market penetration and reputation that it takes 
to get a sale those kinds of advertising techniques.
  
		What we generally use in small business is a process called listing.  You 
put your product or service information where people expect to find it.  Another 
way to look at it is that advertising is intrusive.  Advertising disrupts you.

		One of the reasons advertising on television tends to be humorous is that 
if you're  going to break into somebody's living room and interrupt his/her favorite
TV show, you better be fun to have around.  That's one of the reasons why humor 
sells so well.  Or at least that's what they tell us out of the marketing 
industry.

		Generally, advertising interrupts what you're doing.  It's intrusive.  
It's in the way.  It's that telemarketer calling you at dinnertime.  It's 
something that you don't necessarily want even though you might be interested in 
that product.  Does it work?  We don't really know.  The data from the marketing 
industry says it works.  But they are marketers, right?  They are supposed to 
tell you that it works.
  
		We find that listing works for small businesses.  That is the product
or service information is where you expect to find it. For instance, if 
you need a plumber at 3:00 o'clock in the morning, you don't go downstairs and 
turn on the TV and wait for a plumbing commercial to come on.  You open the 
Yellow Pages.  That's where you expect to find the 24-hour emergency plumbing 
service.

		Think about your product or service.  Where do I expect to find 
that?  For Anna's, there are a number of places where we expect to find jewelry.  
We expect to find it in a jewelry store in New Mexico or Arizona.  We expect to 
find it in the Old Town Market Square.  More and more we're expecting to find 
that kind of product on e-Bay.  That's where people are going to go.  And one 
person is going to tell another person.

		This is a viral marketing approach that we're expecting for 
somebody to see somebody's earring or bracelet or  necklace and go "Wow, where 
did you get that?"  They'll say, "I went to e-Bay.  And here is the 
product name or the person's name you want to look for.  You want to look for 
their e-Bay store.  You know, it's Anna's Native Arts.  Go there and look at 
what they've got. She'll take special requests.  You can e-mail her off of the 
site.  Go to her web site at such-and-such."  

That kind of buzz is what we're looking for.  That's the way most small 
businesses operate anyway.  They don't have major advertising budgets.

		 Don't think in terms necessarily of discount coupons and newspaper 
ads.  Yes, that stuff works and is important.  But a Yellow Pages ad and/or an 
ad in the Thrifty Nickel may be better for you than a TV or a radio spot.

		And word of mouth.  Any time you can get people talking about your 
business it's very important.  There are a variety of resources.  If you go to 
our book "Making Self Employment Work for People With Disabilities," published 
by Brooks Publishing, there's a whole section on marketing, sales development 
and tools that you can use to do that.  Also on our web site, griffihammis.com, 
you can find articles and examples of tools to use to help you refine your 
marketing and sales approach.

		It's important for customers to find you.  It's important to be 
networked.  Think about the last time you went to a new restaurant.  You didn't 
go there because you saw the restaurant.  You didn't go there because 
you saw their ad.  You probably went there because a friend said, "We went to 
this great restaurant the other night.  You should really go there.  You would 
really like it."
 
		So go off now and look at some of the examples.  Look at some of the 
bits that we've written about marketing in Anna's plan.  And come back ready for 
the next section after you've written your marketing plan or your marketing mix.

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