THE TOOTH FAIRY January 2002 This sample marketing plan has been made available to users of Marketing Plan Prom marketing planning software published by Palo Alto Software. Names, locations and numbers may have been changed and substantial portions of text may have been omitted from the original plan to preserve confidentiality and proprietary information You are welcome to use this plan as a starting point to create your own but you do not have permission to reproduce publish distribute or even copy this plan as it exists here equests for reprints academic use, and other dissemination of this sample plan should be emailedtothemarketingdepartmentofPaloAltoSoftwareatmarketing@paloalto.com.For productinformationvisitourWebsitewww.paloalto.comorcall1-800-229-7526 Copyright Palo Alto Software, Inc. 1998-2002
January 2002 This sample marketing plan has been made available to users of Marketing Plan Pro™, marketing planning software published by Palo Alto Software. Names, locations and numbers may have been changed, and substantial portions of text may have been omitted from the original plan to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to reproduce, publish, distribute or even copy this plan as it exists here. Requests for reprints, academic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright Palo Alto Software, Inc., 1998-2002
Confidentiality Agreement The undersigned reader acknowledges that the information provided by in this marketing plan is confidential; therefore reader agrees not to disclose it without the express written permission of It is acknowledged by reader that information to be furnished in this marketing plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to Upon request this document is to be immediately returned to Signature or printed Date This is a marketing plan. It does not imply an offering of securities
Confidentiality Agreement The undersigned reader acknowledges that the information provided by _________________________ in this marketing plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _________________________. It is acknowledged by reader that information to be furnished in this marketing plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to ________________________. Upon request, this document is to be immediately returned to _________________________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a marketing plan. It does not imply an offering of securities
Table of contents 1.0 Executive Summary 2.0 Situation Analysis 2.1 Market Summary 2.1.1 Market Demographics 2.1.2 Market Needs 2.1.3 Market Trends 2.1. 4 Market Growth 2. 2 SWOT Analysis 2.2.1 Strengths 2.2.2 Weaknesses 2.3 Competition and buying Patterns 334566666677 2.4 Services 2.5 Keys to Success 2.6 Critical issues 3.0 Marketing Strategy 8 3.1 Mission 3.2 Marketing Objectives 8 3.3 Financial Objectives 3.4 Target Marketing 3.5 Positioning 3.7 Marketing mix 10 3.8 Marketing Research 10 4.0 Financials, Budgets, and Forecasts 4.1 Break-even Analysis ales forecast 4.3 Expense Forecast 5.0 Controls ,14 5.1 Implementation Milestones 5.2 Marketing Organization 15 5.3 Contingency Planning
Table Of Contents 1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.0 Situation Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2.1 Market Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2.1.1 Market Demographics . . . . . . . . . . . . . . . . . . . . . 3 2.1.2 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1.3 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . 4 2.1.4 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . 5 2.2 SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.1 Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.2 Weaknesses . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.3 Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.2.4 Threats . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 2.3 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . 6 2.4 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.5 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 2.6 Critical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.4 Target Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.6 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.0 Financials, Budgets, and Forecasts . . . . . . . . . . . . . . . . . . . . . . 10 4.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.2 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 5.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.1 Implementation Milestones . . . . . . . . . . . . . . . . . . . . . . . 14 5.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . 15
The Tooth Fairy 1.0 Executive Summary The Tooth Fairy is the dentistry practice of Steve Extractor. The Tooth Fairy will offer general dentistry and the finest cosmetic dentistry in the area to the citizens of Hampton, virginia Through a combination of industry benchmarked customer service and flexibility The Tooth Fairy will quickly gain market share. The general dentistry practice will be used to generate initial cash flow as steve develops branding for his enhancement services Over time, the percentage of business will shift from general maintenance to cosmetic dentistry The cosmetic practice is desired because it services wealthier clients who are not dependent on insurance plans. The specialized cosmetics also allow Steve to make a more visible and appreciated mpact on people s orthodontia Steve will leverage the years he spent in private practice to model his new business. His past experience in conjunction with his forward looking customer-centric business model will allow him to rapidly grow a large and loyal patient base. profitability will be reached by month 10, and sales will reach $349, 888 by the end of year two 2.0 Situation Analysis The Tooth Fairy is entering its first year of business. Steve recognizes that marketing is critical for Tooth Fairy to gain market share and develop a large, sustainable customer base. The basic market need that Steve will serve is a flexible, customer-centric dentistry practice, providing cutting-edge cosmetic enhancements
1.0 Executive Summary The Tooth Fairy is the dentistry practice of Steve Extractor. The Tooth Fairy will offer general dentistry, and the finest cosmetic dentistry in the area, to the citizens of Hampton, Virginia. Through a combination of industry benchmarked customer service and flexibility, The Tooth Fairy will quickly gain market share. The general dentistry practice will be used to generate initial cash flow as Steve develops branding for his enhancement services. Over time, the percentage of business will shift from general maintenance to cosmetic dentistry. The cosmetic practice is desired because it services wealthier clients who are not dependent on insurance plans. The specialized cosmetics also allow Steve to make a more visible and appreciated impact on people's orthodontia. Steve will leverage the years he spent in private practice to model his new business. His past experience in conjunction with his forward looking, customer-centric business model will allow him to rapidly grow a large and loyal patient base. Profitability will be reached by month 10, and sales will reach $349,888 by the end of year two. 2.0 Situation Analysis The Tooth Fairy is entering its first year of business. Steve recognizes that marketing is critical for The Tooth Fairy to gain market share and develop a large, sustainable customer base. The basic market need that Steve will serve is a flexible, customer-centric dentistry practice, providing cutting-edge cosmetic enhancements. The Tooth Fairy Page 1
The Tooth Fairy 2.1 Market Summary The Tooth Fairy possesses good information about its market. It knows a great deal about the ommon attributes of the prized customers. this information will be leveraged to better understand who is served, their specific needs, and how The Tooth Fairy can better communicate with them Target Markets Adults enters able 2.1: Target Market Forecast
2.1 Market Summary The Tooth Fairy possesses good information about its market. It knows a great deal about the common attributes of the prized customers. This information will be leveraged to better understand who is served, their specific needs, and how The Tooth Fairy can better communicate with them. Adults Seniors Target Markets Table 2.1: Target Market Forecast The Tooth Fairy Page 2
The Tooth Fairy 2.1.1 Market demographics The profile for The Tooth Fairy,s customer consists of the following geographic, demographic, and behavior factor Geographics The geographic target is the city of Hampton, virginia with a population of 210, 000 a 30 mile area is in need of the services The total targeted population is 36, 095 Demographics Primarily female(62%0) The adult' s range in age from 27-76 Have at least $45, 000 in income 36% are professionals 54% are live-at-home parents The seniors have over $50,000 in household income Behavior Factors Are concerned about their appearance Finally feel comfortable with spending money on themselves as opposed to their family The seniors are ready to live life to its fullest, minor disappointments no longer get them Table 2.1.1: Target Market Analysi Target Market Analysis Market Segments Characteristic Characteristic Characteristic 2.1.2 Market Needs The Tooth Fairy is providing its customers with general dental maintenance as well as a wide selection of cosmetic enhancements. Flexibility of the service offerings will allow The Tooth Fairy to gain market share. The following benefits are important to the targeted customers Selection: Customers appreciate a wide range of choices of enhancements Flexibility: a wide range of business hours helps accommodate people's varying schedules Customer Service: The Tooth Fairy will facilitate equality through superior customer service where all of the needs of the patient are met including providing the patient with much information they need about the procedures for them to feel completely at ease in the Dr's presence
2.1.1 Market Demographics The profile for The Tooth Fairy's customer consists of the following geographic, demographic, and behavior factors. Geographics • The geographic target is the city of Hampton, Virginia with a population of 210,000. • A 30 mile area is in need of the services. • The total targeted population is 36,095. Demographics • Primarily female (62%). • The adult's range in age from 27-76. • Have at least $45,000 in income. • 36% are professionals. • 54% are live-at-home parents. • The seniors have over $50,000 in household income. Behavior Factors • Are concerned about their appearance. • Finally feel comfortable with spending money on themselves as opposed to their family. • The seniors are ready to live life to its fullest, minor disappointments no longer get them down. Table 2.1.1: Target Market Analysis Target Market Analysis Market Segments Characteristic Characteristic Characteristic Characteristic Characteristic Adults ----- Seniors ----- 2.1.2 Market Needs The Tooth Fairy is providing its customers with general dental maintenance as well as a wide selection of cosmetic enhancements. Flexibility of the service offerings will allow The Tooth Fairy to gain market share. The following benefits are important to the targeted customers. • Selection: Customers appreciate a wide range of choices of enhancements. • Flexibility: A wide range of business hours helps accommodate people's varying schedules. • Customer Service: The Tooth Fairy will facilitate equality through superior customer service where all of the needs of the patient are met, including providing the patient with as much information they need about the procedures for them to feel completely at ease in the Dr.'s presence. The Tooth Fairy Page 3
The Tooth Fairy 2.1.3 Market Trends The marketing trend for dentistry is movement toward elective procedures. The major impetus for this trend can be explained by the insurance industry. as the health care industry continues to have costs spiraling upwards, the physicians are getting squeezed as the allowable amount of imbursement from the insurance companies continues to decrease. This creates a fertile environment for elective procedures that do not rely on reimbursement from the insurance company. the doctors are paid directly by the clients Market Forecast 60,000 50.000 30.00 Adults enters 20,000 10.000 2002 2004 2006
2.1.3 Market Trends The marketing trend for dentistry is movement toward elective procedures. The major impetus for this trend can be explained by the insurance industry. As the health care industry continues to have costs spiraling upwards, the physicians are getting squeezed as the allowable amount of reimbursement from the insurance companies continues to decrease. This creates a fertile environment for elective procedures that do not rely on reimbursement from the insurance company. The doctors are paid directly by the clients. 0 10,000 20,000 30,000 40,000 50,000 60,000 2002 2003 2004 2005 2006 Adults Seniors Market Forecast The Tooth Fairy Page 4
The Tooth Fairy 2.1.4 Market Growth In 2000, the market for cosmetic dental enhancements reached $765 million in sales. As technology continues to increase, new procedures come to fruition, more people are served, costs come down, and improvements occur due to gains in experience and technology. the entire market is forecasted to grow at 7% for the next four years Technology is the main driver for this growth. Within the last five years there has been an increase in research and development and this has yielded significant gains for the industry. Another driver of market growth is the continual increase in the gNP. while many reasonably believe that this is not the best indicator of individual wealth within a country, the gnp has been rising, more so within the last decade. This has provided more people with the ability to afford elective dental enhancements The dental industry is following a trend away from general maintenance toward cosmetics. The reason for this is that there is less rampant decay of teeth today relative to five to 10 years ago, so dentists are concentrating on areas where there is increased demand Please note that The Tooth Fairy ' s growth rate is higher than the industry average. This can be explained by the fact that steve is concentrating on an emerging niche he is basically starting a practice from ground zero so higher than average growth rates can be expected Target Market Growth 8.00% 4.00% 2.00% 100% Adults
2.1.4 Market Growth In 2000, the market for cosmetic dental enhancements reached $765 million in sales. As technology continues to increase, new procedures come to fruition, more people are served, costs come down, and improvements occur due to gains in experience and technology. The entire market is forecasted to grow at 7% for the next four years. Technology is the main driver for this growth. Within the last five years there has been an increase in research and development and this has yielded significant gains for the industry. Another driver of market growth is the continual increase in the GNP. While many reasonably believe that this is not the best indicator of individual wealth within a country, the GNP has been rising, more so within the last decade. This has provided more people with the ability to afford elective dental enhancements. The dental industry is following a trend away from general maintenance toward cosmetics. The reason for this is that there is less rampant decay of teeth today relative to five to 10 years ago, so dentists are concentrating on areas where there is increased demand. Please note that The Tooth Fairy's growth rate is higher than the industry average. This can be explained by the fact that Steve is concentrating on an emerging niche. He is basically starting a practice from ground zero so higher than average growth rates can be expected. 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% Adults Seniors Target Market Growth The Tooth Fairy Page 5
The Tooth Fairy 2.2 SWOT Analysis The following SWoT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing The Tooth Fairy. 2.2.1 Strengths strong skill set necessary for the procedures Well trained support staff A sophisticated training program that breeds the customer-centric model into the company culture 2.2.2 Weaknesses Weak cash flow for the first year while steve tries to build a foundation for his cosmetic pr The inexperience of running a business The difficulty of building brand as a start-up organization 2.2.3 Opportunities Participation in a growing market 2.2.4 Threats Possibility of large increases for malpractice insurance. this could be a function of the individual dentist or a trend within the industry Increased competition as procedures become more popular 2.3 Competition and Buying Patterns The Generalist: This type of dentist has a practice centered on general maintenance and does not specialize in anything in particular The Specialist: This type of dentist will have a general practice but in addition to the general practice, they have an area that they specialize in such as cosmetics. The buying patterns of patients are based on referrals and trust
2.2 SWOT Analysis The following SWOT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing The Tooth Fairy. 2.2.1 Strengths • A strong skill set necessary for the procedures. • Well trained support staff. • A sophisticated training program that breeds the customer-centric model into the company culture. 2.2.2 Weaknesses • Weak cash flow for the first year while Steve tries to build a foundation for his cosmetic practice. • The inexperience of running a business. • The difficulty of building brand as a start-up organization. 2.2.3 Opportunities • Participation in a growing market. • Increased margins as Steve's skill increases and procedure times decrease. 2.2.4 Threats • Possibility of large increases for malpractice insurance. This could be a function of the individual dentist or a trend within the industry. • Increased competition as procedures become more popular. 2.3 Competition and Buying Patterns • The Generalist: This type of dentist has a practice centered on general maintenance and does not specialize in anything in particular. • The Specialist: This type of dentist will have a general practice, but in addition to the general practice, they have an area that they specialize in, such as cosmetics. The buying patterns of patients are based on referrals and trust. The Tooth Fairy Page 6
The Tooth Fairy Table 2. 3: Growth and Share Analysis Growth and Share Competitor Price Growth Rate Market Share Competitor Competitor Competitor Competitor 0.00% 0.00% 2.4 Services The Tooth Fairy provides both general improvements consisting primarily of cleaning and fillings as well as cosmetics improvements. The cost for cleanings is around $100, at specific intervals x-rays need to be taken and that will increase the cost. The cost for fillings ranges significantly depending on the material used. Dr. Extractor will be deriving the majority of revenue from cosmetics by the end of the year. Cosmetics can be classified into three main areas Teeth Whitening: There are several reasons for stained teeth including: age, antibiotics excess fluoride illness, and certain beverage consumption. Teeth whitening removes the from an impression taken at the office. a bleaching tray is made from this impression anl o discoloration and restores the original whiteness. Dr. Extractor is currently using a state-of- art home treatment. The home treatment begins with a casting of the patient's teeth ma the Dr. then provides the patient with all the necessary instructions and material to accomplish the whitening at home. Costs are around $300 Veneers: These are porcelain shells that are bonded to the front of the teeth they reshape the tooth and make the tooth whiter in color. The costs of veneers range from $600-800 per tooth Gap Removal: This procedure uses tooth-colored plastic that is bonded to places where there should be tooth material. the removal of gaps makes a significant improvement to a smile. the cost for gap removal ranges from $300-$1000 The Tooth Fairy will be billing customers at a per procedure rate. Only a portion of the cosmetics will be billed to an insurance company, with individuals paying the variance 2.5 Keys to Success The keys to success are Customer service Flexibility Skill Page 7
Table 2.3: Growth and Share Analysis Growth and Share Competitor Price Growth Rate Market Share Competitor $0 0% 0% Competitor $0 0% 0% Competitor $0 0% 0% Competitor $0 0% 0% Competitor $0 0% 0% Other $0 0% 0% Average $0.00 0.00% 0.00% Total $0.00 0.00% 0.00% 2.4 Services The Tooth Fairy provides both general improvements consisting primarily of cleaning and fillings as well as cosmetics improvements. The cost for cleanings is around $100, at specific intervals x-rays need to be taken and that will increase the cost. The cost for fillings ranges significantly depending on the material used. Dr. Extractor will be deriving the majority of revenue from cosmetics by the end of the year. Cosmetics can be classified into three main areas: • Teeth Whitening: There are several reasons for stained teeth including: age, antibiotics, excess fluoride, illness, and certain beverage consumption. Teeth whitening removes the discoloration and restores the original whiteness. Dr. Extractor is currently using a state-ofart home treatment. The home treatment begins with a casting of the patient's teeth made from an impression taken at the office. A bleaching tray is made from this impression and the Dr. then provides the patient with all the necessary instructions and material to accomplish the whitening at home. Costs are around $300. • Veneers: These are porcelain shells that are bonded to the front of the teeth. They reshape the tooth and make the tooth whiter in color. The costs of veneers range from $600-800 per tooth. • Gap Removal: This procedure uses tooth-colored plastic that is bonded to places where there should be tooth material. The removal of gaps makes a significant improvement to a smile. The cost for gap removal ranges from $300-$1000. The Tooth Fairy will be billing customers at a per procedure rate. Only a portion of the cosmetics will be billed to an insurance company, with individuals paying the variance. 2.5 Keys to Success The keys to success are: • Customer service. • Flexibility. • Skill. The Tooth Fairy Page 7