CRANIUM FILAMENT REDUCTIONS January 2002 This sample marketing plan has been made available to users of Marketing Plan Pro m, 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 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 7 3.1 Mission 3.2 Marketing Objectives 3.3 Financial Objectives 3.4 Target Marketing 8889 3.5 Positioning 3.7 Marketing mix 10 3.8 Marketing Research 10 4.0 Financials, Budgets, and Forecasts 4.1 Break-even Analysis 10 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 3.4 Target Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 4.3 Expense Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 5.0 Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 5.1 Implementation Milestones . . . . . . . . . . . . . . . . . . . . . . . 14 5.2 Marketing Organization . . . . . . . . . . . . . . . . . . . . . . . . . 15 5.3 Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . 15
Cranium Filament Reductions 1.0 Executive Summary Cranium Filament Reductions is a hair salon located in shaker Hts. ohio that allows the entire family to have their hair needs satisfied in one convenient location. Cranium serves men, women, and children and accepts appointments as well as walk-ins. Cranium also sells retail hair care products. Cranium is able to serve the entire family in one quick, convenient visit. While there are many "quick salons"like Cranium, Cranium will excel due to its attention to detail regarding customer service. Through unheralded customer attention, Cranium will slowly but surely gain market share as it services the entire family creating long-term relationships. Lastly Cranium's location will allow it to attract a lot of walk in traffic After month four, sales will grow steadily for Cranium. Profitability will be reached by month nine and $443, 000 in revenue will be earned during year three with $61, 000 in profits. Annual Sales Forecast s600000 s500000 s400000 s200,000 Retail hair care products s100000 22十2十2n千
1.0 Executive Summary Cranium Filament Reductions is a hair salon located in Shaker Hts., Ohio that allows the entire family to have their hair needs satisfied in one convenient location. Cranium serves men, women, and children and accepts appointments as well as walk-ins. Cranium also sells retail hair care products. Cranium is able to serve the entire family in one quick, convenient visit. While there are many "quick salons" like Cranium, Cranium will excel due to its attention to detail regarding customer service. Through unheralded customer attention, Cranium will slowly but surely gain market share as it services the entire family, creating long-term relationships. Lastly Cranium's location will allow it to attract a lot of walk in traffic. After month four, sales will grow steadily for Cranium. Profitability will be reached by month nine and $443,000 in revenue will be earned during year three with $61,000 in profits. $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 2002 2003 2004 Males Females Women with young children Retail hair care products Annual Sales Forecast Cranium Filament Reductions Page 1
Cranium Filament Reductions 2.0 Situation Analysis Cranium Filament Reductions is in its first year of business as a start-up company. Cranium recognizes the fact that a comprehensive, strategic marketing plan is required to ensure profitability and success. Cranium offers a wide range of hair cutting services. The market need is or a one-stop, convenient hair salon that is skilled and reasonably priced serving the entire 2.1 Market Summary Cranium Filament Reductions possess good information about the market and knows a great deal about the common attributes of its most prized customers. Cranium will leverage this information to understand who is served their specific needs, and how Cranium can better serve them Target Markets Mothers w/children Table 2.1: Target Market Forecast Target Market Forecast Potential Customers Growth 2002 2004 CAGR 64,157 900% Females 1000% Mothers w/children 23.400 27,802 9.00% 9.27% l15,166 125,839 9.27%
2.0 Situation Analysis Cranium Filament Reductions is in its first year of business as a start-up company. Cranium recognizes the fact that a comprehensive, strategic marketing plan is required to ensure profitability and success. Cranium offers a wide range of hair cutting services. The market need is for a one-stop, convenient, hair salon that is skilled and reasonably priced, serving the entire family. 2.1 Market Summary Cranium Filament Reductions possess good information about the market and knows a great deal about the common attributes of its most prized customers. Cranium will leverage this information to understand who is served, their specific needs, and how Cranium can better serve them. Males Females Mothers w/children Target Markets Table 2.1: Target Market Forecast Target Market Forecast Potential Customers Growth 2002 2003 2004 2005 2006 CAGR Males 9% 54,000 58,860 64,157 69,931 76,225 9.00% Females 10% 28,000 30,800 33,880 37,268 40,995 10.00% Mothers w/children 9% 23,400 25,506 27,802 30,304 33,031 9.00% Total 9.27% 105,400 115,166 125,839 137,503 150,251 9.27% Cranium Filament Reductions Page 2
Cranium Filament Reductions 2.1.1 Market demographics The profile for Cranium Filament Reductions consists of the following geographic, demographic, and behavior factors Geographics The immediate geographic target is the city of shaker Hts. and the surrounding communities with a total population of 112,000 A 20 mile geographic radius is in need of the offered services he total targeted population is 46,000 Demographics Male, female, and children Ages 3-55 The women are individuals who are concerned about getting quality hair cuts/styling but are unwilling to pay the exorbitant charges associated with women-only hair salons The men are concerned about getting a reasonably priced, convenient haircut The children do not have any major preferences other than having toys to play with while they wait. Have an individual income of at least $30, 000 Behavior Factors Are always on the lookout for convenience factors in regards to service provider Attempt to get all of the family's needs serviced at the same time if possible 2.1.2 Market Needs Cranium Filament Reductions is providing families with a one-stop option for providing a wide range of hair cutting/styling options. Cranium seeks to provide the following benefits that are important to its customers Convenience: Cranium can serve the entire family with no appointment necessary Additionally, Cranium's storefront is in a centrally located area Customer Service: Serving the customer with superior attention is what the employees are trained to provide Competitive Pricing: Cranium offers pricing that is a bit more than a traditional barber but far less than a dedicated women 's hair salon
2.1.1 Market Demographics The profile for Cranium Filament Reductions consists of the following geographic, demographic, and behavior factors: Geographics • The immediate geographic target is the city of Shaker Hts. and the surrounding communities with a total population of 112,000. • A 20 mile geographic radius is in need of the offered services. • The total targeted population is 46,000. Demographics • Male, female, and children. • Ages 3-55. • The women are individuals who are concerned about getting quality hair cuts/styling, but are unwilling to pay the exorbitant charges associated with women-only hair salons. • The men are concerned about getting a reasonably priced, convenient, haircut. • The children do not have any major preferences other than having toys to play with while they wait. • Have an individual income of at least $30,000. Behavior Factors • Are always on the lookout for convenience factors in regards to service providers. • Attempt to get all of the family's needs serviced at the same time if possible. 2.1.2 Market Needs Cranium Filament Reductions is providing families with a one-stop option for providing a wide range of hair cutting/styling options. Cranium seeks to provide the following benefits that are important to its customers: • Convenience: Cranium can serve the entire family with no appointment necessary. Additionally, Cranium's storefront is in a centrally located area. • Customer Service: Serving the customer with superior attention is what the employees are trained to provide. • Competitive Pricing: Cranium offers pricing that is a bit more than a traditional barber but far less than a dedicated women's hair salon. Cranium Filament Reductions Page 3
Cranium Filament Reductions 2.1.3 Market Trends The market trend for the hair cutting industry is one of consolidation Consolidation can be seen with the high-end hair salons as well as the full-service, full-family companies such as Best Cuts. Over the last five years there have been an expansion of upscale chain salons in major metropolitan areas. the expansion takes the form of opening new stores as well as purchasing independently-owned salons and transferring them over to the chain. Additionally this trend has occurred with the full-service family hair cutting stores Cranium is not participating in this trend of aligning itself with a chain. cranium believes that it has better insight to its local market ar ld rather apply this specialized insight instead of adopting the procedures of a national chain Market Forecast 160000 140000 120000 100000 Males Mothers w/children 40000 2005
2.1.3 Market Trends The market trend for the hair cutting industry is one of consolidation. Consolidation can be seen with the high-end hair salons as well as the full-service, full-family companies such as Best Cuts. Over the last five years there have been an expansion of upscale chain salons in major metropolitan areas. The expansion takes the form of opening new stores, as well as purchasing independently-owned salons and transferring them over to the chain. Additionally, this trend has occurred with the full-service, family hair cutting stores. The reason for this trend is similar to other industries that are consolidating; cost saving measures. Cranium is not participating in this trend of aligning itself with a chain. Cranium believes that it has better insight to its local market and would rather apply this specialized insight to its market instead of adopting the procedures of a national chain. 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 2002 2003 2004 2005 2006 Males Females Mothers w/children Market Forecast Cranium Filament Reductions Page 4
Cranium Filament Reductions 2.1.4 Market Growth For the last seven years the hair cutting industry has grown steadily at 5% a year. the industry is generally unaffected by economic uptur downturns. While in upturns, women are more likely to purchase extra services such as hair coloring or perms although generally the consumption pattern is unchanged this is somewhat intuitive as most people need and get a haircut based on an elapsed amount of time independent of the economic environment that they are in Target Market Growth 8.00% Males I Mothers w/children
2.1.4 Market Growth For the last seven years the hair cutting industry has grown steadily at 5% a year. The industry is generally unaffected by economic upturns or downturns. While in upturns, women are more likely to purchase extra services such as hair coloring or perms, although generally the consumption pattern is unchanged. This is somewhat intuitive as most people need and get a haircut based on an elapsed amount of time, independent of the economic environment that they are in. 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% Males Females Mothers w/children Target Market Growth Cranium Filament Reductions Page 5
Cranium Filament Reductions 2.2 SWOT Analysis The following SWoT analysis captures the key strengths and weaknesses within the company and describes the opportunities and threats facing Cranium Filament Reductions 2.2.1 Strengths Excellent retail space in a well-traveled mall Well-trained employees with good hair cutting skills with a wide style repertoire, and customer-focused business practices A wide range of services offered Competitive prices 2.2.2 Weaknesses As a new entrant to the market Cranium lacks brand equity that many of its competitors have earned over years of service. The struggle to appear continually on the edge in terms of fashion and style 2.2.3 Opportunities a steady growing market that is traditionally unaffected by the economic environment The ability to decrease marginal fixed costs as the customer base grows Increasing sales opportunities as more people from an individual family frequents Cranium 2.2.4 Threats Competition from already established chains a change in traffic patterns as they relate to the mall where Cranium is located 2.3 Competition and Buying Patterns Cranium Filament Reductions competitors include 1. Traditional Barbers: They rarely serve appointments, it is generally a walk-in service While barbers are usually willing to provide whatever cut you are interested in, they are generally providing straight-forward haircuts, typically on the conservative side. The advantages are an inexpensive service that is easy to use. Their disadvantages are an often conservative styling capacity, sometimes a long wait 2. Franchised"Quick Salons": An example of this would be Supercuts or Best Cuts. In essence, this is a franchised version of Cranium Filament Reductions. The advantage of this style is the store is the same from location to location and some people like this predictability 3. Independent salons: These shops typically focus on a specific niche and do not serve a wide group of customers The buying patterns of men and women are quite different typically men are more price or
2.2 SWOT Analysis The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing Cranium Filament Reductions. 2.2.1 Strengths • Excellent retail space in a well-traveled mall. • Well-trained employees with good hair cutting skills with a wide style repertoire, and customer-focused business practices. • A wide range of services offered. • Competitive prices. 2.2.2 Weaknesses • As a new entrant to the market, Cranium lacks brand equity that many of its competitors have earned over years of service. • The struggle to appear continually on the edge in terms of fashion and style. • Large costs associated with a start-up company. 2.2.3 Opportunities • A steady growing market that is traditionally unaffected by the economic environment. • The ability to decrease marginal fixed costs as the customer base grows. • Increasing sales opportunities as more people from an individual family frequents Cranium. 2.2.4 Threats • Competition from already established chains. • A change in traffic patterns as they relate to the mall where Cranium is located. 2.3 Competition and Buying Patterns Cranium Filament Reductions' competitors include: 1. Traditional Barbers: They rarely serve appointments, it is generally a walk-in service. While barbers are usually willing to provide whatever cut you are interested in, they are generally providing straight-forward haircuts, typically on the conservative side. The advantages are an inexpensive service that is easy to use. Their disadvantages are an often conservative styling capacity, sometimes a long wait. 2. Franchised "Quick Salons": An example of this would be Supercuts or Best Cuts. In essence, this is a franchised version of Cranium Filament Reductions. The advantage of this style is the store is the same from location to location and some people like this predictability. 3. Independent Salons: These shops typically focus on a specific niche and do not serve a wide group of customers. The buying patterns of men and women are quite different. Typically men are more price or Cranium Filament Reductions Page 6
Cranium Filament Reductions convenience sensitive. Men typically care less about the task of getting their haircut. For them whatever is easiest works best. Women are more concerned with hair styling and tend to bond more with their stylists. This bond creates loyalty to their stylist. Once a stylist has earned their trust they are more willing to blindly put their hair in the stylists hands. 2. 4 Services Cranium Filament Reductions provides hair styling for the entire family. this includes haircuts for men and women, permanents and hair coloring for women, as well as haircuts for children Shampoos will be offered for all adult services. Service is offered on a walk in basis or by appointment. Cranium Filament Reductions will emphasize a customer-centric service where the customers needs are always the priority Cranium Filament Reductions will also sell hair care products that are forecasted to account for 15% of sales. These professional quality supplies will include shampoos, conditioners, reconstructors, brushes, combs and other styling aids 2.5 Keys to Success Keys to success include Professional 2.6 Critical Issues Cranium Filament Reductions is still in the speculative stages as a start-up company. Its critical issues are to continue to take a modest fiscal approach; expand at a reasonable rate not for the sake of expansion in itself but because it makes prudent fiscal sense to 3.0 Marketing Strategy Cranium Filament Reductions will have a somewhat limited marketing budget. The main reason for this will be because some of the money that would otherwise be spent on marketing efforts will be used for rent by choosing a well-traveled popular mall to locate Cranium in, it will receive a lot of walk through traffic. The cost of having this location takes the form of higher than normal rent Part of the high cost of rent is just an expense if you want to locate a shop in a popular commercial property. Some of the money also goes to mall association dues. The money for the mall dues goes to marketing activities that are designed to increase visibility and traffic for the mall as a whole The money from the marketing budget will be spent on the following marketing initiatives Advertisements: Advertisements will be placed in two different local newspapers, the plain Dealer and the Sun Press. The plain Dealer serves the entire Cleveland metropolitan area Not all of the readers will be willing to travel across Cleveland to go to Cranium, however, large percentage of people in Cleveland subscribe to the plain Dealer, therefore it is a good investment to increase visibility the Sun Press is a more regional paper serving Shaker Hts, Cleveland Hts. University Hts. and Warrensville Hts. while the reader base of the Page 7
convenience sensitive. Men typically care less about the task of getting their haircut. For them whatever is easiest works best. Women are more concerned with hair styling and tend to bond more with their stylists. This bond creates loyalty to their stylist. Once a stylist has earned their trust they are more willing to blindly put their hair in the stylists hands. 2.4 Services Cranium Filament Reductions provides hair styling for the entire family. This includes haircuts for men and women, permanents and hair coloring for women, as well as haircuts for children. Shampoos will be offered for all adult services. Service is offered on a walk in basis or by appointment. Cranium Filament Reductions will emphasize a customer-centric service where the customer's needs are always the priority. Cranium Filament Reductions will also sell hair care products that are forecasted to account for 15% of sales. These professional quality supplies will include shampoos, conditioners, reconstructors, brushes, combs, and other styling aids. 2.5 Keys to Success Keys to success include: • Professionalism. • Convenience. • Customer attention. 2.6 Critical Issues Cranium Filament Reductions is still in the speculative stages as a start-up company. Its critical issues are to continue to take a modest fiscal approach; expand at a reasonable rate, not for the sake of expansion in itself, but because it makes prudent fiscal sense to. 3.0 Marketing Strategy Cranium Filament Reductions will have a somewhat limited marketing budget. The main reason for this will be because some of the money that would otherwise be spent on marketing efforts will be used for rent. By choosing a well-traveled, popular mall to locate Cranium in, it will receive a lot of walk through traffic. The cost of having this location takes the form of higher than normal rent. Part of the high cost of rent is just an expense if you want to locate a shop in a popular commercial property. Some of the money also goes to mall association dues. The money for the mall dues goes to marketing activities that are designed to increase visibility and traffic for the mall as a whole. The money from the marketing budget will be spent on the following marketing initiatives: • Advertisements: Advertisements will be placed in two different local newspapers, the Plain Dealer and the Sun Press. The Plain Dealer serves the entire Cleveland metropolitan area. Not all of the readers will be willing to travel across Cleveland to go to Cranium, however, a large percentage of people in Cleveland subscribe to the Plain Dealer, therefore it is a good investment to increase visibility. The Sun Press is a more regional paper serving Shaker Hts., Cleveland Hts., University Hts., and Warrensville Hts. While the reader base of the Cranium Filament Reductions Page 7
