Lesson 3: Business Plan Contents – Target Customers, Value Proposition, Market, and Product Offering

Target Customers

A target market refers to a well-defined customer segment that a business aims to serve within its market.

How to Define a Market?

1. Segment the Market – Divide the market based on demographics, geography, psychographics, and behavioral patterns.

2. Identify the Unique Selling Proposition (USP) – The USP is what differentiates a product from competitors and makes it more appealing.

3. Analyze the Customer Base – Review existing customers' preferences and behaviors to refine the target market.

4. Analyze Competitors' Customer Base – Study competitors’ target audience and decide whether to attract the same market or differentiate.

Value Proposition

The value proposition refers to the benefits and worth that a business promises to deliver to its customers if they choose its product or service.

Why a Strong Value Proposition Matters?

• Differentiates the business from competitors.

• Attracts and retains customers.

• Increases market share in targeted segments.

• Enhances operational efficiency and revenue.

• Ensures consistency in company messaging.

A successful value proposition should be communicated clearly through a business's website, advertisements, or other marketing channels.

Product and/or Service Offering

This section of the business plan highlights the quality, value, and advantages of a company’s products or services.

Key Elements of a Product/Service Offering:

1. Description – A brief explanation of the products or services.

2. Pricing – Proposed prices for products or services.

3. Differentiation – How the product/service differs from competitors.

4. Marketing Strategies – Plans for promotion and distribution.

5. Order Fulfillment – The process of handling customer orders.

6. Legal Considerations – Intellectual property, trademarks, or necessary permits.

7. Future Offerings – Plans for new products or services.

This section is considered the heart of the business plan, as all other aspects of the plan should align with the product and service offerings.

Key Business Plan Questions

1. Why is it important to specify target customers?

   • Helps focus marketing efforts and maximize resources.

2. Why should products or services be described in detail?

   • Ensures customers understand their value and differentiators.

3. What factors determine product/service pricing?

   • Production costs, market demand, competitor pricing, and perceived value.

4. Why is a strong value proposition important?

   • It helps a business stand out and attract loyal customers.

5. Why analyze competitors when developing a product?

   • Understanding competitors helps identify market gaps and potential improvements.