Marketing: analysis & understanding
Product Description Worksheet
In earlier sessions, you sketched a rough outline of your product. Now, you should know enough to describe your product more clearly and in greater detail, with a stronger emphasis on how it satisfies customer wants and needs. (Remember: The term “products” refers to services, too.)
Answer the following questions about your product. If you have multiple products, make multiple copies of these worksheets. When you’ve filled out the worksheets for each product, compare your descriptions and consider grouping similar products into product lines.
1.	Briefly, what is your product?
2.	What is your product’s stage of development (concept, prototype or currently in production)? Is it a new product, or an expansion of an existing product line?
3.	What problem does your product solve for customers? How does it help or benefit them?
Product Description Worksheet—continued
4.	What makes your product unique or special?
5.	How does your product compare to competing products (quality, materials, etc.)?
6.	What stage of the product life cycle is your product currently in (introduction, growth, maturity, decline)? Is it likely to remain in this stage over the next three years?
7.	Is demand for your product seasonal, or do people buy it year-round? If seasonal, explain.
8.	Will you make the product yourself, buy it wholesale or have someone else make it? Will you make products for inventory or per order? -OR- How will you deliver your service? Will you do all the work yourself, or assign some of it to employees or subcontractors?
9.	What enhancements, warranties or customer service features will you offer along with your product? How do they distinguish you from your competitors?
10.	[For services only] Can you deliver on your promises to your customers? Are your qualifications and skills equal to, or better than, those of your competition? Explain.
11.	List any intellectual property rights (patents, trademarks, copyrights) that add value to your product.
12.	Will you offer other products or services? If so, when? What are they?
Features and Benefits Worksheet
Answer the questions below for each product or service you plan to offer.
1.	List the features of your product, and then list the benefits of each feature. (You can identify features and benefits for individual products or for a product line.)
PRODUCT:
Features (quality, materials, etc.) | Benefits (what does the feature do?)
2.	How do you know that your target customers value these benefits?
Customer Analysis Worksheets
The Market Analysis section of your plan analyzes your customers and competitors in detail. This allows you to make a realistic estimate of your market potential, based on your current trade area, market size, market trends and projected annual sales volume.
It’s critical to analyze who your customers are, how much and how often they buy from you, and why they will do business with you rather than your competitors.
Individual Customers
Personal characteristics of your customers are called demographics. Common demographics include:
Gender	Men and women have different buying habits.
Age	Different age ranges have different buying habits.
Income	Income level tells you whether a customer or household has the financial ability to buy your product, especially if it’s a nonessential item (e.g., jewelry).
Occupation	Occupation relates to age, income and education, and may indicate customers’ ability to buy.
Location	This includes how near the customer is to your business, as well as regional or national location, geography, climate and weather.
Marital status	Customers’ needs and desires vary based on whether they’re single or married.
Children	Households with children have very different buying habits than those with no children.
Education	Education may be an indicator of reading comprehension, use of technology, income, etc.
Ethnic origin	People from different cultures may have different values and needs that influence buying habits.
Values, lifestyles and attitudes that motivate people to buy are called psychographics. These include:
Beliefs / values	Cultural, religious and political beliefs and values have a strong influence on buying decisions.
Behavior	What are your target customers’ spending patterns and buying behavior?
Interests	How do your customers’ hobbies, pastimes and social causes affect their buying behavior?
Media choices	Media choices not only provide a clue to buying decisions, income and education, but they also tell you what kind of promotions are most likely to succeed.
Recreation	People who like outdoor activities such as camping or hiking may have different needs than people who prefer indoor activities such as videogames or scrapbooking.
Transportation	People who have a car, bicycle, motorcycle, RV or boat may have very different buying habits.
Entertainment	Music, movie, book and art preferences tell marketers a lot about lifestyles and attitudes, and help them make the right advertising decisions.
Customer Analysis Worksheets—continued
Use this worksheet to profile at least two customer segments. Customer Group A should be the one you think is the strongest market for your product. This is your primary customer group.
Individual Customer Analysis Worksheet
Demographics | Group A Primary Customers | Group B Secondary Customers
Gender (male, female, both)
Age (range)
Income level (range)
Occupation (blue collar, professional)
Location (local, national, international)
Marital status (single, married)
Children
Education level
Ethnic origin
Other:
Psychographics
Where do they shop (malls, boutiques, farmers’ markets, online)?
When do they shop (a.m., p.m., holidays, weekends, summer, winter)?
Why do they buy (wants, needs)?
How do they shop (in person, over the phone, online)?
What beliefs, attitudes and values influence their buying decisions?
Which media do they prefer?
What are their interests and hobbies?
What entertainment do they prefer?
Other:
Expectations
What do buyers expect from products like yours?
If you will market your product to other businesses, use the following worksheet to research your customers. Otherwise, skip ahead to Question 1.
Business Customer Analysis Worksheet
Characteristics | Wholesale Customers |  |  | Retail Customers
| A | B | C | A | B | C
Annual sales
Number of employees
Location (town, region, country)
One site, or multiple branches?
Who handles purchasing?
Where do they get product information?
Procedures for buying?
What do they expect from your product?
Prequalification requirements
Other:
Other:
1.	Where did you get the above information about your customers? Explain your research methods and cite your sources.
2.	Based on this research, which of the features and benefits you identified in the previous exercises are most important to your target customers? Explain.
Competitive Analysis Worksheet
Use the worksheet on the next page to compare your business to at least three major competitors. Be honest; look for your competitors’ strengths as well as their weaknesses. Consider the following issues:
Product	How well do their products solve customer problems and meet customer needs? Do they personalize their products and services for individual customers?
Quality	How high is their quality? Where do they source raw materials?
Selection	How many choices do they offer? How wide and deep is their product line?
Price	Do their prices match customers’ expectations and assessment of value?
Selling	Are sales methods effective, polite, ethical, efficient and informative?
Credit policy	Do customers have various ways to pay for purchases (e.g., store credit, credit card, layaway)?
Availability	How quickly do customers get products or receive service? Do they have to wait? How long?
Distribution	How does the business deliver products or provide services to customers? Does it sell to retailers and distributors? What service options are available? What’s the cost?
Service	How well do they meet customers’ need for attention and knowledgeable assistance? Are customer problems fixed quickly and to the customer’s satisfaction? Is the staff well trained? What are their hours of operation?
Expertise	Are owners and staff knowledgeable about their products? Do they answer questions well? What special skills and qualifications do they have?
Reliability	How dependable are their products? Do they require frequent repair or replacement? Does the business meet expectations and keep its promises?
Reputation	What is the business’s reputation in the area? In the region? Nationally? Online?
Location	Where is the business? Are there multiple locations? How well do the accessibility, visibility, signage and convenience of the competitor’s location meet customer needs?
Merchandising	Is merchandise stocked in a manner that makes shopping easy and convenient? Are products displayed attractively and in an organized way?
Technology	How do they use technology to promote, sell and deliver products and services?
Web presence	Does the business have a strong online presence? Is their website easy to find, navigate and use on a variety of devices? Do they have good online reviews? Do they have a social media following?
Brand	Do they have a strong brand? How well does the appearance of their product, store, website, vehicles and personnel match customer expectations? What is their brand image?
Advertising	Where, how often and to whom does the business advertise? Is it effective?
Green features	Do they promote themselves as a green business? Do they have green certification or eco-labels?
Stability	Has this business been open long enough to prove it has staying power?
Sales volume	What’s the business’s estimated annual sales volume?
Identify your three major competitors and write their names in the spaces below. Rank yourself and your competitors honestly for each factor on a scale of 1 to 4, where 1 is best and 4 is worst. Write NA (not applicable) if the factor doesn’t apply to your business or your competitor. This process may require you to visit or call competitors and ask the questions that a normal customer would.
Last, estimate how much of a priority each factor is to your target customers. Write high, moderate or low for the level of priority, based on your current understanding of your target customers.
Factors | Your Company | Competitor A  ___________ | Competitor B ____________ | Competitor C ____________ | Priority
Product
Quality
Selection
Price
Selling
Credit policy
Availability
Distribution
Service
Expertise
Reliability
Reputation
Location
Merchandising
Technology
Web presence
Brand
Advertising
Green features
Sales volume
Other:
Competitive Analysis Worksheet—continued
Now, answer the following questions based on your worksheet research.
1.	Who are your strongest competitors, and where are they located? (Close to your business? In another state? Overseas?) Is their location a strength or a weakness?
2.	How well do your strongest competitors’ products meet consumer needs? What other strengths and weaknesses do they have? How do you know this?
3.	What technological advantages and disadvantages do your competitors have?
4.	How do their prices compare to yours? Are they lower or higher? Why?
5.	Go back to the chart on page 4-71, and look at the areas where you ranked 1 or 2. What are your key competitive advantages? How will your products better meet the needs and wants of your customers? What can you do better than your competitors?
6.	Now, note any factors with “high” and “moderate” priority where you ranked 3 or 4. List changes you can make to improve your competitive position.
7.	Looking again at the worksheet, did you identify any customer priorities your competitors aren’t meeting? If so, how will you meet these needs?
Market Potential Worksheet
Once you’ve identified your target customers, you need to find out if there are enough of them to make your business idea viable. Census data, maps and assessor office statistics can help you.
1.	What is the geographic territory of your trade area? List all cities, ZIP codes, states and counties. (Consider including a map of the area in the Appendix.)
2.	How many people (or businesses) in this geographic area are in your target market? (Review your Customer Profile Worksheet. You’ll probably have to do some more research, using census data or other resources.)
3.	Is the size of your target market growing, staying the same or getting smaller? Why? (Discuss the trend.)
4.	How many members of your target market do you expect to buy your product per year? (You’ll need to calculate a percentage from your response to Question 2.) How did you estimate this amount?
5.	What is the average dollar amount each customer will spend per year on your products? How did you estimate this amount?
6.	What are the primary monthly expenses for your business?
Rent/utilities			_______
Inventory/raw materials	_______
Equipment 			_______
Web hosting/Internet 	_______
Employees’ salary		_______
Owners’ draw (salary) 	_______
Vehicle/gas			_______
Office supplies/postage	_______
Other				_______
Total per year			_______
7.	How many products can you produce—or units of service can you deliver—per year? How did you estimate this amount?
8.	What barriers to entry affect your ability to compete in this market? How will you overcome them?
9.	Now, you’re ready to estimate your annual sales amount. This will give you a first look at whether your business can generate enough sales to be worth pursuing. Use the Annual Sales Volume Projection Worksheet below, and remember to be realistic in your estimates.
A. | Number of customers who will buy from you each year (answer from question 4):
B. | Average amount each customer will spend each year (answer from question 5):
C. | Total estimated sales amount each year (multiply A x B)
D. | Estimated basic expenses each year (total from question 6)
E. | Difference between sales and expenses (subtract C - D)
Is Line E a positive number or a negative one? It should be positive, because your estimated sales should exceed your estimated expenses. If it’s negative, what can you do (if anything) to fix this? Are you satisfied with these initial findings? Do you think it’s worthwhile to move forward? If not, do you have another idea that seems worthwhile? If so, repeat the analysis above with your new business idea.

Worksheets Assignment for Session 5
You will need to research, complete and review all of the Session 4 worksheets before trying to write the Products and Services and Market Analysis sections of your business plan.
Writing Your Business Plan
Use the information from this session to write the sections of the NxLeveL® Business Plan shown below. Start with the headings and subheadings just as they are shown here. Then, follow the instructions in italics under each subheading. Section IV. Marketing Plan A. Products and Services Product Description Review the Product Description Worksheet. Describe the types of products you sell, and identify their stage in the product life cycle. Include everything a first-time reader needs to know about your product. Features and Benefits Review the Features and Benefits Worksheet. Summarize the features and benefits of your products. Explain what features make them unique and special. Then, describe the benefits of each feature. B. Market Analysis Customer Analysis Based on the Customer Analysis Worksheets—and your Customer Profile Worksheet from Session 1—describe your target markets. Include demographic and psychographic characteristics and motivations for buying. If you’re targeting more than one, explain why you chose each. Competitive Analysis Based on the Competitive Analysis Worksheet, identify and briefly describe your major competitors. State where they are located and explain whether their location is a strength or weakness. Summarize your competitors’ other strengths and weaknesses. Last, explain your competitive advantage. Market Potential Based on the Market Potential Worksheet, describe your geographic trade area and explain why customers within it will do business with you. Describe the number of potential customers. Summarize the trends for this market, including whether it is growing, stable or declining. Identify any barriers to entry. Then, present your annual sales volume projection as calculated in Question 9.