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Use this section to profile target markets based on market sizes, segments, trends, competition and user/customer profiles. Allow about three-six pages for this most important part of your plan.

In most cases, it is very desirable that all detailed market research (field and/or desk) and analysis be completed before this section is written. If research reports or detailed findings are available, refer to their detailed findings in appendices or include them as annexes to the plan.

This is a very difficult section to prepare especially for start-ups or established businesses diversifying in new (to them) markets. These difficulties will be compounded, due to an absence of any reliable data or evidence of likely demand, for businesses entering completely new markets or launching radically new offerings. Nonetheless, this section is critical as it underpins the business plan and demonstrates that the promoters have done their homework and know their marketplaces (at least as well as the incumbent players or other new entrants). If this section is unclear, vague or superficial, it begs the question as to whether there might be any real, sustainable demand for the proposed offerings.

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6.1. Market Analyses

Describe the markets in which your business operates and/or plans to enter.

Explain how these markets have evolved and are segmented (in terms of price, quality, channel of distribution etc.). Indicate how and why the markets and key segments will develop over the life of your plan, or even longer.

Use simple tables and charts to illustrate key points and to drill down into the appropriate detail. Place detailed analyses in an appendix. Here is an example of a simple table projecting the size of key segments within an overall market :

Highlight the segments you are targeting. Explain their channels of distribution, promotional methods used and expenditure levels.

Discuss product and technology trends.

Review any regulatory restrictions on trade and the role the imports.

Indicate the likely impact of any possible changes in anticipated economic conditions.

Finally, explain why the target markets are attractive to your business.

6.2. Competition

Introduce the main competitors (or near-competitors if a new market area) and profile them - highlight their evolution, scale and activities. Assess their SWOTs. Place detailed information in appendices.

Show how competitors' market shares may have evolved and indicate their current standing in the market.

6.3. Customers/Users

Segment possible customers/users based on their demographics/needs. Review their buying habits and consider the impact of broad economic issues on the frequency and levels of their purchasing.

Profile customers/users and explain how/why they will buy your products/services in preference to those of competitors. Discuss price, quality, promotional, distribution channel issues etc. and how your offerings will be positioned.

Quantify the number of prospective customers/users and assess their likely consumption/ purchase rates (e.g. amount/year, amount/purchase, purchases/year and so on) for your offerings and the competition.

6.4. Market Size, Sales & Share Forecasts

Create simple tables to show how market sizes, segments and shares are likely to move in the future after your entry/growth. If possible, base the forecasts on volume and price projections rather than on revenues. Incorporate your business's high-level sales projections in these tables but hold back on detailed projections until the next section - 7. Marketing Strategies, Sales Plans & Projections.

Try to avoid generalized statements like "we aim to achieve xx% of the xx market within three years". Instead, build up your projections from sound analysis/research and detailed assumptions (number of outlets, customers, consumption and so on). You can then explain that the projections, if realized, could result in specified market shares.

Consider providing alternative projections based on "best" and "worst" case scenarios which might reflect alternative views of future economic, competitive conditions and rates of progress.

Additional Help
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The Quick Insight software package is an expert system for evaluating business proposals. It could help assess your position relative to competition and identify possible strategies. The more powerful and sophisticated Business Insight will allow you to explore your market position and analyze the competition in considerable detail as a precursor to devising and testing possible marketing strategies.

The Plan Write Market Planner is very suitable for developing a detailed marketing plan to complement a business plan.

Note that the Plan Write Business Planner and Plan Write Expert Planner* both contain extensive sections devoted to the marketing aspects of a business plan.

* The Plan Write Expert Planner is effectively an integrated combination of Quick Insight and Plan Write Business Planner.

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