Principle of MARKETING

MARKETING ENVIRONMENT
➢ IN ORDER FOR THE MARKETING PROCESS TO OCCUR, CRITERIA MUST BE MET. AND THIS IS
THE EXISTENCE OF AT LEAST TWO OR MORE PARTIES A) UNSATISFIED NEEDS AND WANTS; B)
THE DESIRE TO SATISFY THOSE NEEDS AND WANTS; AND C) SOMETHING FOR EXCHANGE.

MARKETING DEPARTMENT
POTENTIAL CUSTOMER
IDEAS ABOUT THE NEED
THE 4PS
➢ THE TARGET CONSISTS OF TWO CONCEPTS FOR THE MARKETING MIX; THE 4PS AND THE
7PS. THE 4PS ARE CONCEPTS THAT WERE PROPOSED BY E. JEROME MCCARTHY AND ARE
USED IN THE PRODUCT INDUSTRY

1. PRODUCT – THIS REFERS TO THE ACTUAL GOOD AND SERVICE, HOW IT RELATES TO THE
END-USER’S NEEDS AND WANTS.

2. PRICE – THIS IS REFERS TO THE PROCESS OF SETTING A PRICE FOR A PRODUCT

INCLUDING DISCOUNTS. THE PRICE NEED NOT BE MONETARY. IT CAN SIMPLU BE WHAT IS
EXCHANGE FOR THE PRODUCT OR SERVICE, E.G TIME, OR ATTENTION

3. PROMOTION – THIS IS REFERS TO THE COMMUNICATION BETWEEN THE SELLER AND THE
CONSUMERS, FOR EXAMPLE; ADVERTISING, SALES PORMOTION, PUBLICITY, AND PERSONAL
SELLING. THIS ALSO REFERS TO THE VARIOUS METHODS OF PROMOTING THE PRODUCT,
BRAND OR COMPANY.

4. PLACEMENT OR DISTRIBUTION – THIS IS REFERS TO THE PROCESS OF HOW THE PRODUCT

GETS TO THE CUSTOMER; EXAMPLE, POINT OF SALES OF PLACEMENT OR RETAILING.

THE ADDITIONAL 3PS

➢ PEOPLE – THESE ARE THE EMPLOYEES, CUSTOMERS OR THOSE WHO ARE DIRECTLY OR
INDIRECTLY INVOLVED IN CONSUMING OR PRODUCING THE GOODS OR SERVICES. FOR
INSTANCE, THE COMPANY MAY RECRUIT OR TRAIN STAFF IN DELIVERING THE GOODS OR
SERVICES IT OFFERS.

➢ PHYSICAL EVIDENCE. THIS CAN BE THE FACILITY DESIGN, EQUIPMENT OR SINGAGE. FOR
EXAMPLE, WHEN WALKING IN A HOTEL, A CUSTOMER EXPECTS TO FIND THE PREMISES
CLEAN, THE PLACE COZY AND THE STAFF FRIENDLY.

➢ PROCESS – THIS IS THE FLOW OF ACTIVITIES OR STEPS AND LEVEL OF CUSTOMERS’

INVOLVEMENT. FOR EXAMPLE; A CUSTOMER CAN WALK IN A FAST-FOOD SHOP AND ORDER A
HAMBURGER AND GET IT SERVED WITHIN TWO MINUTES.
NATURE OF MARKETING MIX

ASSESS CONSUMER’S NEED.  SATISFY THE CONSUMER’S NEED IN TERMS OF; PRODUCT, PROMOTION, AND PLACE

PERCEIVED NEED ↓

POTENTIAL CONSUMER POTENTIAL TARGET MARKET

TYPES OF MARKET COMPETITION
➢ PURE COMPETITION - ALSO KNOWN AS PERFECT COMPETITION. IN THIS TYPE,
THERE ARE MANY BUYERS AND SELLERS TRADING IN A UNIFORM COMMODITY.
EXAMPLES WHEAT, VEGETABLES, ETC.

➢ MONOPOLISTIC COMPETITION - A COMPETITION WHERE MANY BUYES AND

SELLERS TRADE OVER A RANGE OF PRICES, AS DO THE TWO CURRENT LEADING
FAST-FOOD CHAINS IN THE LAND.

➢ OLIGOPOLISTIC COMPETITION - A KIND OF COMPETITION WITH ONLY FEW SELLERS

WHO ARE HIGHLY SENSITIVE TO EACH OTHER’S PRCING AND MARKETING
STRATEGIES. FOR EXAMPLE, ARE THE TWO LOCAL AIRLINES THAT COMPETE IN
OFFERING LOW FARES OR THE SO-CALLED PROMO FARES.

➢ PURE MONOPOLY - A MARKET THAT CONSISTS OF ONE SELLER WITH NO CLOSE

COMPETITION OR ALTERNATIVE SUBSTITUTE. MERALCO OR MANILA ELECTRIC
COMPANY IS AN EXAMPLE.

EVOLUTION OF MARKETING
➢ IN EVERY PRODUCT AND SERVICE IN THE MARKET, THERE ARE FACTORS THAT
CHANGE OVER TIME. ONE IS POSITIONING, A TECHNIQUE OR STRATEGY USED BY
THE MARKETERS TO CREATE AN IMAGE FOR A PRODUCT. SECOND IS MARKET
SHARE, A PORTION OF THE SALES OF A PRODUCT THAT IS CONTROLLED BY A
COMPANY. LASTLY ARE THE COMPETITORS WHO MAY OR MAY NOT OFFER THE SAME
BRAND OF PRODUCTS OR SERVICES, BUT MAKE THE EFFORT OF GAINING A BIGGER
MARKET SHARE.

Below is the discussion of how a product and service pass through the life cycle in the
marketing arena.
➢ STAGE 1: PRODUCT CONCEPT – IN THIS CONCEPT, COMPANIES THAT ARE GUIDED BY THIS
PHILOSOPHY BELIEVE THAT CONSUMERS FAVOR PRODUCTS THAT OFFER THE HIGHEST
QUALITY, ARE HIGHLY ENGINEERED AND ARE CONSIDERED MOST INNOVATIVE PRODUCTS.
➢ STAGE 2: PRODUCT CONCEPT – THIS CONCEPT IS ABOUT HOW COMPANIES BELIEVE THAT
CONSUMERS FAVOR THE PRODUCTS OR GOODS THAT ARE WIDELY AVAILABLE AND ARE
HIGHLY AFFORDABLE.
➢ STAGE 3: SELLING CONCEPT – THIS CONCEPT REFERS TO A COMPANY’S BELIEF THAT
CONSUMERS WILL NOT BUY ENOUGH PRODUCTS UNLESS THE COMPANY OR ORGANIZATION
UNDERTAKES LARGE SELLING AND PROMOTIONAL EFFECT.
➢ STAGE 4: MARKETING CONCEPT – THIS CONCEPT REFERS TO ACHIEVING THE GOAL OF
THE ORGANIZATION BASED ON THE NEEDS AND WANTS OF THE TARGET MARKET AND IN THE
DELIVERY OF THE GOODS OR SERVICES TO THE SATISFACTION OF THE SAID TARGET
MARKET, IN A WAY BETTER THAN COMPETITORS.
➢ STAGE 5: SOCIETAL MARKETING CONCEPT – THIS IS SIMILAR TO MARKETING CONCEPT IN
THE SENSE OF THAT THE ORGANIZATION MUST ALSO DETERMINE THE NEEDS AND WANTS
AND THE INTERESTS OF THE TARGET MARKET; AND THAT AFTER DETERMINATION OF SUCH
NEEDS AND WANTS, TO DELIVER THE DESIRED SATISFACTION BETTER THAN THE
COMPETITORS WITH THE GOAL OF MAINTINING THE SOCIETY’S WELL-BEING.

MARKETING ETHICS AND SOCIAL RESPONSIBILITY

➢ IN MARKETING, ETHICS AND SOCIAL RESPONSIBILITY PLAY AN IMPORTANT ROLE.
➢ ETHICS – IS THE STUDY OF MORAL PRINCIPLES WHICH ARE GUIDED BY SOCIETAL NORMS
OR MORALS. IF AN ACT IS NOT ACCEPTED BY THE SOCIETY, IT IS DEEMED TO BE AN
UNETHICAL ACT.

➢ SOCIAL RESPONSIBILITY MUST BE INJECTED TO MARKETING. THE MARKETER MUST BE

RESPONSIBLE NOT ONLY TO ITS STAKEHOLDERS BUT ALSO TO EMPLOYEES, CUSTOMERS,
SUPPLIERS, COMMUNITY AND THE GOVERNMENT.

➢ THE CONCEPT OF SOCIAL RESPONSINBILITY HAS BEEN PART OF THE DAILY DISCUSSION
BOTH IN BUSINESS AND IN THE ACADEME, WITH THE LOGICAL CONSUMPTION THAT THE FIRM
IS CREATED BY THE SOCIETY AND THAT THE BUSINESS RESPONSIBILITY IS TO AID THE
SOCIETY’S GOAL.

➢ IN ADDITION, IT WAS STRESSED THAT MARKETERS MUST BE AWARE OF ETHICAL

STANDARDS AND ACCEPTABLE BEHAVIOR. THIS AWARENESS MEANS THAT MARKETERS MUST
RECOGNIZE THE VIEW POINTS OF THREE KEY PLAYERS:

• COMPANY

• INDUSTRY

• SOCIETY

➢ THE ABOVE KEY PLAYERS HAVE DIFFERENT NEEDS AND WANTS RESPECTIVELY;
THEREFORE, CONFLICT NORMALLY ARISES. THESE ETHICAL CONFLICTS ARISE IN TWO
DIFFERENT SITUATIONS • WHEN THERE IS A DIFFERENCE BETWEEN THE NEEDS OF THE
THREE AFOREMENTIONED GROUPS (THE COMPANY, INDUSTRY, AND SOCIETY)

• WHEN ONE’S PERSONAL VALUES CONFLICT WITH THE ORGANIZATION

CASELET
CHICKEN X IS A FOOD CHAIN KNOWN FOR ITS CHICKEN BBQ AND WAS THE FIRST INTRODUCE ITS SPECIALTY IN THE
COUNTRY. ITS MANAGEMENT WAS ABLE TO CONCEPTUALIZE ON THIS IDEA – THAT FILIPINOS LOVE EATING
CHICKEN. THE CONCEPT OF TRADITIONAL EATING WITH HANDS AND RICE WRAPPED IN BANANA LEAVES WAS THE
STRIONG POINT OF CHICKEN X. IT WAS SO SUCCESSFUL THAT IT HAS EXPANDED TO NUMEROUS BRANCES
NATIONWIDE.

BECAUSE OF THIS SUCCESS, BURGER BEE, ANOTHER RESTAUTANT/FOOD CHAIN KNOWN FOR
ITS BURGER AND CRISPY CHICKEN ACQUIRED OWNERSHIP OF CHICKEN X. BURGER BEE
ACQUIRED 70% OWNERSHIP OF CHICKEN X THAT WILL ADD ABOUT 5% TO ITS SALES, 5% TO
ITS REVENUE AND 7% TO ITS OPERATING INCOME. IT IS EXPECTED THAT THE DEAL WILL ALSO
INCREASE THE NUMBER OF STORES OF BURGER BEE 16% BOTH LOCALLY AND
INTERNATIONALLY.
QUESTION:
1. IF YOU WERE THE OWNER OF BURGER BEE, WHAT WOULD BE YOUR MAIN OBJECTIVE FOR
ACQUIRING CHICKEN X?

Entrepreneur
THE BUSINESS GOALS: VISION, MISSION, OBJECTIVES, AND PERFORMANCE TARGETS
THE BUSINESS GOALS SHOW THE FUTURE AND LONG-TERM PROSPECTS OF THE
ENTERPRISE. IT IS COMPOSED OF THE VISION, MISSION, OBJECTIVES, KEY RESULTS AREAS,
AND PERFORMANCE INDICATORS OF THE ENTERPRISE. TO ILLUSTRATE, LET US EXAMPLE
THE VISION OF DOUBLE HAPPINESS. DOUBLE HAPPINESS IS AN EATERY IN BUS TERMINAL. IT
HAS THREE OUTLETS LOCATED AT THE BUS TERMINALS IN CENTRAL LUZON.
 • THE VISION OF DOUBLE HAPPINESS IS “TO ESTABLISH A COMMANDING PRESENCE
AND MARKET LEADERSHIP AS A FOOD CHAIN SERVICING MAJOR BUS TERMINALS IN CENTRAL
LUZON WITHIN THE NEXT FIVE YEARS.

• THE BUSINESS GOALS ARE COMMUNICATED BY ARTICULATING THE BASIC PURPOSE

OF SETTING UP THE ENTERPRISE IN A MISSION STATEMENT. NEEDLESS TO SAY, ALL
BUSINESS ENTERPRISES ARE ESTABLISHED FOR THE PURPOSE OF MAKING MONEY FOR ITS
INVESTORS.

• FOR DOUBLE HAPPINESS, ITS MISSION STATEMENT IS “TO PROVIDE QUALITY

FOOD AND PASSENGER CONVENIENCE SERVICES THAT WOULD GENERATE SUFFICIENT
PROFITS FOR THE STOCKHOLDERS AND IMPROVE THE LIVES OF ITS EMPLOYEES.

• THE VISION AND THE MISSION STATEMENTS MUST THEN BE TRANSLATED INTO
MEASURABLE END RESULTS, MORE POPULARLY CALLED OBJECTIVES.

OBJECTIVES MUST BE MORE SPECIFIC THAN THE VISION AND MISSION STATEMENTS. THEY
SHOULD BE MEASURABLE, ACHIEVABLE AND TIME-BOUND
• FOR DOUBLE HAPPINESS THEIR STATED OBJECTIVES ARE:

1. TO ESTABLISH A STRONG MARKET PRESENCE IN CENTRAL LUZON

2. TO EARN GOOD FINANCIAL RETURNS TO ITS OWNERS:

3. TO DELIGHT CUSTOMERS WITH HIGHLY QUALITY FOOD AND SERVICES; AND

4. TO MAKE DOUBLE HAPPINESS A HAPPY AND REWARDING PLACE TO WORK IN.

THE OBJECTIVES SHOULD THEN BE TRANSLATED INTO KEY RESULT AREAS OR KRAs. KRAs ARE THE
QUALITATIVE MANIFESTATIONS THAT THE OBJECTIVES ARE BEING ACHIEVED.
IN CASE OF DOUBLE HAPPINESS, THE KEY RESULT AREAS FOR EACH OF THE OBJECTIVES ARE AS FOLLOWS:
in the case of double happiness, the performance indicators for each of the key results are as follows:

EXECUTIVE SUMMARY
➢ THE EXECUTIVE SUMMARY CONTAINS EVERYTHING THAT IS RELEVANT AND IMPORTANT TO
THE BUSINESS AUDIENCE. IT IS A SYNTHESIS OF THE ENTIRE PLAN. IT MUST CONTAIN THE
MAJOR ARGUMENTATIONS OF THE BUSINESS PROPONENT ON WHY THE BUSINESS WILL
WORK AND SUCCEED.
➢ IT SHOULE PROVIDE THE BUSINESS PLAN AUDIENCE ALL THE ARGUMENTS ON WHY THEY
SHOULD PARTICIPATE IN BUSINESS VENTURE.

THE EXECUTIVE SUMMARY SHOULD THEN INTRODUCE AND HIGHLIGHT THE GOOD QUALITIES
OF:
1. THE BUSINESS PROPONENTS AND THEIR PARTNERS;

2. THE ENTERPRISE ORGANIZATION AND ITS CAPABILITIES

3. THE TECHNOLOGY PROVIDERS AND THEIR EXPERTISE AND EXPERIENCE; AND

4. THE SUPPLIERS AND ALL THE MAJOR SERVICE PROVIDERS

 IT SHOULD LIKEWISE DESCRIBE THE PRODUCTS/SERVICES OF THE ENTERPRISE,

THEIR FEATURES AND ATTRIBUTES, AND WHY THEY ARE THE RIGHT ONES TO DELIVER
TO THE CUSTOMERS.
 THE EXECUTIVE SUMMARY SHOULD THEN PROCEED TO DISCUSS AND JUSTIFY THE
ENTERPRISE STRATEGY AND ENTERPRISE DELIVERY SYSTEM. THE ENTERPRISE
STRATEGY BUILDS AND DEVELOPS THE GAME PLAN FOR ATTAINING
COMPETITIVENESS. THE ENTERPRISE DELIVERY SYSTEM IS THE ENTIRE PROCESS OF
CONVERTING INPUT(RESOURCES) INTO OUTPUT AND THESE OUTPUT INTO
OUTCOMES.
  IT SHOULD THEN RENDER ALL THE MAJOR INSTITUTIONAL, MARKET, OPERATIONS,
AND ORGANIZATIONAL STRATEGIES PREVIOUSLY CITED INTO FINANCIAL STRATEGIES
AND FORECASTS.
 INVESTMENT REQUIREMENTS SHOULD BE PRESENTED ALONG WITH THE SUMMARIES OF THE
PROJECTED INCOME STATEMENTS, BALANCE SHEET, CASH FLOWS, AND FUNDS FLOW, AND
THEIR ANALYSES AND CONCLUSIONS. YIELDS AND RETURNS, ALONG WITH RISKS AND
CONTINGENCY MEASURES, SHOULD ROUND UP THIS SECTION.
 THE EXECUTIVE SUMMARY SHOULD ALSO CONTAIN A SECTION ON THE
ENVIRONMENTAL AND REGULATORY COMPLIANCE OF THE PROPOSED BUSINESS, AS
WELL AS THE MORE PROACTIVE PROGRAMS TO BECOME A MORE RESPONSIBLE
CORPORATE CITIZEN.
 FINALLY, THE EXECUTIVE SUMMARY SHOULD PRESENT THE CAPITAL STRUCTURE OF THE
PROPOSED BUSINESS AND SHOW HOW THIS STRUCTURE WILL RESPOND TO THE INVESTMENT
PROGRAMS AND FINANCIAL FORECASTS OF THE ENTERPRISE.
 HOWEVER, THE EXECUTIVE SUMMARY CAN ON BE WRITTEN LAST IN ORDER TO
CAPTURE THE FINDINGS AND INSIGHTS OF THE OTHER PARTS, BUT FOR
PRESENTATION PURPOSES, IT IS PLACED IN THE FIRST PART OF THE BUSINESS PLAN.
BUSINESS PROPONENTS
 THE THIRD SECTION OF THE BUSINESS PLAN CONTAINS INFORMATION ABOUT
THE BUSINESS PROPONENTS OR STAKEHOLDERS. THERE ARE FOUR TYPES
OF STAKEHOLDERS:
1. RESOURCE MOBILIZERS AND FINANCIAL BACKERS
2. TECHNOLOGY PROVIDERS AND APPLICATORS
3. GOVERNANCE AND TOP MANAGEMENT
4. OPERATING AND SUPPORT TEAM

*IF THE BUSINESS PLAN READERS ARE THE RESOURCE PROVIDERS, THEN THEY WILL WANT TO KNOW
WHO ELSE ARE ON BOARD TO SHARE THE BURDEN OF RAISING MONEY TO SEE THE WHOLE THING
THROUGH.

*IF THE BUSINESS PLAN READERS ARE THE TECHNOLOGY PROVIDERS, THEY WILL WANT TO KNOW IF
THERE WILL BE SUFFICIENT FUNDS TO PAY FOR THE TECHNOLOGY
* IF THE BUSINESS PLAN READERS ARE THE GOVERNANCE AND TOP MANAGEMENT TEAM, THEN THEY
WILL WANT TO KNOW THE STRATEGIES AND PERFORMANCE INDICATORS ARE BEING PROPOSED.
*IF THE BUSINESS PLAN READERS ARE THE IMPLEMENTING, OPERATING AND SUPPORT TEAMS, THEY
WILL WANT TO KNOW WHAT PROGRAMS ACTIVITIES, TASKS, AND RESOURCES WOULD BE IN PLACE.

The target customers and the main value proposition

➢ THE FOURTH SECTION OF BUSINESS PLAN IS THE TARGET CUSTOMERS AND THE MAIN VALUE
PROPOSITION.
➢ THE BUSINESS PROPONENT MUST BE VERY PRECISE ABOUT THE TARGET AUDIENCE OR TARGET
CUSTOMERS. TARGET CUSTOMERS MUST BE OF SUFFICIENT SIZE, SUFFICIENT PAYING CAPACITY, AND
HAVE SUFFICIENT INTEREST TO PURCHASE THE PRODUCTS BEING OFFERED BY THE ENTERPRISE. THE
MAIN VALUE PROPOSITION IS THE UNIQUE SELLING PROPOSITION OF THE ENTERPRISE.
➢ KNOWING WHERE THE TARGET CUSTOMERS ARE EXACTLY CONCENTRATED, THE BUSINESS PLAN
SHOULD THEN PINPOINT WHAT THE CUSTOMERS BUY, HOW THEY BU, WHEN THEY BUY, WHERE THEY
BUY AND WHAT CONVINCES THEM TO BUY. THESE INFORMATION SHOULD THEN BE USED TO JUSTIFY
THE EXACT LOCATIONS MARKETING CHANNELS TO BE EMPLOYED BY THE ENTERPRISE.
Market demand and supply, industry dynamics, and macro environmental factors
• THE FIFTH SECTION OF THE BUSINESS PLAN IS THE MARKET DEMAND AND SUPPLY, THE
INDUSTRY DYNAMICS AND THE MACRO ENVIRONMENTAL FORCES AFFECTING THE BUSINESS
OF THE ENTERPRISE

• IT IS NORMAL FOR ENTERPRISE TO ACTUALLY EXPAND THEIR PRODUCT OFFERINGS TO

INCLUDE THE OTHER SEGMENTS OF A BIGGER MARKET. THE BUSINESS PROPONENT SHOULD
EXAMINE ALL THE OPPORTUNITIES IN THIS BIGGER MARKET IN ORDER TO DETERMINE WHAT
EXACTLY INFLUENCES THIS BIGGER MARKET.

• THE BUSINESS PLAN SHOULD ESTIMATE THE TOTAL MARKET SUPPLY AND DEMAND FOR THE
PRODUCT OFFERINGS OF THE ENTERPRISE. THE BUSINESS PLAN SHOULD THEN DETERMINE
THE MAJOR CRITICAL FACTORS THAT INFLUENCE THIS MARKET DEMAND AND SUPPLY.

*ONCE THESE CRITICAL FACTORS OR VARIABLES ARE DETERMINED, THE BUSINESS PLAN SHOULD THEN
FORECAST THE FUTURE DEMAND AND SUPPLY. IF THESE PHYSICAL FACTORS ARE EXPECTED TO REMAIN
THE SAME, THEN MOST LIKELY, THE FUTURE FORECAST WILL FOLLOW THE PAST TRENDS. IF NOT, THE
FUTURE ESTIMATE THE SAME, THEN MOST LIKELY, THE FUTURE FORECAST WILL THE PAST TRENDS, IF
NOT THE FUTURE ESTIMATE OF DEMAND AND SUPPLY SHOULD BE REVISED ACCORDING TO THE NEW
VARIABLES INFLUENCING THE DEMAND AND SUPPLY.

THE BUSINESS PLAN SHOULD DISCUSS THE RELEVANT INDUSTRY DYNAMICS:

➢ WHO ARE THE COMPETING ENTERPRISES IN THE INDUSTRY AND WHAT ARE THEIR
COMPARATIVE ADVANTAGES AND DISADVANTAGES? WHAT BUSINESS MODELS STRATEGIES
ARE THEY EMPLOYING?
➢ ¿WHO ARE THE SUPPLIERS IN THE INDUSTRY AND WHAT ARE THEIR CAPABILITIES AND
BARGAINING POWER?
➢ WHAT ARE THE CHANNELS OF DISTRIBUTION BEING USED BY THE INDUSTRY? HOW
EFFECTIVE ARE THESE CHANNELS?

BOTH THE INDUSTRY PLAYERS AND THE MARKET ARE AFFECTED BY THE MACRO ENVIRONMENT, WHICH INCLUDES
THE SOCIAL, POLITICAL, ECONOMIC, ECOLOGICAL AND TECHNOLOGICAL (SPEET) FORCES. THE BUSINESS PLAN
SHOULD DISCUSS THE MAJOR TRENDS AND CHANGING PATTERNS IN THE MACRO-ENVIRONMENT. WHICH
WHOULD HAVE THE SIGNIFICANT IMPACTS ON THE RELEVANT INDUSTRY AND THE BEHAVIOR OF CONSUMERS

SOCIAL ENVIRONMENT INCLUDES THE DEMOGRAPHICS AND CULTURAL DIMENSIONS THAT GOVERN
THE RELEVANT ENTREPRENEURIAL BEHAVIOR. THE STRUCTURE, SOCIAL STATUS, AND DYNAMICS OF
POPULATION AT LARGE. AS WELL AS THE PEOPLE’S BELIEFS, TASTES, MORES CUSTOMS, AND
TRADITIONS DICTATE THE MAJOR PARAMETERS OF MARKET BEHAVIOR.
➢ POLITICAL ENVIRONMENT DEFINES THE GOVERNANCE SYSTEM OF THE COUNTRY OR THE LOCAL
AREA OF BUSINESS. IT INCLUDES ALL THE LAWS, RULES, AND REGULATIONS ON ALLOWABLE AND
DISALLOWABLE BUSINESS PRACTICES
➢ ECONOMIC ENVIRONMENT IS MAINLY DRIVEN BY SUPPLY AND DEMAND FORCES. IT IS THE SAME
FACTORS THAT DRIVES THE INTEREST AND FOREIGN EXCHANGE RATES TO FLUCTUATE WITH THE
MOVEMENT OF THE MARKET FORCES.
➢ ECOLOGICAL ENVIRONMENT INCLUDES ALL NATURAL RESOURCES AND THE ECOSYSTEM THAT
DEFINES THE HABIT OF MAN, ANIMALS, PLANTS, AND MINERALS
➢ TECHNOLOGICAL ENVIRONMENT MAKES OR BREAK COMPETING PARTICIPANTS IN ANY INDUSTRY.
NEW SCIENTIFIC AND TECHNOLOGICAL DISCOVERIES OFTEN LEAD TO THE LAUNCH AND
COMMERCIALIZATION OF NEW PRODUCTS WITH SUPERIOR ATTRIBUTES OR TO RENDERING THE OLD
ONES OBSOLETE.
PRODUCT/SERVICE OFFERING: DESCRIPTION, EVOLUTION AND JUSTIFICATION
THE NEXT SIXTH SECTION OF THE BUSINESS PLAN IS THE PRODUCT/SERVICE
OFFERINGS THAT SHOULD CONTAIN A DESCRIPTION, EVOLUTION AND JUSTIFICATION
OF THE PRODUCT/SERVICE OFFERINGS.
THE PRODUCTS/SERVICES MUST BE DESCRIBED BY HIGHLIGHTING THE FEATURES AND ATTRIBUTES
THAT WOULD MOST APPEAL TO THE TARGET CUSTOMERS. THE BUSINESS PLAN SHOULD ALSO PROVE
THAT THE PRODUCTS/SERVICES WOULD BE ACCEPTED AND CARRIED BY THE DISTRIBUTION CHANNELS.

ENTERPRISE STRATEGY AND ENTERPRISE DELIVERY SYSTEM

THE BUSINESS PLAN SHOULD EXPOUND ON THE ENTERPRISE STATEGY (ES) BY
MAPPING THE COMPETITIVE LANDSCAPE AND BY SITUATING THE ENTERPRISE AND
ITS COMPETITORS AS TO THEIR STRATEGIES AND CHOSEN POSITIONINGS.
THE BUSINESS PLAN SHOULD THEN SHOW HOW THE ENTERPRISE DELIVERY SYSTEM
(EDS) WOULD ENABLE THE BUSINESS TO IMPLEMENT THE ENTERPRISE STRATEGY.
THE ENTERPRISE DELIVERY SYSTEM STARTS FROM THE INPUT (RESOURCES, MOBILIZED), PROCEED TO
THE THROUGHPUT (THE TRANSFORMATION PROCESS WHERE INPUT ARE CONVERTED TO OUTPUT),
AND PRODUCES THE OUTPUT (PRODUCTS/SERVICES). THE OUTPUT ARE THEN MARKETED TO THE
CUSTOMERS (IN CASE OF GOODS) OR EXPERIENCED BY THE CUSTOMERS (IN THE CASE OF SERVICES)
CUSTOMER SATISFACTION LEVEL, PROFITS GENERATED, AND THE PERFORMANCE OF PEOPLE FROM THE
TRANSACTION ARE THE OUTCOMES OF THE EDS.

THE EDS INVOLVES THE HARNESSING OF HUMAN, MONEY AND PHYSICAL RESOURCES FROM WELL-
SELECTED SOURCES.

THESE RESOURCES BECOMES THE INPUT (MONEY, MEN, MACHINES, MATERIALS, METHODS, AND
MANAGEMENT) WHICH THE OPERATIONS UNIT WITHIN THE EDS (i.e., THE MANUFACTURING OR
SERVICE DELIVERY PERSONNEL) WILL CONVERT OR TRANSFORM INTO OUTPUT.

THE OUTPUT WILL THEN BE DELIVERED TO THE CUSTOMERS THROUGH THE MARKETING UNIT OF THE
EDS. THE PRODUCTS/SERVICES OF THE ENTERPRISE ARE POSITIONED TO MEET THE REQUIREMENTS OF
THE SELECTED MARKET SEGMENT BY CHOOSING THE RIGHT PACKAGING, PRICING, PROMOTIONS,
PEOPLE FOR SELLING AND DISTRIBUTION, AND PLACES OR LOCATIONS WHERE THE TARGETED
CUSTOMERS CAN BEST BE FOUND.

THE OPERATIONS SERVES AS THE ENABLER OF THE ENTERPRISE STRATEGY. THE BUSINESS PLAN MUST
DEMONSTRATE HOW THE EDS AND THE ES TANDEM LEAD TO THE ATTAINMENT OF THE DESIRED
ENTERPRISE OUTCOMES.

THESE BUSINESS OUTCOMES SHOULD REASONABLY INCLUDE:

➢ HIGH CUSTOMER SATISFACTION LEVELS;
➢ HIGH SALES VOLUME, MARKET SHARE, AND MARKET REACH;
➢ HIGH FINANCIAL RETURNS;
➢ HIGH PEOPLE PERFORMANCE, PRODUCTIVITY AND MORALE LEVELS.

FINANCIAL FORECASTS: EXPECTED RETURNS, RISKS AND CONTIGENCIES

THE EIGHT SECTION OF THE BUSINESS PLAN IS THE FINANCIAL FORECAST INCLUDING THE FINANCIAL
RETURNS, THE FINANCIAL RISKS, AND THE FINANCIAL CONTINGENCIES.
THE BUSINESS PLAN MUST TRANSLATE EVERYTHING SHOULD THEN CALCULATE THE
EXPECTED FINANCIAL FORECAST OUTCOMES.

FROM THE FINANCIAL FORECASTS. THE BUSINESS PLAN SHOULD THEN CALCULATE THE
EXPECTED RETURNS FROM THE [Link] IMPORTANT RETURN ARE THE FOLLOWING
1. EXPECTED RETURN ON SALES
2. EXPECTED RETURN ON ASSETS OR INVESTMENTS
3. EXPECTED RETURN ON STOCKHOLDERS EQUITY

THE BUSINESS PLAN SHOULD ALSO CALCULATE THE LONG-TERM RETURNS. USING THE TIME VALUE OF
MONEY. THIS MEANS ESTIMATING THE INTERNAL RATE OF RETURN AND THE EXPECTED NET PRESENT
VALUE.

THE BUSINESS PLAN SHOULD THEN EVALUATE BOTH THE BUSINESS RISKS AND THE FINANCIAL RISKS
INVOLVED.

ENVIRONMENT AND REGULATORY COMPLIANCE

THE NINTH PART OF THE BUSINESS PLAN IS COMPOSED OF THE ENVIRONMENTAL AND
REGULATORY COMPLIANCE
THE BUSINESS PLAN MUST ARTICULATE THE LAWS, RULES AND REGULATIONS GOVERNING THE
BUSINESS, AND THE INDUSTRY THAT ENTERPRISE IS IN. IT SHOULD ASCERTAIN THAT ALL THE NECESSARY
PERMITS, LICENSES AND AUTHORITY TO USE PROPRIETARY INTELLECTUAL CAPITAL HAD EITHER BEEN
SECURED OR WOULD DEFINITELY BE SECURED

THE BUSINESS PLAN SHOULD ALSO ASSURE THE READER THAT ALL THE NECESSARY LOCAL
GOVERNMENT ORDINANCES AND BARANGAY ETHICS WOULD BE FOLLOWED BY THE ENTERPRISE.

CAPITAL STRUCTURE AND FINANCIAL OFFERING: RETURNS AND BENEFITS TO

INVESTORS, FINANCIER, AND THE PARTNERS
THE TENTH SECTION OF THE BUSINESS PLAN CONTAINS THE CAPITAL
STRUCTURE AND FINANCIAL OFFERINGS OF THE ENTERPRISE INCLUDING SOME
DISCUSSIONS ON WHO ARE THE INVESTORS, THE FINANCIERS, AND THE
PARTNERS OF THE ENTERPRISE

FINALLY, THE BUSINESS PLAN MUST APPEAL TO ITS TARGET AUDIENCE. IT MUST
HIGHLIGHT FOT THEM THE MAIN FEATURES OF THE BUSINESS PLAN THAT THEY
ARE LOOKING FOR.

ACTIVITY: HOW DOES YOUR BUSINEES PLAN LOOK LIKE?

PREPARE AN INITIAL OUTLINE OF HOW YOU WANT YOUR OWN BUSINESS PLAN TO LOOK LIKE. THIS
ASSUMES THAT YOU ALREADY HAVE A BUSINESS ENDEAVOR THAT YOU WOULD WANT TO ENTER
INTO.