Marketing Strategy and The Finances

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Marketing Strategy and The Finances

• EDC

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Marketing Strategy

• Positioning, packaging and pricing are crucial
  for a successful launch.
• You need to be visible.
• Then you also need to be noticeable.
• Finally, you should be affordable as well.

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Marketing StrategyPositioning

• The product would be positioned as being an
  economical tool offering value for money.
• Explain your sale strategy. E.g. The planner we
  talked of1. Channel partners local vendors,
  CAs, consultants2. Website3. A separate Co.
  sales team

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Marketing StrategyPositioning

• Hence you need to determine the magnitude of
  launch required.
• Launch could be local, national or even global.
• But have plans jotted out for each launch stage
  in the very beginning.

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Marketing StrategyPackaging

• Is your product robust?
• Is it something that will make work much easier?
• Is it affordable (value for money)?
• Is it easily available (and its servicing
  guaranteed)?
• NOTE You also need to make your target consumer
  feel that it is made for him.

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Marketing StrategyPricing

• Keep track of your competitors pricing.
• Make sure that people do try.High price in the
  beginning will lead to low sales, but a lower
  price will guarantee that your product will be
  tested.
• Get reviews from the initial buyer.
• Something called a Simulated market for surveys
  before price determination.
• Have some advertisement budget as well.

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The Finances

• Market research -gt Execution Plan -gt Capital
  required.
• Categorize it as required immediately,
  investment after first stage of launch,
  investments required later.
• All this should include the cost of developing
  the product.

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The FinancesSome Costs

• Some general cost of project are1. Office
  development premises rented, hardware, site
  development, office equipment furniture.

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The FinancesSome Costs

• 2. Pre operative Expenses Required until the
  commercial production doesnt start.Eg. Employee
  Payscale, cost of running the production
  etc.Hence, this is the money that we have to
  give before we start getting some funding or
  returns.

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The FinancesSome Costs

• 3. Contingencies Required if estimate wrong or
  cost overrun. Keep it 5 20 of the
  estimate.This figure depends upon the
  inflation.
• UPTILL HERE, WE HAD BEEN DISCUSSING THE FIXED
  CAPITAL. NOW NEXT IS THE LIQUID ASSETS.

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The FinancesSome Costs

• 4. Working capital margin (liquid assets)We
  define the costing for a cycle raw materials
  -gt work in progress -gt finished goods -gt
  deters.This is also called the working capital,
  i.e. the capital required for one cycle to be
  completed before we get returns upon this. Then
  we start the next.

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The FinancesMoney Sources

• Source 1 Creditor.One who gives (credits) money
  to you. It is a sort of loan.
• Source 2 Banks.Two types Long term or Working
  Capital.Long terms is generally 21Working
  capital is generally 31

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The FinancesMoney Sources

• Source 3 PromotersThis is called partner
  money.Even shareholding comes under this.
• Source 4 Start-up or Angel investorsThese
  people fund based upon your idea and
  commitment.All skills tested in this.
• Source 5 VCsGenerally come when start-up
  initiated.

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The FinancesProfitability Projection

• Draw a projection year-wise. ExampleSales -gt
  500.00, 975.00, 2000.00Operating Expenses -gt
  134.28, 150.04, 168.05Earning before Int. Dep.
  Tax (EDEBIT) -gt 365.72, 824.96,
  1816.95Interest (Int.) -gt 4.80, 4.22,
  3.72Depreciation (Dep.) -gt 18, 18, 18Profit
  before Tax (PBT) -gt 342.92, 802.74,
  1795.23Income Tax _at_ 33 -gt 113.16, 264.90,
  592.43PAT -gt 229.76, 537.83, 1202.81

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The QuestionnaireThings you could now answer

• The whole of part 2 (Customer Analysis).
• The whole of part 4 (Finances).
• Want some clarifications??
• Mail at
• edc_at_iitg.ernet.inKarandeep SinghStudent Head,
  EDC9954347738

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• Anticipating a lot of entries

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• Thank You