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Create your business plan: service or product line, 10,282 views.
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The Service or Product Line section of your business plan should demonstrate how your particular product will fill a need for your target customers.
WHAT TO INCLUDE IN YOUR SERVICE OR PRODUCT LINE SECTION…
A description of your product / service.
Include information about the specific benefits of your product or service, from your customers’ perspective. You should also write about your product or service’s ability to meet consumer needs, any advantages your product has over that of the competition, and the current development stage your product is in (e.g., idea, prototype).
DETAILS ABOUT YOUR PRODUCT’S LIFE CYCLE
Be sure to include information about where your product or service is in its life cycle, as well as any factors that may influence its cycle in the future.
INTELLECTUAL PROPERTY
If you have any existing, pending, or any anticipated copyright or patent filings, list them here. Also disclose whether any key aspects of a product may be classified as trade secrets. Last, include any information pertaining to existing legal agreements, such as nondisclosure or non-compete agreements.
RESEARCH AND DEVELOPMENT (R&D) ACTIVITIES
Outline any R&D activities that you are involved in or are planning. What results of future R&D activities do you expect? Be sure to analyze the R&D efforts of not only your own business, but also of others in your industry.
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6 Free Business Plan Templates for Product Managers
Lightweight business plans are not just for startups. These tools can be just as valuable for product managers at big companies with established products. Because even if you are not capturing plans to develop and build your company’s first offering, you still need to make a business case for the opportunity you are pursuing.
Rather than build out a business plan from scratch — start with a template that will help you quickly communicate what is most important.
A business plan can serve many purposes depending on your goals. You can use it to define the key elements of a new product you are developing. Or if you are at a mature company, it can be used to summarize your strategy for a new market opportunity.
Our team at Aha! knows how important it is to choose the right plan that serves your goals. That is why we include so many different types of business planning tools in our product roadmapping software — including a comprehensive business model builder based on our 20+ years of experience building breakthrough products and software companies.
But what if your company is not yet ready to sign up for Aha! or does not have access to these kinds of tools? You still need to organize your thinking, define your assumptions, and share your plans. So we created six business plan templates for you to download at no cost .
Along with SWOT templates and roadmap templates , these latest templates are designed to be quick and easy to use to help you with your strategic planning. The templates are fully customizable so you can adapt them to your unique situation and download in both spreadsheet and presentation file format.
Create your own business plan templates
Think about your most pressing need and who you will be sharing this information with. Because whether you are using a purpose-built tool or a static template for your planning, you want to choose the view that will work best for your audience.
Here are six scenarios where a business plan template can help:
Lay the foundation
Often the most useful thing for a broad audience is to represent the foundational elements of your plan in a simple layout. In those cases, you want to present the fundamentals like key messaging, customer pain points, and future opportunities in a single view. This makes it easy for stakeholders from all across the company to understand the business model and provide their input.
Define the problem
Sometimes you want that single view, but you also want to center the conversation around the main problems the customer is trying to solve. The ideal template will direct your audience’s attention to the top customer challenges and succinctly capture how your product addresses each one.
Understand the customer
Generally, you will not target your product at a single customer segment but several. Building a profile and business plan for each one is a lot easier when you start with a good template — one that lets you define both the set of customers and your approach to serving them. You can then compare and contrast the plans for each segment and decide which customers you are best positioned to deliver a superior product experience to.
Survey the market
You want to make strategic decisions. For that, you need to see the competitive landscape . You do not want to react to every competitor move, but you do need to know what alternatives customers have to your product. Start with a template that summarizes the market and outside threats — both existing and potential.
Analyze the product
Just as you need to understand the market, you also have to be realistic about your product’s place in it. A business plan that conducts a strategic analysis of your strengths, weaknesses, opportunities, and threats can illuminate what your product is doing well and where it can do better.
Plan your marketing
In order to successfully market a product, many teams focus on the 10Ps: product, price, people, process, promotion, programs, place, physical environment, partners, and positioning. The right template allows you to answer the key questions about each of these elements. Then, together, the team can develop and execute a winning go-to-market strategy.
The right template can help you make your product plans easily understandable for your key stakeholders.
It helps you zero in on what is most relevant and present it in a visually accessible and logical layout. When others can grasp the information and provide their insights, it makes your plan that much stronger.
How will you use your business plan to achieve your goals?
Build product like you always wanted. See for yourself — start a free 30-day trial.
Ron builds lovable products. He was the VP of Product Management and UX at Aha! — the world’s #1 product development software . Ron has more than 15 years of experience in entrepreneurship and leading product teams. Previously, Ron founded and sold his own company and has been on the founding team of multiple venture-backed companies.
Build what matters. Try Aha! free for 30 days.
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Product Line
An array of related products under the same brand
What is a Product Line?
A product line refers to an array of related products under the same brand. In other words, a product line is a collection of similar products that are sold to customers.
- A product line is an array of related products.
- Products under a product line can be related by functionality, target market, price range, or brand.
- Product line depth refers to the number of products offered under a product line.
Understanding Product Lines
Products under a product line are related either by functionality, target market , price range, or brand. Although products in a product line are generally complementary to each other, that does not need to be the case. For example, the product lines of a company may look as follows:
As shown above, ABC Company carries two product lines:
- Product Line 1 consists of products that are fruit-based; and
- Product Line 2 consists of products for sports activities.
Product Line Depth
When discussing product lines, it is important to understand the idea of “product line depth.” It refers to the number of products offered under a product line.
For a product line, there is no ideal number for product line depth – a product line may consist of a depth of five or nine and still be successful. However, maintaining a depth that is too low can affect the availability of choices for customers, while keeping a depth that is too high can dilute the brand perception of the product line and cannibalize sales. For example, consider two scenarios:
1. Low Depth
A company may keep a fruit-based product line depth of two (two products under a product line) consisting of a mango drink and a strawberry drink. A customer that prefers a grape drink may not be a customer of the company due to the unavailability of such a product. It would limit the addressable target market of the company and diminish sales.
2. High Depth
A company may keep a fruit-based product line depth of five (five products under a product line) consisting of a mango drink, a strawberry drink, a guava drink, a grape drink, and a watermelon drink. Keeping such an array of products may adversely impact a company if one product is unpopular. For example, if it cost $100,000 to conduct research and development for a watermelon drink but sales only amount to $5,000.
Therefore, there is a careful balance between the number of products that should be offered in a product line. The ideal number of products to offer in a product line can be determined by conducting market research.
To Add or Drop a Product Line?
Managerial accountants often conduct analyses on product lines to determine if they should be dropped or not. Consider an auto manufacturer with the following profit and loss statement:
Assume that both sedans and coupes are produced in the same facility and, as such, rent expense is allocated based on the amount of square footage used in the production of the respective product lines. Should the sedan product line be dropped?
Looking at the bottom line (profit), an individual may assume that the sedans product line should be dropped due to the -$30,000 in profit. However, in such cases, an individual should instead compare the contribution margin to the avoidable fixed costs. For example, the sedans product line shows a contribution margin of $570,000, and the fixed costs that could be saved if the product line is to be discontinued are salaries of $400,000.
Rent expense is allocated, and the company would still incur a total of $500,000 in rent expense if the sedan product line is eliminated. The following illustrates the profit of the company if the sedans product line is eliminated:
Therefore, a decision to add or drop a product line should be based on the contribution margin and avoidable fixed costs. If the company dropped the sedans product line, the company would lose $177,000 in total profits.
Examples of Product Lines
When an individual goes into a Starbucks (NASDAQ: SBUX) shop, they are exposed to several product lines offered by the company. For example, Starbucks may have product lines such as coffee, tea, and snacks.
At a Nike (NYSE: NKE) store, product lines may consist of basketball, soccer, and golf. Under each sport product line, there may be sub-product lines, such as footwear, clothing, and sporting equipment.
Additional Resources
Thank you for reading CFI’s guide to Product Line. To keep learning and developing your knowledge of financial analysis, we highly recommend the additional CFI resources below:
- Buyer Types
- Demographics
- Market Segmentation and Targeting
- Rent Expense
- See all management & strategy resources
- Share this article
Home » Business ideas » Beauty Care Industry » Cosmetics Line
How to Write a Natural Hair Product Line Business Plan [Sample Template]
In recent times, it has become the norm for people to go all natural and organic including maintaining their natural hair. Interestingly, it is not restricted to only black women but it cuts across races and genders. As a matter of fact, there are well organized bodies who are advocating the natural hair and one of them is the Natural Hair Moment. The natural hair movement is a movement which encourages women and men of African descent to embrace their natural afro-textured hair.
It originated in the United States during the 1960s, with its most recent iteration occurring in the 2000s. With this development, it is easier to predict that a business that is into the production of natural hair care products will indeed be a thriving business. If you are however thinking of starting your own natural hair product line, then you must be ready to learn the ropes.
No doubt it requires loads of research, experience and huge capital base to be able to establish a natural hair product line whose products will be globally accepted. If you want to start small, then you might not have to break the bank to get started, but you must still do a thorough research and if possible, acquire a degree or diploma in cosmetology.
If you are sure that this type of business is what you truly want to do after you must have conducted your market research and feasibility studies, then the next step to follow is to write a good business plan; a detailed blue print of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services.
The truth is that it is one thing to have a fantastic idea cum business plan, but another thing for the business plan to translate to profits, that is why it is important to assemble a team of experts to work with if you want to be successful with your natural hair product line company. Below is a sample natural hair product line business plan that will help you successfully launch your business.
A Sample Natural Hair Product Line Business Plan Template
1. industry overview.
The natural hair product business is a business whose products are used all across the world by both males and females who are keeping their natural hair especially people of Africa descent. According to a research conducted by Mintel, more blacks in the united states of America are gravitating towards natural hair care products and this has seen an increase in the sale of hair styling products, which jumped to 26.8 percent between 2013 and 2015, reaching a value of $946 million which represents more than 16 percent of the overall hair industry.
The move to naturals has also seen a drop in the sale of relaxers. In the last half decade, natural hair care production business has experienced elevated demand, most especially from premium level goods, in line with increased consumer spending and the overall growth of the economy.
Purchaser preferences and new product introductions have also contributed to boosted revenue and profit. Operators flooded the industry over the period, as purchaser demand for brand name and value-added products increased.
An increasingly health-conscious customer base is becoming progressively more aware and sensitive to product ingredients. Consumers are increasingly concerned with using products that are chemical-based or have traces of metals or animal by-products, pushing companies to invest in research and development to offer new natural and safe products.
A recent report published by IBISWorld estimates that industry revenue for natural hair care products is projected to reach $212 million by 2017 growing by 2.8 percent between the periods of 2011 and 2016. Even though the economy is slowly recovering, spending power amongst the blacks according to The Nielson Co has increased tremendously within a decade and is still expected to grow some more within the next decade.
The increase in production of organic and natural hair care products has been fueled by the approval given by the U.S Department of Agriculture (USDA) and the FDA. What has fueled demand in this industry is the change in the lifestyle of consumers as they now demand chemical-free hair products.
More than 51 percent of blacks in the United States have resorted to natural hair care products and yet demand shows no signs of slowing down as sales have been projected to reach $1.4 billion in the year 2022. One of the major factors that encourage aspiring entrepreneurs to venture into natural hair care production is the fact that there are readily available markets for natural hair care products.
Despite the fact that there are stiffer competitions amongst other hair care product manufacturing companies/brand, if you are able to carve a niche for yourself, it won’t be too difficult for people to accept your products.
2. Executive Summary
Monica Nature® Natural Hair Care Production, Inc. is a licensed and standard hair care production company with bias in natural hair care products that will be located in an industrial area in Fort Wayne, Indiana. We have been able to secure a long-term lease agreement for a facility in a strategic location with an option of long-term renewal on an agreed terms and conditions that are favorable to us.
The facility has government approval for the kind of business we want to run and it is easily accessible and we are deliberate about that to facilitate easy movement of raw materials and finished products. We are also in business to make profits at the same to give our customers value for their money; we want to give people and businesses who patronize our natural hair care products the opportunity to be part of the success story.
We are aware that there are several big and small scale natural hair care production companies in every nooks and crannies of the United States, which is why we spent time and resources to conduct our feasibility studies and market survey so as to enable us locate the business in an area that will support the growth of the business.
We ensured that our facility is easy to locate and we have mapped out plans to develop a wide distribution network for wholesalers all around Fort Wayne – Indiana and the United States of America.
Much more than producing quality and safe natural hair care products, our customer care is going to be second to none. We know that our customers are the reason why we are in business which is why we will go the extra mile to get them satisfied when they visit purchase any of our products.
Monica Nature® Natural Hair Care Production, Inc. will ensure that all our customers (wholesale distributors) are given first class treatment whenever they visit our factory. We have a CRM software that will enable us manage a one-on-one relationship with our distributors no matter how large their number may grow to.
Monica Nature® Natural Hair Care Production, Inc. is family business that will be owned by Monica Martins and her immediate family members. Mrs. Monica Martins who is the Chief Executive Officer of the Company is Graduate of Cosmetology and she holds a Master’s Degree in Business Management (MBA) from Stanford College.
She has over 12 years’ experience working in related industry as a senior production manager prior to starting Monica Nature® Natural Hair Care Production, Inc.
3. Our Products and Services
Monica Nature® Natural Hair Care Production, Inc. is going to run a standard and licensed natural hair care production company whose products will not only be sold in Fort Wayne – Indiana but also throughout the United States of America. We are in the cosmetic & beauty care product manufacturing industry to make profits and also to give our customers value for their money.
We will ensure that we do all that is permitted by the law in the United States of America to accomplish our business goal and objective. These are some of the products that we will be offering;
- Natura hair coloring
- Natural hair conditioner
- Natural hair gel
- Natural hair glue
- Natural hair serum
- Natural hair spray
- Natural hair tonic
- Natural hair wax
- Natural hair oil and pomade
- Natural hair mousse and related natural hair care products
4. Our Mission and Vision Statement
Our vision is to establish standard natural hair care production company whose products will not only be sold in Fort Wayne – Indiana, but also throughout the United States of America. Our mission is to establish a standard and world class natural hair care production company that in our own capacity will favorably compete with leaders in the industry. We want to build a business that will be listed amongst the top 10 natural hair care brands in the United States of America.
Our Business Structure
Monica Nature® Natural Hair Care Production, Inc. is established with the aim of competing favorably with other leading natural hair care brands in the industry. This is why we will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.
We will ensure that we only hire people that are qualified, honest, hardworking, customer centric and are ready to work to help us build a prosperous business that will benefit all our stake holders (the owners, workforce, and customers).
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of twelve years or more depending how fast we meet our set target. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;
- Chief Executive Officer (Owner)
Plant Manager
- Human Resources and Admin Manager
Merchandize Manager
Sales and Marketing Manager
- Machine Operators
- Accountants / Cashiers
Distribution Truck Drivers
5. Job Roles and Responsibilities
Chief Executive Officer – CEO (Owner):
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e., leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization.
- Responsible for overseeing the smooth running of the production plant
- Part of the team that determines the types and quantities of natural hair care products that are to be produced
- Maps out strategies that will lead to efficiency amongst workers in the plant
- Responsible for training, evaluation and assessment of plant workers
- Ensures that the steady flow of both raw materials to the plant and easy flow of finished products through wholesale distributors to the market
- Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
- Serve as quality control and compliance officer
- Ensures that the plant meets the expected safety and health standard at all times.
Admin and HR Manager
- Responsible for overseeing the smooth running of HR and administrative tasks for the organization
- Defining job positions for recruitment and managing interviewing process
- Carrying out induction for new team members
- Responsible for training, evaluation and assessment of employees
- Responsible for arranging travel, meetings and appointments
- Oversee the smooth running of the daily office activities.
- Manage vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
- Responsible for the purchase of raw materials and labeling and packaging materials.
- Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
- Ensures that the organization operates within stipulated budget.
- Manage external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
- Model demographic information and analyze the volumes of transactional data generated by customer purchases
- Identify, prioritize, and reach out to new partners, and business opportunities et al
- Document all customer contact and information
- Represent the company in strategic meetings
- Help increase sales and growth for the company
Accountant/Cashier
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the organization
- Serves as internal auditor for the organization
Client Service Executive
- Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
- Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
- Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
- Manages administrative duties assigned by the manager in an effective and timely manner
- Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
- Receives parcels/documents for the company
- Distribute mails in the organization
- Handles any other duties as assigned by the line manager
Production Workers/Machine Operators:
- Responsible for operating equipment and machines such as extracting, blending, mixing and packaging, labeling and sealing machines used in the production of natural hair care products
- Handle labeling of natural hair care products
- Assist in packaging and loading care products into distribution trucks
- Assist in loading and unloading products
- Maintain a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
- Keep a record of vehicle inspections and make sure the truck is equipped with safety equipment
- Assist the transport and logistics manager in planning their route according to a delivery schedule.
- Local-delivery drivers may be required to sell products or services to stores and businesses on their route, obtain signatures from recipients and collect cash.
- Transport finished goods and raw materials over land to and from manufacturing plants or retail and distribution centers
- Inspect vehicles for mechanical items and safety issues and perform preventative maintenance
- Comply with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
- Report defects, accidents or violations
6. SWOT Analysis
We are quite aware that there are several natural hair care production companies both large and small in the United States of America and Canada which is why we are following the due process of establishing a business so as to compete favorable with them.
We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.
Monica Nature® Natural Hair Care Production, Inc. employed the services of an expert HR and Business Analyst with bias in startup business to help us conduct a thorough SWOT analysis and to help us create a business model that will help us achieve our business goals and objectives.
This is the summary of the SWOT analysis that was conducted for Monica Nature® Natural Hair Care Production, Inc.;
Part of what is going to count as positives for Monica Nature® Natural Hair Care Production, Inc. is the vast experience of our management team, we have people on board who are highly experienced and understand how to grow business from scratch to becoming a national phenomenon. So also, the different types of natural hair care products that we produce, our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.
A major weakness that may count against us is the fact that we are a new natural hair care production company and we don’t have the financial capacity to engage in the kind of publicity that we intend giving the business especially when big names like L’Oréal USA Inc., Procter & Gamble Company and Estee Lauder Companies Inc. et al are already determining the direction of the market.
Opportunities:
The opportunities available for natural hair care product manufacturing companies are enormous. This is due to the fact that more blacks in the United States are gravitating towards natural hair care products and this has seen an increase in the sale of hair styling products, which jumped to 26.8 percent.
As a result of that, we were able to conduct a thorough market survey and feasibility studies so as to position our business to take advantage of the existing market for beauty care products and also to create our own new market. We know that it is going to require hard work, and we are determined to achieve it.
We are quite aware that just like any other business, one of the major threats that we are likely going to face is economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power.
Another threat that may likely confront us is the arrival of a new natural hair care production company or beauty care manufacturing company that also manufactures natural hair care products.
7. MARKET ANALYSIS
- Market Trends
If you are conversant with the existing trend in the cosmetic & beauty care products manufacturing industry, you will quite agree that there are competitions in different stages of the industry. Most natural hair care production companies are leveraging on creativity in terms of packaging and marketing to continue to stay afloat in the industry.
Another trend in this industry is the exploration of safer raw materials for the production of natural hair care products. The truth is that people all over the world are looking for natural hair care products that contain organic ingredients or at least healthy essential oils hence the increase in demand for natural hair care products that are produced from herbal raw materials.
Lastly, the cosmetic and beauty care products manufacturing industry is leaning towards the adoption of eco – friendly approach towards the production and packaging of its products. As a matter of fact, the industry’s adoption of eco-friendly practices will likely persuade environmentally conscious consumers to buy its products.
8. Our Target Market
When it comes to selling natural hair care products, there is indeed a wide range of available customers. In essence, our target market can’t be restricted to just a group of people (black women who are carrying their natural hair), but all those who reside in our target market locations.
We are in business to engage in manufacturing and wholesale distribution of natural hair care products to the following groups of people;
- Cosmetic and beauty care retailers
- Beauty salons and spas
- Barbing salons
- All the females and males in and around our target market location who are cool with natural hair
Our Competitive Advantage
A close study of the natural hair care product line business reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.
We are aware of the stiff competition and we are prepared to compete favorably with other natural hair care product lines in Fort Wayne – Indiana and throughout the United States and Canada. Part of what is going to count as competitive advantage for Monica Nature® Natural Hair Care Production, Inc. is the vast experience of our management team, we have people on board who are highly experienced and understand how to grow a business from the scratch to becoming a national phenomenon.
So also, the wide varieties of natural hair care products that we produce, our large national distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Monica Nature® Natural Hair Care Production, Inc. is established with the aim of maximizing profits in the cosmetic and beauty care product manufacturing industry in both the United States of America and Canada and we are going to ensure that we do all it takes to sell a wide range of natural hair care products to a wide range of customers.
Monica Nature® Natural Hair Care Production, Inc. will generate income by selling the following products;
10. Sales Forecast
One thing is certain when it comes to the natural hair care product business, if your products are well – packaged and branded and if your production plant is centrally positioned and easily accessible, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Fort Wayne – Indiana and every city where our natural hair care products care will be sold and we are quite optimistic that we will meet our of generating enough income/profits from the first six months of operation and grow the business and our clientele base.
We have been able to critically examine the cosmetic and beauty care products manufacturing industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below is the sales projection for Monica Nature® Natural Hair Care Production, Inc., it is based on the location of our business and other factors as it relates to small scale and medium scale natural hair care production company startups in the United States;
- First Fiscal Year (FY1): $290,000
- Second Fiscal Year (FY2): $550,000
- Third Fiscal Year (FY3): $950,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
- Marketing Strategy and Sales Strategy
Before choosing a location for Monica Nature® Natural Hair Care Production, Inc. and also the kind of natural hair care products we produce, we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market in our target market location.
We hired experts who have good understanding of the cosmetic and beauty care product manufacturing industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Fort Wayne – Indiana and other cities in the United States of America and Canada.
In summary, Monica Nature® Natural Hair Care Production, Inc. will adopt the following sales and marketing approach to sell our natural hair care products;
- Introduce our natural hair care products brand by sending introductory letters to merchants, retailers, barber shops, beauty salons, spas and other stakeholders in Fort Wayne – Indiana and other cities both in the United States of America.
- Advertise our products in community-based newspapers, local TV and radio stations
- List our business and products on yellow pages ads (local directories)
- Leverage on the internet to promote our natural hair care products brands
- Engage in direct marketing and sales
- Encourage the use of word-of-mouth marketing (referrals)
11. Publicity and Advertising Strategy
Despite the fact that our natural hair care product plant is a standard one with a wide range of natural hair care products that can favorably compete with other leading brands in the industry, we will still go ahead to intensify publicity for all our products and brand.
Monica Nature® Natural Hair Care Production, Inc. has a long – term plan of distributing our natural hair care products in various locations all around the United States of America and Canada which is why we will deliberately build our brand to be well accepted in Fort Wayne – Indiana before venturing out.
Here are the platforms we intend leveraging on to promote and advertise Monica Nature® Natural Hair Care Production, Inc.;
- Place adverts on both print (community-based newspapers and related beauty and lifestyle magazines) and electronic media platforms
- Sponsor relevant community programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, and Pinterest et al to promote our natural hair care products brand
- Install our Bill Boards on strategic locations all around major cities in the United States of America and Canada
- Engage in roadshow from time to time in targeted communities
- Distribute our fliers and handbills in target areas
- Position our Flexi Banners at strategic positions in the location where we intend getting customers to start patronizing our products.
- Ensure that our products are well branded and that all our staff members wear our customized clothes, and all our official cars and distribution vans are customized and well branded.
12. Our Pricing Strategy
We are aware of the pricing trend in the cosmetic and beauty care products manufacturing industry, which is why we have decided to produce various sizes of natural hair care products. In view of that, our prices will conform to what is obtainable in the industry but we will ensure that within the first 6 to 12 months our products are sold a little bit below the average prices of various natural hair care brands in the United States of America.
We have put in place business strategies that will help us run on low profits for a period of 6 months; it is a way of encouraging people to buy into our natural hair care product brands.
- Payment Options
The payment policy adopted by Monica Nature® Natural Hair Care Production, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Monica Nature® Natural Hair Care Production, Inc. will make available to her clients;
- Payment via bank transfer
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
In view of the above, we have chosen banking platforms that will enable our clients make payment for the purchase of our natural hair care products without any stress on their part.
13. Startup Expenditure (Budget)
When it comes to starting a natural hair care production company, the major areas that you are going to be spending the bulk of your cash is in the setting up a standard hair care production plan, purchase of distribution trucks and of course renting or leasing a well-located facility large enough fit into the design you have in mind.
Aside from that, you are expected to pay your employees, purchase of raw materials, maintaining your trucks and fueling. These are the key areas where we will spend our startup capital;
- The total fee for registering the business in the United States of America – $750 .
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $1,300 .
- Marketing promotion expenses for the grand opening of Monica Nature® Natural Hair Care Production, Inc. in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580 .
- The cost for hiring Business Consultant – $2,500 .
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400 .
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of $105,600.
- The cost for construction of a standard natural hair care product plant – $100,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) .
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
- The cost for Start-up inventory (raw material (essential oil) and labeling and packaging materials. et al) – $80,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost of purchase of distribution vans – $60,000
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, Fax Machines, tables and chairs et al) – $4,000
- The cost of launching a website – $600
- Miscellaneous – $10,000
We would need an estimate of three hundred and fifty thousand dollars ($350,000) to successfully set up our natural hair care product plant in Fort Wayne – Indiana.
Generating Funds/Startup Capital for Monica Nature® Natural Hair Care Production, Inc.
Monica Nature® Natural Hair Care Production, Inc. is owned and financed by Monica Martins and her immediate family members. They do not intend to welcome any external business partners which is why she has decided to restrict the sourcing of the startup capital to 3 major sources.
These are the areas we intend generating our start-up capital;
- Generate part of the startup capital from personal savings and sell of stocks
- Source for soft loans from family members and friends
- Apply for loan from my Bank
N.B: We have been able to generate about $150,000 (Personal savings $100,000 and soft loan from family members $50,000) and we are at the final stages of obtaining a loan facility of $200,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers they have, the capacity and competence of their employees, their investment strategy and the business structure. If all these factors are missing from a business (company), then it won’t be too long before the business closes shop.
One of our major goals of starting Monica Nature® Natural Hair Care Production, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to retail our natural hair care products a little bit cheaper than what is obtainable in the market and we are prepared to survive on lower profit margin for a while.
Monica Nature® Natural Hair Care Production, Inc. will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re-training of our workforce is at the top burner.
We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Leasing of facility and construction of standard natural hair care product plant: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members and friends: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed equipment and machines such as oil extractor, blending, mixing and packaging, labeling and sealing machines, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
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New Product Launch Business Plan Sample
SEPT.30, 2013
New product launch business plan for starting your own business
Clueless on how to add a new product line to your enterprise? Well, adding a product line is not a simple process. It isn’t just hiring a few more people and acquiring additional equipment.
Establishing a new product line needs adjustments on all organizational levels, and your operational plan & strategic plan. It may require you to carry out marketing analysis and overall risk assessment again. And therefore, you require a comprehensive business plan to launch a new product no matter how established your business already is.
A good practice is to get developed a business plan online or by industry experts near you so that all features of the new product launch can be taken care of.
To help you fathom how a new product launch in the market is introduced we are providing a sample business plan guide adopted by NYC House Cleaners when they added construction debris cleanup to their services.
Executive Summary
2.1 the business.
NYC House Cleaners was a cleaning company founded in New York. The company was established in 2009 and in 2021, the enterprise owner decided to add a new product line and broaden his services to the city’s construction sector. In this sample, we will provide some segments of the business plan for launching a new product following which the owner successfully launched a new product.
2.2 Management of new product launch
Management of a new product launch is just as complicated and expedient as that of initiating a new startup. Only by properly following the steps for launching a new product can you ensure better management.
In this business plan for franchise , we will explain how to launch a product line and how to adjust all the segments of your previous business plan according to the new needs.
2.3 Customers of new product launch
The buyers (of your new product line) depend on the type of your basic business. In the case of NYC House Cleaners, they were contractors, construction managers, disaster management organizations, and construction firms.
2.4 Business Target
Presenting a new product, you would have certain fiscal and social expectations. In your business plan for a new product launch , it is expedient to pen them down so you can remain focused on achieving them.
The business targets of NYC House Cleaning are demonstrated in the graph below.
Company Summary
3.1 company owner.
NYC House Cleaning is owned by Frank Max. Max is a Harvard graduate with a passion to provide unparalleled services to consumers and make profits.
3.2 Why the new product launch is being started
In almost 10 years, Max was able to strengthen the business working with which he started. To bring innovation, and explore more opportunities, he decided to launch a new product.
3.3 How the new product launch will be started
Step1: Create Business Plan New Product
The foremost step is to study as many business plans for new products as are available. They will help you understand the process for different types of businesses. After that, you should delineate launching a new product plan.
In case, you lack a professional business diploma or degree, you should consider hiring a business consulting firm to make for you a new product business plan sample. You can have a great deal of insight into what that plan would look like by reading this sample product business plan.
Step2: Execute the Plan
The second step is to execute and administer each part of your business plan. You have to recruit more people with qualifications that match your product specification. You will have to develop sales strategy and marketing strategy accordingly.
Step3: Use the Web
The forthcoming step is to make your consumers aware of the new product or service. Using the web and social media will be the best choice as your reach can grow multiple times using them.
Step4: Manage and Grow
After you have integrated the new product into all the business features, you will have to develop a brief strategy on how to grow your business even further by capitalizing on the new product.
Services of new product launch
When you have concluded which product or service you want to add, the forthcoming step is to thoroughly investigate how to launch a product line. For a systematic approach, you should discuss all the features of the new product in very specific terms in your business plan for product launch.
If you don’t know how that can be accomplished, you can study business plans for new products available online like this one. In this business plan sample for new product launches, we will explain what type of new products are usually added by enterprises.
- Extension of Service
Enterprises whose model is based on service provision usually extend the service line. This includes either providing the same set of services to other areas or increasing services on the list.
- New Product
This includes adding an entirely new product to your business. This needs a proper business plan sample for new product since the areas to consider are the same as they were when you launched your business.
- Product Mix
This category caters to the scenario when a startup entirely shifts its range of products.
- Changing Product Features
This includes adding new features or bringing innovation to an already existing product or service.
In this product business plan sample we will explain how NYC House Cleaners extended their services. You can also see the new arrangement and staff in the later segments of this product business plan example.
Marketing Analysis of new product launch
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Even if you have already carried out the flawless market analysis in your operational plan, you are required to do it again when making a marketing plan for the launch of new product . It includes understanding market statics and dynamics and taking them down in your business plan for the new product launch.
For micro-trends, you should include a portfolio of your business rivals, their offerings, services, and sales. In your new product marketing launch plan, you should outline how you can outperform your competitors. Macro trends such as interest rates and inflation can also impact your earnings profoundly, that’s why it is expedient to consider them as well in your marketing launch plan new product.
In this sample business plan for new product we will explain marketing steps to launch a new product. Based on your type of business, you may also benefit from business plan for video game or Mexican restaurant business plan .
5.1 Market Trends
In the United States, it is quite common for businesses to keep on adding new products and service lines. It is because technological changes are happening at a pace never witnessed before. Either it is needed to bring innovation to the service or product or drop the prior product altogether.
5.2 Marketing Segmentation
When you are marketing for launching a new product, you are actually adding customer segments to your business. To make sure you meet the new criteria, it is incumbent to mention the new consumer groups in your sample marketing plan for the new product launch. This will help you in reaching a wider audience as well as gathering best business ideas.
If you are marketing a new product launch , your consumer groups would depend on your niche. For instance, in the case of tobacco shop business plan , they will mostly be adults and seniors. If you make oyster farming business plan , they can be youngsters, teens, adults as well as seniors.
In this new product launch marketing plan example, we are listing a generic list of groups that can be your consumers for the new product.
5.2.1 Individuals
If you are a restaurant, a gym, or a service provider whose prior consumers belonged to individuals of all ages, your customer groups will likely remain the same.
5.2.2 Small Businesses
In case you run a business that offered services like hardware or software outsourcing, office management, office cleaning, and business consulting, then your consumers will mostly belong to small enterprises.
5.2.3 Large Businesses
Based on services, large and already established businesses can be a customer group as well.
5.2.4 Manufacturing Industries
If your new product line provides raw materials for manufacturing industries whether they deal in food, chemicals, or technical products, then your consumers will fall in this category.
5.3 Business Target
By adding a product line, NYC House Cleaners intended to:
- Acquire a CSAT score of 90+ concerning the new product
- Make at least $55k in monthly profits by the end of the first five years
5.4 Product Pricing
NYC House Cleaners decided to keep the prices of construction debris cleaning in the same range as their competitors.
Marketing Strategy of new product launch
if you are presenting a new product, you have to look for marketing strategies for a new product launch so that your consumers learn about it. You can meet your monetary expectations from the new product only if you successfully carry out your product launch marketing strategy.
In this business plan for new product sample, we are providing NYC House Cleaners’ marketing strategy to launch a new product.
6.1 Competitive Analysis
- Our biggest competitive advantage is that we have built the name and reputation of our brand by providing excellent customer service during the past years.
- We have been in contact with enterprises and contractors who will hire us for professional cleanup.
- We are situated in a location where construction cleaning service is not offered by most startups.
6.2 Sales Strategy
- We will contact our target consumers by sending our sales executive and digital business cards.
- We will offer a 20% discount to our consumers for the first two months of our launch.
- We will promote ourselves through the web and social media.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
Personnel plan of new product launch.
For putting forward a new product, you need to have a team that is acquainted with the new production procedure. While drafting your business plan for launching a new product, you should clearly define the personnel you would require to carry out additional responsibilities.
In this business plan sample for a new product , we are providing the general staff that you can need to hire to incorporate a fresh product line. You may need to hire more people according to the product specification and adjust your business plan to launch a new product accordingly.
7.1 Company Staff
- 1 Operation Manager to manage the distribution
- 1 Social Media Manager to make the product known
- 1 Sales Executive to reach out to enterprises
- 1 Web Developer to develop a website for a new product launch
- 1 Customer Care Executive to assist consumers with the new product
- 1 Business Strategy Consultant to help integrate the new functionality
- 2 Technical Assistants
7.2 Average Salary of Employees
Financial plan of new product launch.
Even if you had done accurate fiscal planning for your enterprise at the initiation time, you will need to still do it again to incorporate the new product. A new product launch will have its risks, investments and profits associated. To make sure you can generate profits and strengthen your business by putting forward the new product, it is expedient to renew financial planning in your business plan for a new product launch.
Sometimes, financial planning for a new product line is considered more complex than the one for a startup. It is because, for the new product launch, you have to carefully analyze if and how you can use your prior resources to build manpower and funding for the new venture.
In this new product launch business plan template, we are documenting the financial plan of NYC House Cleaners. These segments are taken after Max had incorporated revised figures for the product launch in his new product launch business plan.
If you are looking for legal assistance or document destruction business plan , you can have a general idea from here.
8.1 Important Assumptions
8.2 break-even analysis.
8.3 Projected Profit and Loss
8.3.1 profit monthly.
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
8.5 Projected Balance Sheet
8.6 business ratios.
Download New Product Launch Business Plan Sample in pdf
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What is a product line? Definition and examples
A product line is a group of products that a company creates under a single brand. The products are similar and focus on the same market sector. Maybe their function or channel distribution are the same or similar. Perhaps their physical attributes, prices, quality, or type of customers are the same. We call the activity product lining .
A company can have more than one product line. The number of product lines it has reflects its resources, i.e., how powerful it is.
Product line numbers might also show the other players in the marketplace how competitive the company is. In this context, the term ‘marketplace’ means the same as ‘market’ in its abstract sense.
Competitive advantage
Marketing executives believe that product lines give companies a competitive advantage . When a business has a competitive advantage, it has an edge over its rivals .
When a company has many product lines and groups them together, it creates a product mix .
Collins Dictionary has the following definition of the term :
“A product line is a group of related products produced by one manufacturer. For example, products that are intended to be used for similar purposes or to be sold in similar types of shops.”
Product line – marketing
Product lines are often part of a marketing strategy. Companies keep adding more products to attract buyers. Specifically, they want to attract buyers who are familiar with the brand.
A marketing strategy exists when you combine all your marketing goals and objectives into one comprehensive plan .
For example, a company that has a product line in grooming and hair care might add a new line in personal care. A company that makes telecommunications software may introduce a new app for tracking a cell phone . Customers who already know the brand will be more willing to buy from their new line.
In most companies, the Product Line Manager supervises a product line. This person is in charge of determining what stays and what goes. In other words, which products to get rid of and which ones to add to the range.
Let’s imagine, for example, that John Doe Inc. seeks to reach out to new customers. It may add more items to the line. We call this product line extension .
Let’s suppose John Doe Inc. produces cookies. It may want to reach out to new customers, so it adds sugar-free cookies to its line of products. It aims these new cookies at consumers with diabetes.
By doing this, John Doe Inc. will be extending its reach.
Procter & Gamble (P&G) is a good example of a company with several product lines. It has approximately 300 brands within its ten different product lines.
P&G has product lines in Baby Care, Family Care, Feminine Care, Fabric Care, Home Care, and Hair Care. It also has product lines in Personal Health Care, Grooming, Oral Care, and Skin and Personal Care.
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Marketing Essentials
Product Lines Defined and How They Help a Business Grow
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Investopedia / Mira Norian
What Is a Product Line?
A product line is a group of related products all marketed under a single brand name that is sold by the same company. Companies sell multiple product lines under their various brand names, seeking to distinguish them from each other for better usability for consumers.
Companies often expand their offerings by adding to existing product lines because consumers are more likely to purchase products from brands with which they are already familiar. A company's blend of product lines is known as its product mix or product portfolio .
Key Takeaways
- A product line is a group of connected products marketed under a single brand name by the same company.
- Firms sell multiple product lines under their various brand names, often differentiating by price, quality, country, or targeted demographic.
- Businesses often expand their offerings by adding to existing product lines because consumers are more likely to buy products from brands they already know.
- Product lines should be abandoned if they prove unprofitable, except in the case of a loss leader.
- The full portfolio of product lines is a company's product mix.
Product Line
How product lines work.
Product lines are created by companies as a marketing strategy to capture the sales of consumers who are already buying the brand. The operating principle is that consumers are more likely to respond positively to brands they know and love and will be willing to buy the new products based on their positive experiences with the brand in the past.
For example, a cosmetic company that's already selling a high-priced product line of makeup (that might include foundation, eyeliner, mascara, and lipstick) under one of its well-known brands might launch a product line under the same brand name but at a lower price point. Product lines can vary in quality, price, and target market. Companies use product lines to gauge trends, which helps them to determine which markets to target.
The Evolution of Product Lines
Companies add new items to their product lines, sometimes referred to as a product-line extension, to introduce brands to new customers. Consumers who have no interest in a company's sporting goods, for example, might be more interested in buying its product line of energy bars or sports beverages. Extending product lines allows companies to maximize their reach.
The way that companies use product lines is evident in the auto industry . Auto manufacturers famously produce various product lines of vehicles to reach the widest possible range of consumers.
For this reason, they produce lines of economy vehicles, environmentally-friendly vehicles, and luxury vehicles all under their leading brands. Some are marketed to families, some to individuals, and others to the young.
Expanding product lines enables a company to target consumers who are either already buying the brand or are likely to buy the brand.
Product Line vs. Product Mix
A product line refers to a particular good or service that a company makes and markets to customers. A food company may extend a product line by adding various similar or related products (e.g., adding mesquite BBQ flavor to its existing potato chips line), and create a more diversified product family . The product family supplies various products under the same brand name that are similar but meet slightly different needs or tastes, potentially attracting more and different customers.
If the company branches out and starts producing pretzels, this would be a different product line altogether, involving different ingredients, processes, and knowledge to make. It would also attract many of the same, but also different customers as its potato chips line. Pretzels, however, would not be in the same product line or family. Thus, adding pretzels expands the firm's product portfolio, also known as its product mix.
The product mix is important to analyze since it can identify which market segments are experiencing what trends. Companies may thus re-brand or restructure underperforming and unprofitable products, while profitable lines may be tagged to include innovative or riskier new additions to that product family.
Mature companies often have diversified product mixes. Internal product development and acquisitions contribute to its product portfolio size over time, and larger enterprises have the infrastructure to support the marketing of a broader offering. Geographic expansion can also augment a product portfolio, with products varying in popularity among cities or countries. Apple, Inc., for example, now has a product mix that includes its wildly popular iPhone devices (within which are various generations, versions, sizes, all at different price points), the iOS app store, its line of laptop & desktop computers, software development, music streaming service, Apple TV, and so on.
Special Considerations
Product lines allow companies to reach regions and socioeconomic groups, sometimes even worldwide . In some cases, such as the cosmetic industry, companies also launch product lines under their best-selling brands to capture sales from consumers of various ethnic or age groups. Multinational corporations, such as restaurants, often launch product lines specifically for the countries in which they operate, as is the case with fast-food restaurants operating in Asia.
Unprofitable product lines may still be useful for a company. A loss leader strategy, for example, introduces new customers to a service or product in the hopes of building a customer base and securing future recurring revenue. The product loses money but is sold to attract new customers or sell additional products and services to those customers that are profitable in the future.
Examples of Product Lines
- Microsoft Corporation ( MSFT ) as a brand sells several highly recognized product lines including Windows, MS Office, and the Xbox.
- Nike Inc. ( NKE ) has product lines for various sports, such as track and field, basketball, and soccer. The company's product lines include footwear, clothing, and equipment.
- PepsiCo ( PEP ) owns, among many other lines globally, Frito Lay, Gatorade, Quaker Oats, and Tropicana.
- The various product lines for Starbucks Corporation ( SBUX ) include coffee, ice cream, and drinkware.
Note that some companies never diversify beyond a single product line. Instead, they focus their efforts on becoming a market leader in just one thing . Michelin, for instance, only produces tires. Crocs only makes rubber-based footwear. Gorilla glue only makes adhesives.
Frequently Asked Questions
What are the main types of product lines.
While a company's product lines will depend on the particular business segment or industry that it operates in, marketing and organizational scholars have identified four different classifications of product line based on what is needed to bring that line to market. These include:
- New to world: A brand new product or invention, often after research & development investment. These can be highly risky but also highly rewarding if they take off.
- New additions: These are new product lines added by a company to their production, but which are not necessarily new to the world. These arise as competitors enter the market.
- Product revision: Replacements or upgrades to existing products are the third category. An iPhone X is a wholly different product from an iPhone 4S.
- Reposition: Repositioning takes an existing product and begins marketing to a different audience for a completely different use-case.
What Is Product Line Filling?
Filling refers to adding more items to a product line family in order to address any perceived gaps in the potential customer base. For instance, adding larger sizes to a clothing line can accommodate people with bigger bodies. Having sizes that fit the vast majority of individuals would fill that product line along that dimension.
What Is Product Line Pricing?
Offering different versions of an otherwise same product or service at different price points can help fill a product line based on consumer spending preferences and affluence. Car manufacturers typically offer the same base model for a given year in different trim, ranging from a no-frills economy version to a decked-out luxury version with all the expensive add-ons. These price points will attract different consumers with different budgets.
How Do You Create a Product Line?
A company will develop a product line based on the type of business it is, its particular expertise, and its marketing strategy. Market testing, R&D, and advertising campaigns are all important to bring a product line to market. Unsuccessful product lines that are unprofitable should be abandoned in favor of viable ones.
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Cosmetic Business Plan Template
Written by Dave Lavinsky
Cosmetic Business Plan
Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their cosmetic companies.
If you’re unfamiliar with creating a cosmetic business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.
In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a cosmetic business plan step-by-step so you can create your plan today.
Download our Ultimate Business Plan Template here >
What Is a Business Plan?
A business plan provides a snapshot of your cosmetic business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan
If you’re looking to start a cosmetic business or grow your existing cosmetic company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your cosmetic business to improve your chances of success. Your cosmetic business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Cosmetic Businesses
With regards to funding, the main sources of funding for a cosmetic business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for cosmetic companies.
How to Write a Business Plan for a Cosmetic Business
If you want to start a cosmetic business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your cosmetic business plan.
Executive Summary
Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your executive summary is to quickly engage the reader. Explain to them the kind of cosmetic business you are running and the status. For example, are you a startup, do you have a cosmetic business that you would like to grow, or are you operating a chain of cosmetic businesses?
Next, provide an overview of each of the subsequent sections of your plan.
- Give a brief overview of the cosmetic industry.
- Discuss the type of cosmetic business you are operating.
- Detail your direct competitors. Give an overview of your target customers.
- Provide a snapshot of your marketing strategy. Identify the key members of your team.
- Offer an overview of your financial plan.
Company Overview
In your company overview, you will detail the type of cosmetic business you are operating.
For example, you might specialize in one of the following types of cosmetic businesses:
- Niche market cosmetics: This type of cosmetic business specializes in one particular segment of cosmetics. For instance, a niche cosmetic business could sell only fragrance-free products, all vegan products, or gluten free products.
- High-end cosmetics: This type of cosmetic business develops and sells premium make-up and skin care products.
- Kids cosmetics: This type of cosmetic business specializes in producing inexpensive play-makeup products for children.
- Beauty blogger/influencer: This type of cosmetic business involves trying out products from different types of cosmetic brands and providing tutorials, reviews, and other helpful information for people who may be interested in the products. Usually, beauty companies will pay the blogger/influencer to sample or endorse their products.
- Make-up Artist: This type of cosmetic business involves providing make-up services for special occasions like weddings or graduation ceremonies.
In addition to explaining the type of cosmetic business you will operate, the company overview needs to provide background on the business.
Include answers to questions such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of customers served, the number of products sold, and reaching $X amount in revenue, etc.
- Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry or market analysis, you need to provide an overview of the cosmetic industry.
While this may seem unnecessary, it serves multiple purposes.
First, researching the cosmetic industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.
The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your cosmetic business plan:
- How big is the cosmetic industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential target market for your cosmetic business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your cosmetic business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: individuals, families, and corporations.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of cosmetic business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.
Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.
Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other cosmetic businesses.
Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes mass market cosmetic brands and retailers, as well as secondhand cosmetic retailers. You need to mention such competition as well.
For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as
- What types of customers do they serve?
- What type of cosmetic business are they?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of your competitive analysis section is to document your areas of competitive advantage. For example:
- Will you make it easier for customers to acquire your products?
- Will you offer products or services that your competition doesn’t?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a cosmetic business plan, your marketing strategy should include the following:
Product : In the product section, you should reiterate the type of cosmetic company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide premium make-up, skin care products, or esthetician services?
Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.
Place : Place refers to the site of your cosmetic company. Document where your company is situated and mention how the site will impact your success. For example, is your cosmetic business located in a busy retail district, a business district, a standalone store, or purely online? Discuss how your site might be the ideal location for your customers.
Promotions : The final part of your cosmetic marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:
- Advertise in local papers, radio stations and/or magazines
- Reach out to websites
- Distribute flyers
- Engage in email marketing
- Advertise on social media platforms
- Improve the SEO (search engine optimization) on your website for targeted keywords
Operations Plan
While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your cosmetic business, including answering calls, stocking shelves, greeting customers, and collecting payments, etc.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to acquire your Xth customer, or when you hope to reach $X in revenue. It could also be when you expect to expand your cosmetic business to a new city.
Management Team
To demonstrate your cosmetic business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally, you and/or your team members have direct experience in managing cosmetic businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a cosmetic business or successfully running a small salon.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.
Income Statement
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you expect to serve 20-30 customers per day, and will each customer purchase 1-5 items on average? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your cosmetic business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.
When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a cosmetic business:
- Cost of equipment and supplies
- Payroll or salaries paid to staff
- Business insurance
- Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or photos of happy customers using your products.
Writing a business plan for your cosmetic business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the cosmetic industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful cosmetic business.
Cosmetic Business Plan FAQs
What is the easiest way to complete my cosmetic business plan.
Growthink's Ultimate Business Plan Template allows you to quickly and easily write your cosmetic business plan.
How Do You Start a Cosmetic Business?
Starting a cosmetic business is easy with these 14 steps:
- Choose the Name for Your Cosmetic Business
- Create Your Cosmetic Business Plan
- Choose the Legal Structure for Your Cosmetic Business
- Secure Startup Funding for Cosmetic Business (If Needed)
- Secure a Location for Your Business
- Register Your Cosmetic Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Cosmetic Business
- Buy or Lease the Right Cosmetic Business Equipment
- Develop Your Cosmetic Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your Cosmetic Business
- Open for Business
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Other Helpful Business Plan Articles & Templates
How to Design and Present a New Product Business Plan
Every product you roll out for your business needs a business plan presentation. We’re going to go over business plan design, presentation and more below, so you know exactly how to formulate your new product business plan.
Defining a Business Plan
Have you ever thought of a new product and jotted a few ideas on things you needed to do to turn your idea into a reality? If so, you’ve already written a basic business plan, or at least the key components. At the core, a business plan is simply a plan for how your product would work and what you have to do to bring your product to life and make it exceed.
A business plan ranges from a single page to several pages. Most businesses can get by with a very lean plan with a few bullet points that focus on your product strategy, tactics you’ll use to develop and sell your product and milestones that’ll help track responsibilities and tasks. It should also include the financial projections you’ll have to apply to your product, like budget, cash flow and expenses .
How to Design a Product Business Plan
Before you present your product business plan, you have to design and write it out first. We’re going to outline everything you need to do to write a concise and strong product business plan that sells. The steps are:
Step One – Research, Research, Research
Analyse and research your product, your target market, and your objective expertise. Ideally, you’ll spend twice as much time on this step than you’ll spend on actually writing the product business plan. Evaluate your product and think about what you want to do with it. You have to know your company inside and out, what your product brings, any competition you may have for it. Also, do not forget the market in which you want to sell it. It’s your job to know everything you can possibly know about the market your product will enter, to build your case on why your product will beat your competition.
Step Two – Determine Your Plan’s Purpose
A product business plan is a written document that describes the product, your marketing and sales strategy, the financial implications and a profit and loss statement . Think of it as a plan or map that helps you avoid bumps in product production. If you want to attract investors for your new product, your plan will have a different purpose. Now you’ll have to write out a business plan that targets your potential investors, so it will be as concise and clear as possible.
Step Three – Create a Product Profile
Your product profile includes your audience, target market, resources, what makes your product unique, and how your product will solve a problem. Use this profile to attract your potential customers, and to describe your product plan as well as your company. This is one of the first written parts of your plan, and having this product profile makes the entire plan come together much more quickly.
Step Four – Document Every Aspect of Your Product
Any potential investors or your company board want to see how your new product is going to generate revenue for your company. Because of this, investors and the board want to know everything possible about the product. To help you with this process, you want to document everything from your cash flow and expenses to any projections you have. Don’t forget any minor details, like the licensing agreements and location strategy.
Step Five – Set Up a Strategic Marketing Plan
A solid product new product business plan / marketing plan will always include an aggressive and strategic element. You’ll want to outline various marketing objectives, such as:
- Product outline
- Defining business plan images relevant to your product and/or product function
- Building and extending the market for your product
- Breaking into new markets with your product
- Boosting sales for your new product, and be specific
- Cross-selling your new product with another
- Entering into a long-term contract with targeted clients
- Raising prices without taking away from sales
- Refining your new product
- Having a content marketing strategy in place to generate interest
- Enhance your product delivery and manufacturing process
Every new product plan should have several goals outlined, along with tactics for hitting these goals with new products. So now focus on the “what” and “why” of your marketing plan for the product’s debut year, followed by the “where”, “who”, “how” and “when”. Now it’s time to allocate a budget for every activity you plan for your new product. Create separate budgets for your out-of-pocket costs and your internal or staff costs.
Step Six – Make Your Product Plan Adaptable for Different Audiences
Your potential product plan will have a varied bunch of readers that range from employees and venture capitalists to bankers or investors. Each type of reader has different interests, and you need to know these interests up front. This way, you can take them into account when you write up your business plan for specific audiences. For example, your staff will be more interested in the plan’s objectives while the investors will be more interested in cash flow statements and balance sheets. Make sure you can easily modify your business plan design and tailor it to your audience.
Step Seven – Explain Why Consumers Need This Product
No matter if you want to share your plan with a customer, investor or team member, plan has to show that you’re dedicated and passionate. You have to show that you care about expanding your business product line, list the problems the product will solve and lay out what makes your product stand out from your competition. Maybe your product helps people do something more efficiently, or maybe it helps speed up a certain process. By explaining what your product can do for your audience, you can create an emotional connection with people who will support your product from the launch date onwards.
How to Present a New Product Business Plan
Once you write out your new product business plan, it’s time to decide how you want to present it. Business plan presentation is key to getting your product off to a strong start and to generating interest. Take a look at how to present a business plan in seven steps.
1. Get Referrals and Leads
If you have outside investors that can help with your plan, you need their phone numbers, names and addresses. Start networking, and talk to people you know who can help launch your new product. Ask your people you know for referrals, and make sure to get in touch with the people who you get referrals for.
2. Research Your Target
Learn as much as you possibly can about the industries your product will end up in, how much money you or other people will invest in the manufacturing process, and any other requirements. Look in venture capital directories and get an idea of where to present your product.
3. Make a Sales Pitch
Mail or email an introductory letter to your target audience that lets them know what plan you’d like to send to them. Sending an introductory letter is your way of subtly asking the audience if they’d be interested in reading your product business plan. In this introductory letter, you should explain why you’ve picked this person and what your product offers. You also want to explain what you’re looking for from the person like a loan, investor or a long-term supplier relationship. If you have a referral, you want to include who referred you in the start of the letter. Better never underestimate how powerful a referral can be.
Finally, you might want to include the terms under which you present your product plan. You might mention that you’re not sending your plan out to any other investor, or you may disclose that you’re contacting multiple investors. You should let the recipient know whether the communication is confidential or if they can pass it on to someone else. If you plan to include a non-disclosure agreement, you should send it between the introductory letter and your actual business plan.
If they don’t reply within a week, send a short follow-up email, and send a third around two weeks later. If they still don’t respond, look to other sources of investment.
4. Try Face to Face Meetings
Despite the fact that we’re in the midst of a digital age, you should try to meet up face to face. This is especially true if you want to actively seek investors because it’ll be hard to convince them to commit to investing in your products simply through email or texting. Skype may be a viable option, but an in-person meeting is still the best shot you have to make a major financial commitment. If they want you to communicate exclusively via electronic means, follow their lead.
5. Be Prepared to Counter Objections
You may think that your business plan answers every question your audience has, but you haven’t. You have to go into everything prepared to counter objections like assumptions about your product and your potential competitors. Have members of your team, co-workers and friends play the devil’s advocate and throw every possible direction they can think of at you and ask the tough questions. In turn, you’ll have your answers ready with it comes up for real.
6. Lock in Those Commitments
The new product business plan can help you get money for the product development. You won’t get investments in your product unless you ask for them. Once you’ve gone through all of the potential objections, be ready to offer one final concession. It could be something like an ownership percentage for your product or a board seat. Offer this as your last concession and close your deal.
7. Keep Time in Mind
When it comes to pitching your presentation, keep time in mind. You want a more formal pitch presentation for your investors. Cover all of the elements we outlined earlier. Ideally, your entire pitch deck template should last 20 minutes at the very most, and you should have a slideshow that highlights your business plan. Keep it to 10 slides or less with a host, of business plan images and diagrams to get your point across.
How Billdu Can Help With Your Product Business Plan
Billdu is a user-friendly cloud platform that helps you organise your business’ finances all in one convenient place. You can seamlessly track how your company is doing, and pull invoices or expenses quickly and easily when you need them for the product business plan writing and presenting stages.
Our platform also gives you a great idea on how feasible it is for your business to launch a new product. If you find that your business doesn’t have the cash flow to support everything that comes with setting up your business plan, it won’t look good to your potential investors. However, using Billdu, you’ll know this before you draw up your business plan. It’s an essential tool for helping keep your business on track, and you can generate different types of reports to use in your business plan based on everything Billdu has to offer.
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How to Write the Products or Services Section
Learn about this essential part of a business plan.
Alyssa Gregory is an entrepreneur, writer, and marketer with 20 years of experience in the business world. She is the founder of the Small Business Bonfire, a community for entrepreneurs, and has authored more than 2,500 articles for The Balance and other popular small business websites.
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Describe and Compare
Price points, order fulfillment, tips for writing the products or services section.
The products or services section of your business plan should clearly describe what you are selling with an emphasis on the value you're providing to your customers or clients. Include an in-depth look at all of the elements related to what you are selling.
The section needs to explain exactly what you are selling and how it fits in the marketplace. It's easier to describe the value provided if you are the only business in the area selling the product or service in question, but it is likely competitors are doing something similar.
Provide information about your competitors' offerings, how they are similar to yours, and how they are different. It's possible your business has a slightly different take on the product or service or is targeting a slightly different audience. It's also possible what you are offering is almost identical to what your competitors are offering, but demand in the marketplace is high enough to support multiple businesses doing the same thing. Explain your situation.
In addition to describing the actual products or services, break down how much they will cost. Products may come in different sizes, quantities, or varieties that will impact price, and services might be more or less extensive depending on the price being charged.
Address what competitors are doing in this regard as well. Perhaps you are offering higher or lower quality for a different demographic, but be clear about the cost and who can afford it.
Explain what happens once someone purchases what you are selling. If it is a product, they might buy it from a retail store, have it delivered from your online shop, or perhaps they submit a custom order in advance and pick it up at a later date.
If you are offering a service, it might be something that involves clients coming to you, or you might go to them. Whatever the details, make sure the process is clear.
If special technology is involved, outline what it entails. This could be specific technology you need in order to provide your services, or it might be technology clients or customers need in order to take advantage of what you're selling.
For example, if signing up clients for a training seminar, you might need specific hardware and software for a presentation. Perhaps you are selling software that requires the latest version of a particular operating system. Be sure these details are provided.
Make your description of available products or services an effective part of your business plan by following these tips:
- Focus on the customer: The purpose of the products or services section is to clearly express the benefits you're providing to your customers or clients. Focus on that goal by addressing how what you are selling benefits your customers. Show how it makes their lives better, easier, or more profitable.
- Get to the point: State the value upfront, then elaborate throughout the rest of the section while providing supporting materials. For example, if the primary benefit of what you are offering is that it saves time, state as much right away. Follow this statement with details about how it saves time and data to support the claim.
- Keep It simple: Assume the reader has little to no understanding of your industry and product or service. You're the expert in the industry, but the basics may not be as clear to those reading your business plan.
- Show what makes you unique: While describing similar products and services that are already in existence, take some time in your description to express how your product or service stands out as something different.
- Include the fine print: While the bulk of your products or services section should focus on the end result, you also should include information about your pricing and how you arrived at that price point.
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How To Write A Business Plan (2023 Guide)
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Updated: Aug 20, 2022, 2:21am
Table of Contents
Brainstorm an executive summary, create a company description, brainstorm your business goals, describe your services or products, conduct market research, create financial plans, bottom line, frequently asked questions.
Every business starts with a vision, which is distilled and communicated through a business plan. In addition to your high-level hopes and dreams, a strong business plan outlines short-term and long-term goals, budget and whatever else you might need to get started. In this guide, we’ll walk you through how to write a business plan that you can stick to and help guide your operations as you get started.
Drafting the Summary
An executive summary is an extremely important first step in your business. You have to be able to put the basic facts of your business in an elevator pitch-style sentence to grab investors’ attention and keep their interest. This should communicate your business’s name, what the products or services you’re selling are and what marketplace you’re entering.
Ask for Help
When drafting the executive summary, you should have a few different options. Enlist a few thought partners to review your executive summary possibilities to determine which one is best.
After you have the executive summary in place, you can work on the company description, which contains more specific information. In the description, you’ll need to include your business’s registered name , your business address and any key employees involved in the business.
The business description should also include the structure of your business, such as sole proprietorship , limited liability company (LLC) , partnership or corporation. This is the time to specify how much of an ownership stake everyone has in the company. Finally, include a section that outlines the history of the company and how it has evolved over time.
Wherever you are on the business journey, you return to your goals and assess where you are in meeting your in-progress targets and setting new goals to work toward.
Numbers-based Goals
Goals can cover a variety of sections of your business. Financial and profit goals are a given for when you’re establishing your business, but there are other goals to take into account as well with regard to brand awareness and growth. For example, you might want to hit a certain number of followers across social channels or raise your engagement rates.
Another goal could be to attract new investors or find grants if you’re a nonprofit business. If you’re looking to grow, you’ll want to set revenue targets to make that happen as well.
Intangible Goals
Goals unrelated to traceable numbers are important as well. These can include seeing your business’s advertisement reach the general public or receiving a terrific client review. These goals are important for the direction you take your business and the direction you want it to go in the future.
The business plan should have a section that explains the services or products that you’re offering. This is the part where you can also describe how they fit in the current market or are providing something necessary or entirely new. If you have any patents or trademarks, this is where you can include those too.
If you have any visual aids, they should be included here as well. This would also be a good place to include pricing strategy and explain your materials.
This is the part of the business plan where you can explain your expertise and different approach in greater depth. Show how what you’re offering is vital to the market and fills an important gap.
You can also situate your business in your industry and compare it to other ones and how you have a competitive advantage in the marketplace.
Other than financial goals, you want to have a budget and set your planned weekly, monthly and annual spending. There are several different costs to consider, such as operational costs.
Business Operations Costs
Rent for your business is the first big cost to factor into your budget. If your business is remote, the cost that replaces rent will be the software that maintains your virtual operations.
Marketing and sales costs should be next on your list. Devoting money to making sure people know about your business is as important as making sure it functions.
Other Costs
Although you can’t anticipate disasters, there are likely to be unanticipated costs that come up at some point in your business’s existence. It’s important to factor these possible costs into your financial plans so you’re not caught totally unaware.
Business plans are important for businesses of all sizes so that you can define where your business is and where you want it to go. Growing your business requires a vision, and giving yourself a roadmap in the form of a business plan will set you up for success.
How do I write a simple business plan?
When you’re working on a business plan, make sure you have as much information as possible so that you can simplify it to the most relevant information. A simple business plan still needs all of the parts included in this article, but you can be very clear and direct.
What are some common mistakes in a business plan?
The most common mistakes in a business plan are common writing issues like grammar errors or misspellings. It’s important to be clear in your sentence structure and proofread your business plan before sending it to any investors or partners.
What basic items should be included in a business plan?
When writing out a business plan, you want to make sure that you cover everything related to your concept for the business, an analysis of the industry―including potential customers and an overview of the market for your goods or services―how you plan to execute your vision for the business, how you plan to grow the business if it becomes successful and all financial data around the business, including current cash on hand, potential investors and budget plans for the next few years.
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Julia is a writer in New York and started covering tech and business during the pandemic. She also covers books and the publishing industry.
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Product Line Plan
A product line plan is a time-phased conditional plan for the sequence of developing the new products of a product line that is itself the result of the product strategy process. There are several important elements of this definition. The product strategy determines the sequence in which products are developed and released. This sequence is time-phased throughout the lifecycle of a product line. Finally, the product line plan is conditional in that it can change in response to changes in market conditions, competitive factors, or resource availability. A product line plan may also be called a product roadmap.
Let's look at the example of the product line plan for CRI's Retail Robotics division, as illustrated in Figure 20-2. The division has three product lines , and the plan covers a 10-year horizon. The top two product lines are derived from the same product platform. The product line at the bottom includes the four currently marketed robots in what CRI refers to as its Early Robot Series. There are no new planned products for this product line. The rest of the product line plan is comprised of planned products. In the figure, CRI uses a notation scheme in which the lighter portion of each planned product indicates the development cycle (with the approximate phases marked) and the darker portion indicates the expected lifecycle of the product once it is released to market. For example, the Fast-Food Robot I product is currently in development in Year 1 and is planned to come to market in Year 4. From its release, it is expected to have a market life of a little less than four years.
F nit-Food Robot Product Line
Ptctflil Aobot Product Line
Dis-penier Robnf
TÉfc»0lJf Rttot
T icK-I-T aker Rabot fol » I after Koset
Early Ffobot Series
Figure 2G-2: CRI's Retail Robot Product Line Plan
The Fast-Food Robot II is planned to go into development at the beginning of Year 4, and to be released to market in the middle of Year 6. Once released, this product is expected to cannibalize the Fast-Food Robot I, which is planned to be phased out by the second half of Year 7.
In the Retail Robot product line there is currently one product in development in Year 1, with an expected market release sometime in the middle of Year 5. Development of this product was intentionally delayed so that the Fast-Food Robot I could get to market first and some of the early experience from that product could be incorporated into the Retail Robot.
With integrated product strategy, information on the products already in development in Year 1 (the Fast-Food Robot I and the Retail Robot I, in this example) comes from the DCM system. The phase dates on the plan are the actual phase dates from the project teams developing those products, and, as we will see, the resource and financial information attached to these products also comes from the actual project information.
There are also interrelationships among planned products. As part of the product planning process, these interrelationships can be defined similar to the way interrelationships were defined among the steps within a project. One of these interdependences is depicted in the chart. It indicates the relationship of the Fast-Food Robot I to the completion of Phase 0 of the Fast-Food Robot II.
Planned Products
A planned product is a new product that is not yet started in development, but is formally on the planning horizon to be developed. Generally, each planned product is represented on the product line plan by an approximate date when development is anticipated to begin, an estimated duration of development, and an expected lifecycle once released to the market.
Planned products are the essential element of product strategy, similar to the way that project steps are the essential element to a project plan and projects are the essential element in portfolio management. When product strategy is integrated into a DCM system, planned products are "active," meaning that they have associated characteristics such as the expected revenue forecast. And, once a planned product is active, the information on it can be used throughout the DCM system.
Figure 20-3 illustrates some of the characteristics that make an active planned product. The Fast-Food Robot II planned product has a development cycle defined by the duration of the development period indicated with the lighter shading, and a revenue-generating period indicated by the duration of the darker shading. A planned product is created based on an estimated development period and lifecycle, and, if either of these is changed, then the planned product is moved forward or backward in the time schedule. The development schedule at the phase level indicates when each phase is expected to start and end. Moving this planned product forward or backward in time would automatically change the phase-date schedules. In addition, the cycle time for any of the phases could also be adjusted, and this would reposition the planned product on the product line plan.
Planned Product
High-level High-Level HififvLevel Planned
Budget Resource PrdNe Financial Revenue
Figure 20-3: Characteristics of a Planned Product
The Fast-Food Robot II planned product also has several important attached characteristics. A high-level resource profile is attached to the development portion of this product, which estimates the resource requirements by phase for skill categories that are most useful for medium- and long-term resource planning. These resource estimates are tied to the phase, so moving the phase dates would, as we just saw, reposition the resource needs and project budgets into different months for planning purposes. We'll see how this information is used shortly. In addition, a project budget, again by phase at a high level of aggregation, can also be attached.
Financial estimates for the new product, including a revenue profile, are attached to the revenue portion of the Fast-Food Robot II planned product. These estimates are based on the starting date for the release of the Fast-Food Robot II product, and any change in that date will shift the timing of revenue and financial projections accordingly. Minor shifts in time of release could simply move forecasted revenue forward or backward, but any major change would most likely require new forecasts.
Planned product characteristics (the attached information) are used throughout other systems and processes in an integrated DCM system. In Chapter 6 we talked about medium-term capacity planning and how the introduction of planned products into medium-term capacity planning enabled an important extension in the resource-planning time horizon. It's these characteristics of planned products that provide the resource information necessary for this extended horizon. Likewise, longer-term capacity planning is dependent on the time horizon for planned products. In Chapter 18, where we looked at dynamic portfolio and pipeline management, we made reference to the inclusion of
Estimates planned products. And in our discussion and examples in Chapter 19 on comprehensive financial management, we used the financial information attached as characteristics of planned products.
Standard Planned Product Profiles
When a planned product is created during product line planning , the characteristics we just discussed are also defined. While this may be somewhat time-consuming, the broad use of planned products throughout product development makes it worth the time.
In addition, some companies may choose to define standard profiles for planned products in order to simplify the work needed to create planned products. These profiles include standard characteristics such as phase durations, resource estimates by phase, development budget estimates, etc., for the development efforts of different types of products. For example, there could be standards for a simple product modification, a major product in an existing product line, a new product platform, a major technical upgrade to a product, and so on. When putting together a product line plan, these standard, planned product profiles can be used as the starting point, automatically adjusting the characteristics for the planned start time, which in turn can be adjusted as necessary.
Similarly, standard, planned product profiles can also include typical revenue and financial estimates. The standard then provides the starting point for the product being planned, and these financial estimates can also be adjusted. Standard, planned product profiles can be created for various types of products, such as minor products, major products, and revenue-enhancing upgrades of existing products.
In addition to making the product planning process more efficient, standard, planned product profiles can also increase the consistency of product strategy. At this point, so early in the thinking about a new product, estimates of development costs and sales revenues are tentative at best, but it's still valuable to have some estimates to work with at the beginning. These cursory estimates can be refined as the product moves into development. The point here is that starting out with a consistent set of standards helps focus thinking on the anticipated resource needs and financial estimates of each planned product.
Simulating the Feasibility of a Product Line Plan
When product strategy is integrated within a broader product development process and DCM system, as it is in the next generation of product development, alternative product line plans can be tested against capacity to determine their feasibility. This feasibility testing makes the resulting product line plan much more realistic.
Since planned products and current projects compete for resources, any capacity feasibility analysis must include both. By adding planned products to the development pipeline, alternative product line plans can be simulated against capacity, and the feasibility of each alternative plan can be tested. At the same time, the expected financial outcome, such as revenue by year, can be projected for each alternative. Once the set of feasible product line plans is determined, the financial outcomes can be compared and the most attractive plan selected.
We already saw an example of this pipeline simulation and optimization in Figure 18-3. With a fully integrated product strategy process, the ability to examine alternative product line plans is added to this simulation and optimization.
Continue reading here: Implementation Planning
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Readers' Questions
How many steps involved in product planning process?
There are typically 7 steps involved in the product planning process: Identifying customer needs and market opportunities Setting product objectives Developing a product strategy Designing the product Developing a marketing plan Managing the product life cycle Measuring and evaluating performance.
What is frequently the most timeconsuming stage of product development?
The most time-consuming stage of product development is usually testing and validation. This stage involves testing the product in various scenarios to ensure that it is able to handle different inputs and outputs, as well as to identify any potential flaws or issues that may require further attention.
What simply refers to product planning?
Product planning is the process of anticipating customer needs and defining the features, price, and timing of a product launch. It is a key step in the product life cycle, which helps a company optimize the return on its development investments. Product planning involves a range of activities, including market research, competitive analysis, customer profiling, product concept development, design and engineering, pricing, product launch and post-launch support.
What is product line management?
Product line management is the strategic management of a company’s product offerings, overseeing the product life cycle, pricing and marketing of a particular product line. It encompasses the development, production, sales, and promotion of the product. Product line managers typically analyze market trends and consumer preferences to develop product strategies and manage the response of the product line to the market. They also work closely with research and development teams to ensure that product specifications are met, and with sales and marketing teams to ensure that product lines are adequately promoted and sold.
What are product line plan characteristics?
8+ SAMPLE Product Business Plan in PDF
Product Business Plan
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Executive summary.
- What have you been doing in your business?
- What do you want to do in the future?
- What are you selling and what makes it unique?
- Who are the people that you will be selling to?
- How can you attract your customers?
- How much is your current revenue?
- What are your plans for your sales forecast?
- How much profit do you want?
- Who is your team?
Business Description
- The type of business, whether you are incorporation, sole proprietorship, or partnership
- The business model that you are using
- The industry where your business belongs
- The mission statement and vision statement of your company and your core values
- Background data of your company and your company’s history
- Long-term objectives and short-term objectives
- The management, including all staff members, together with their salaries
Market Analysis
- Know every customer profile and its demographics. If you are targeting specific consumers, look for their government information. Look at the range of changes that can happen in the following years.
- Research market trends. Find information on how consumption will change in particular groups. Look at the common trends on your products. Know how the industry is going.
- Give right guesses. Make valid points that can set your products to the right market.
Competitive Analysis
- You must have leadership by maximizing your profits. You can do this by giving lower prices on products compared to your competitors.
- You should offer a distinct product that stands out in the industry. This can differentiate you from your competitors.
- Focus on a particular niche so you can have a target market. Build a small audience before going into a wider market.
Organizational Chart
Product description, consumer segmentation.
- The place where the customer lives
- The range of age
- The educational attainment
- The usual behavior observation
- The way the customers spend their free time
- The place where the customers work
- The technology that the customers use
- The salary of customers
- The place where the consumers work
- The beliefs and opinions of consumers
Marketing Plan
- How much is the price of your product? Why have you chosen that price?
- What are your products? What sets your products apart from other products?
- How can you make your products to be bought by consumers?
- Where are you going to sell all your products?
Operational Plan
- Where do your materials come from? Where are you going to produce your products?
- Will you manufacture your products? How long will the product take to be made? What is the best season to make your products?
- Where will your team be going to work? What kind of space do you have?
- What technology do you use?
- How will you handle shipping?
- Where will you store your products?
Financial Plan
Step 1: good product description, step 2: consider competition, step 3: consider future products, share this post on your network, you may also like these articles, 14+ sample project assessment plan in pdf.
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Business Plan Section 4: Products and Services
To give others a clear understanding of the value your product or service provides, read about 11 important things to include in this section of your plan.
This is the part of your business plan where you will describe the specific products and services you’re going to offer. You’ll fully explain the concept for your business, along with all aspects of purchasing, manufacturing, packaging, and distribution. You’ll go over suppliers, costs, and how what you’re offering fits into the current market and stacks up against your competitors.
How do you write the Products and Services section of a business plan?
While your product may be technical, don’t get caught up in complicated industry jargon. Explain and describe what you’re offering in layman’s terms, so someone who isn’t familiar with your business will understand and be excited about it. It may be necessary to give some basic background if this is an area or industry people are unfamiliar with.
While you write up the Products and Services section of your business plan, keep your reader in mind. Things that you might take for granted or know inside-out might not be common knowledge to potential lenders or investors. As you write, avoid being too technical, assuming too much knowledge from your readers, and using buzzwords.
You don’t want to come off as condescending, but you do want to make sure everyone understands what you’re talking about. To see if you’ve succeeded, have some trusted people who aren’t in your industry proof-read this section for you, and ask them to explain your product or service in their own words, along with the benefits to using them.
Here are the points you want to write up in the Products and Services section of your business plan:
The Product or Service Description
What is your product and service, and how does it work? How does it benefit customers? How do you make it or how will you get it made?
Product Comparison
What makes this product or service unique or better than what’s already available in the market? Why would someone choose to buy your product or do business with you over someone else?
Accreditations/Intellectual Property
Have you had the product tested or certified? Gotten approvals from industry experts? Did you trademark, copyright, or patent your product ? These can add substance and credibility, so be sure to mention them.
Where are you currently with this product or service? Is it in the idea stage or do you have a prototype? Have you produced some and are looking to expand? Have you started offering this service already or are you still in the planning stages ?
How much will you charge for the products or services you’re offering? Where does this fit in with what’s currently available?
Sales and Distribution Strategy
How will you sell it? Will you market it online or in retail stores? Have you lined up any vendors? How will you distribute it or deliver the service you’re providing?
Fulfillment
How will you fill orders or deliver the service? Will you manufacture items yourself or outsource to someone else? Who will handle distribution, and how?
Requirements
Will you need any special equipment or technology to provide your product or service?
Do you envision future products or services as an extension of the business once it’s successfully launched?
Photos or Brochures
It’s beneficial to include a visual representation of your offering. Photos or brochures would generally get put in the plan’s appendix, but you would refer to them in this section.
How Do You Stand Out?
Perhaps most importantly, emphasize how and why you are competitive. How do you stand out, and why does this business have such a terrific chance at succeeding? In talking about your product or service, always try to answer why a client would want it. How will your offering make your customers’ lives better or more profitable? What need are you fulfilling or what problem are you solving?
To sum up, the product and services section of your business plan gives the reader a clear understanding of why you’re in business, what you sell, how you compete with what’s already available, or how you fill a niche that no one else is meeting.
Next > Business Plan Section 5: Market Analysis
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Product Strategy
What is a product strategy.
A product strategy is a high-level plan describing what a business hopes to accomplish with its product and how it plans to do so. The strategy should answer key questions such as who the product will serve (personas), how it will benefit those personas, and the company’s goals for the product throughout its life cycle.
Why is Product Strategy Important?
Building out a product strategy before you begin development is necessary because it serves three valuable business purposes.
1. A product strategy provides clarity for your company.
Your team will be in a better position to deliver their best work when you draft and communicate a clear and well-thought-out strategy for your organization.
Your developers will understand how the parts of the product they’re working on contribute to the larger companywide strategic goals. Developers can sometimes feel caught amongst all the details and lose sight of the overarching purpose behind their work. A product strategy clarifies that for them.
Your marketing and sales teams will be able to articulate the product’s benefits and unique selling proposition. However, without a defined strategy behind a product—generating anticipation and sales becomes difficult.
Additionally, your customer success team will better understand your product’s use cases and provide better support for your users’ frustrations.
2. It helps you prioritize your product roadmap.
After you’ve earned stakeholder agreement for your proposal, it will be time to translate that strategy into a high-level action plan and then build a compelling product roadmap.
3. A product strategy improves your team’s tactical decisions.
No organization delivers a product to the market following the exact plan drafted in the initial roadmap. Things change along the way, and product managers need to be prepared to adjust their plans and priorities to deal with those changes.
When you and your team have a clear product strategy as a reference point, you can make smarter strategic decisions about adjusting your plans, especially if you lose resources or need to change your estimated timetables.
A Product Strategy Template
Here is a template you can use to follow the three-step process above.
Define your vision.
Add bullets to describe each of the outer circles above—competitors, personas, etc. During this exercise with your team, a picture should emerge of the problem you hope to solve for your market, for example, and the people and businesses it will help.
The exercise should help you develop a vision for your product.
Establish your product goals.
Next, add your goals for the product. For each goal, decide on a quantifiable way to track its success and set a deadline as well.
Create your product initiatives.
Now it’s time to translate your product goals into high-level themes that you can add to your product roadmap. Once they’re on the roadmap, your cross-functional team will review these themes, break them into detailed tasks, and begin working on them.
What are the Key Components of a Product Strategy?
Product management expert Roman Pilcher suggests a strategy should contain the following key elements:
- The market for the product and the specific needs it will address.
- The product’s key differentiators or unique selling proposition.
- The company’s business goals for the product.
Another way to understand this is that a product strategy should include the following three components:
1. Product vision
As we discussed above, product vision describes the long-term mission of your product. These are typically written as concise, aspirational statements to articulate what the company hopes the product will achieve. For this reason, a product vision should remain static.
For example, Google’s early vision statement for its search engine was, “Organize the world’s information and make it universally accessible and useful.”
A product vision should lead to high-level strategic goals . These goals will, in turn, influence what the team prioritizes on its product roadmap. Examples of product goals include:
- Increase free-trial downloads by 50% in the next 6 months
- Improve our average customer rating by one star on major product-review sites
- Generate $3MM in revenue within 12 months
Using SMART goals is the best approach to utilize when setting goals for your product strategy. Like product roadmaps, goals should be specific, measurable, attainable, relevant, and time-bound.
3. Initiatives
Initiatives are the strategic themes you derive from your product goals and then place on your roadmap. They are significant, complex objectives your team must break down into actionable tasks. (The product roadmap is, after all, only the high-level blueprint.)
Examples of product initiatives include:
- Improve customer satisfaction
- Increase lifetime customer value
- Upsell new services
- Reduce churn
- Add customer delight
- Break into new industries or geographical areas
- Sustain product features
- Increase mobile adoption
Where Does Product Strategy Fit in the Development Plan?
The product strategy should bridge your product vision and the tactical steps to fulfill that mission.
First, your team will develop the vision for the product. For example: “We will help businesses unlock valuable information by making their data more accessible and useful.”
( Note: Your team might also choose to draft a separate product mission at this stage. But product vision and mission are both concise, high-level statements conveying your big-picture aspirations for the product. You can create just one if you prefer.)
After you’ve settled on this vision, you can then work on the product strategy. This step will involve answering questions such as:
- Who are our personas for this product? (In the hypothetical above, the answer might include business analysts and database administrators.)
- What problems will our product solve for these personas? (One example: the product will allow users to easily combine data sets from multiple applications without having to convert formats or copy and paste.)
- What are our near- and long-term goals for this product? (Here, you might set a goal to sign up a certain number of users within the first two quarters after launch and to capture a percentage of the market within three years.)
After your team has built out the product strategy, it will be time to translate it into an action plan by prioritizing the major themes on a product roadmap.
You will then use this roadmap to build a detailed plan, including a product backlog , planning for the development team’s sprints, and developing a project timeline.
Learn how to align your product strategy with customer feature requests:
What are effective product strategy business models.
To this point, we’ve focused on the mechanics of developing a product strategy. What about the substance of the strategy? What types of business or revenue models should a company consider when coming up with its product strategy?
Here are a few examples of effective models for product strategies.
1. Product-led growth
We’ve written an in-depth article on how Zoom used the product-led growth (PLG) model to dominate during the pandemic. But here’s the bottom line: With the PLG approach, a business focuses on making the product its marketing and sales representative.
In many cases, such as with companies like Dropbox and Spotify, that means making the product free for a certain level of service and charging only users who want to upgrade to more advanced features. Because they find the basic service valuable, users tell their coworkers and friends, who also sign up for the product.
In other cases, businesses use the network effect to succeed with product-led growth. Companies like Slack and Zoom have benefited from this model. Zoom, for example, refocused its efforts early in the pandemic to make its app more user-friendly for the many new business users who needed it to connect while quarantined at home. The company also created features for new customers—notably schools—that would have unique needs.
2. Product segmentation
One product strategy proven effective by many companies—including Zoom—is to build different versions of a product to meet the unique needs of different personas.
For example, if you build apps for cybersecurity, you might choose to create a consumer version. The key selling feature of this app might be that it runs entirely in the background, protecting the user’s data and devices.
Your team might then build an enterprise version targeted at IT professionals, where your key selling points will be different. In this case, you will make sure the app makes it easy for businesses to comply with data privacy laws. You will also focus on building an administrator dashboard that gives the IT team a real-time view of its digital environment security.
3. The lean product differentiator
In the early days of the web, Yahoo! held the dominant position for an online search. But the company’s homepage was cluttered with links, buttons, and ads.
Then Google came along with a home page with almost no links, not a single ad, and comprised almost entirely white space. The only explicit following action on the Google homepage was to type in a search request. We know who won that competition.
One viable strategy is to release a product that lets users perform only a single task. The key is to ensure that 1) the task solves a real problem that your persona is facing, and 2) your product makes completing this task easy.
This strategy can work whether your product has competitors on the market (as Google did with Yahoo!) or you’re creating a new product category.
Suppose your product is easy to use and solves a real problem for your market. In that case, making the product as lean and focused as possible is a great strategy and a valuable product differentiator.
Related Terms
product strategy framework / product vision / product mission / product roadmap / product-led growth
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Tesla stock down as investor day falls short on specifics
- Tesla CEO Elon Musk took the stage to present his "Master Plan Part 3" for the company at its 2023 investor day in Austin, Texas.
- The company's manufacturing leader, Tom Zhu, revealed that Tesla had produced 4 million cars as of Wednesday.
- The presentation was long on vision and a review of prior achievements, but short on specifics about any new Tesla products or services.
In this article
Electric vehicle maker Tesla hosted a 2023 investor day presentation in Austin, Texas, on Wednesday. CEO Elon Musk took the stage to share his "Master Plan 3," and to discuss how Tesla plans to scale up in the face of increasing competition.
The presentation was long on vision, and included a review of prior achievements, but short on specifics about any new Tesla products or services.
Near the beginning of the presentation, Musk said: "There is a clear path to a sustainable-energy Earth. It doesn't require destroying natural habitats. It doesn't require us to be austere and stop using electricity and be in the cold or anything." He added, "In fact, you could support a civilization much bigger than Earth, much more than the 8 billion humans could actually be supported sustainably on Earth."
Musk was initially joined on stage by Drew Baglino, senior vice president of powertrain and energy engineering at Tesla. They discussed a future in which the company would play a role in "re-powering the grid with renewable fuels" as they ramp up battery production, both for Tesla's electric vehicles and for the company's utility-scale energy storage systems.
Tesla's goal is to produce 20 million electric vehicles per year by 2030, executives reiterated. The company reported full-year deliveries of around 1.31 million vehicles in 2022.
During a question-and-answer session following the three-hour presentation, executives fielded a question about how Tesla could grow its market share in China.
Elon Musk passed the question to Tom Zhu, who is heading up global production and has run the China and APAC businesses for Tesla for years. "As long as you offer a product with value at affordable price you don't have to worry about demand," Zhu said. "We try everything to cut costs," he added, "and pass down that value to our customers."
Musk then added, "Demand is a function of affordability not desire." He said, "Even small changes in the price have a big effect on demand."
Zhu also announced that as of Wednesday, Tesla had produced 4 million cars in total.
"It took us 12 years to build the first million, and about 18 months to the second million. The third million, 11 months. Then less than seven months to build the 4 millionth," Zhu said, touting the company's improving operational efficiency.
He said Tesla plans to construct new car and battery cell factories, and also to produce more cars per year at its existing factories.
Tesla charging leader Rebecca Tinucci said that in 2022 the company provided 9 terawatt hours across charging methods, including home charging including 40,000 Superchargers. (By way of comparison, the entire U.S. consumes about 4,000 terawatt hours of electricity per year.) Tinucci also noted that about half of the company's Superchargers in the EU are open to other vehicles, and that the company just opened 10 Superchargers in the U.S. to non-Teslas.
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Tesla design leader Franz von Holzhausen and the company's vice president of vehicle engineering, Lars Moravy, took the stage to show off a number of planned manufacturing changes meant to improve the efficiency of Tesla vehicle production. But von Holzhausen said that Tesla would not yet reveal its "next gen" vehicle.
The company's powertrain vice president, Colin Campbell, said that Tesla's next powertrain factory will be 50% smaller than the one in Austin but will have the same capacity. He also said the company is working on a new kind of drive unit that is compatible with any battery cell type, and a motor that will be built without any rare earth metals.
Ahead of the 2023 investor day, at a news conference on Tuesday, Mexico's president, Andres Manuel Lopez Obrador, said Tesla had agreed to build a large factory in Monterrey, Mexico . He said the company agreed to use recycled water and take other initiatives to cope with water scarcity in the region.
Musk confirmed the factory plans on Wednesday, and said production there would supplement, rather than replace, any manufacturing at other Tesla facilities.
Tesla shares have rebounded from declines during 2022, and are up more than 60% for the year so far. However, the stock dropped 1.43% on Wednesday before the event, and 5% after-hours.
Mizuho Securities analysts maintained a buy rating on shares of Tesla ahead of investor day, seeing the company in a leadership position in a growing market for fully electric vehicles. They wrote in a note earlier this week, "Near-term, we see continued strength in TSLA's market share, but see cheaper competitor EVs coming to market as potentially dilutive to TSLA's share of the US EV market."
Currently, the lowest-priced Tesla available is the Model 3 sedan, which starts at a price point of around $43,000, they wrote. Seven models from other automakers are currently priced below that, Mizhuo noted.
Musk's ambitious "Master Plan, Part Deux " was published in 2016, and has not been completely fulfilled. It included four main objectives:
- "Create stunning solar roofs with seamlessly integrated battery storage"
- "Expand the electric vehicle product line to address all major segments"
- "Develop a self-driving capability that is 10X safer than manual via massive fleet learning"
- "Enable your car to make money for you when you aren't using it" .
— CNBC's Michael Bloom contributed to this report.
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Product Line
What is the Product Line?
Product Line refers to the collection of related products marketed under a single brand, which may be the flagship brand for the concerned company. Typically, companies extend their product offerings by adding new variants to the existing products with the expectation that the existing consumers will buy products from the brands they are already purchasing.
Table of contents
Explanation, how does the product line work, examples of product line, product line extension, disadvantages, recommended articles.
The concept revolves around the idea of leveraging brand awareness and customer loyalty. People usually are driven towards products of those brands that they have used in the past because they feel they can trust any new product under that brand. So, it is advisable to add a new product variant under an existing line of product or brand.
Some of the larger companies have multiple product lines marketed under various brand names, which is a strategy to differentiate the products from each other so that the companies can easily target the requisite customer segment for each brand.
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The product line is considered one of the best marketing strategies that companies often use to expand market reach by capturing the sales of customers and already loyal buyers of the brand. As already explained above, the operating principle of this marketing strategy is that consumers respond affirmatively to brands that they already know and, as such, are more likely to buy the new products based on their positive brand experience or something adjacent to brand recall.
For instance, a bakery-based company may have various products under different brand names, some targeting price-sensitive consumers while others for consumers who value quality more than the price, alongside other regular product lines.
Some of the prime examples are discussed below –
- Amul offers a plethora of product lines that are closely related but still different. Its products include milk, flavored milk, chocolate, butter, curd, yogurt, ghee, etc.
- As a global brand, PepsiCo has many other sub-brands that cater to different product segments, such as Frito Lay, Quaker Oats, Gatorade, and Tropicana.
- Microsoft Corporation offers a series of products for different segments. It sells several well-recognized product lines, including MS Office, Windows, and Xbox.
The term “product line extension” refers to the situation where a company introduces a new product that is somewhat different from the company’s existing range of products. This strategy aims to expand the number of options available to a customer under a single brand. Some of the major benefits of the extension are as follows –
- It reduces the risk of introducing new products in the market. The existing customers familiar with the old set of products become the consumer of the new product.
- It helps widen the customers’ choices, resulting in more market share. The choices can be higher and low-price versions that cater to different customer requirements and segments.
- It can help grow business by leveraging the established and loyal customer base.
- Long-standing relationships with retailers and suppliers support marketability.
- Owing to existing expertise, it results in a low production cost, which is partly due to economies of scale Economies Of Scale Economies of scale are the cost advantage a business achieves due to large-scale production and higher efficiency. read more .
- It helps in catering to the variety of needs of the consumers.
- Any mistake in product line extension may result in loss of brand recall and reliability.
- The new variant may generate damaging implications for the original product, which can be catastrophic for the entire brand.
- There are chances of failure in case the product line extension has no competitive advantage Competitive Advantage Competitive advantage refers to an advantage availed by a company that has remained successful in outdoing its competitors belonging to the same industry by designing and implementing effective strategies that allow the same in offering quality goods or services, quoting reasonable prices to its customers, maximizing the wealth of its stakeholders and so on and as a result of which the company can make more profits, build a positive brand reputation, make more sales, maximize return on assets, etc. read more over its rival brands in the concerned category.
Companies continue to add new products or extend the existing ones to improve their product mix to build a strong competitive advantage. So, it can see that marketing professionals consider that the product line offers the company a competitive edge over its rivals. However, it is equally important to maintain each line efficiently; otherwise, it can harm the company’s reputation.
This article has been a guide to what a product line is and its definition. Here we discuss how the product line works along with examples, extensions, analyses, advantages, disadvantages, and differences. You may refer to the following articles to learn more about finance.
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We discuss nine components of a model business plan here: Key partnerships Note the other businesses or services you'll work with to run your business. Think about suppliers, manufacturers, subcontractors, and similar strategic partners. Key activities List the ways your business will gain a competitive advantage.
In the Products and Services section of your business plan, you will clearly describe--yep--the products and services your business will provide. Keep in mind that highly detailed or...
From the Small Business Administration The Service or Product Line section of your business plan should demonstrate how your particular product will fill a need for your target customers. WHAT TO INCLUDE IN YOUR SERVICE OR PRODUCT LINE SECTION… A DESCRIPTION OF YOUR PRODUCT / SERVICE
In order to successfully market a product, many teams focus on the 10Ps: product, price, people, process, promotion, programs, place, physical environment, partners, and positioning. The right template allows you to answer the key questions about each of these elements.
Business plans include details about products and services you'll offer, including exactly how you plan to market, sell, and deliver on customer orders. The best business plans are clear and concise. The products and services section of your plan should show off why your product or service is needed.
A product line refers to an array of related products under the same brand. In other words, a product line is a collection of similar products that are sold to customers. Summary A product line is an array of related products. Products under a product line can be related by functionality, target market, price range, or brand.
Product planning involves all of the internally focused decisions, steps, and tasks necessary to develop a successful product. In other words, it involves everything you must do that affects the product itself. By contrast, go-to-market planning involves all external-facing steps to introduce and market your product to the public.
A Sample Natural Hair Product Line Business Plan Template 1. Industry Overview The natural hair product business is a business whose products are used all across the world by both males and females who are keeping their natural hair especially people of Africa descent.
Step1: Create Business Plan New Product The foremost step is to study as many business plans for new products as are available. They will help you understand the process for different types of businesses. After that you should delineate launching a new product plan.
Product lines are often part of a marketing strategy. Companies keep adding more products to attract buyers. Specifically, they want to attract buyers who are familiar with the brand. A marketing strategy exists when you combine all your marketing goals and objectives into one comprehensive plan.
A product line is a group of related products all marketed under a single brand name that is sold by the same company. Companies sell multiple product lines under their various brand names,...
Traditionally, a marketing plan includes the four P's: Product, Price, Place, and Promotion. For a cosmetic business plan, your marketing strategy should include the following: Product: In the product section, you should reiterate the type of cosmetic company that you documented in your company overview.
Step Five - Set Up a Strategic Marketing Plan. A solid product new product business plan / marketing plan will always include an aggressive and strategic element. You'll want to outline various marketing objectives, such as: Product outline; Defining business plan images relevant to your product and/or product function
Step 5. This last step involves the development of a product roadmap and more detailed release plans for the coming quarters consistent with the product strategy. This roadmap becomes the official "product plan of record" and should be managed with formal change control procedures.
Focus on the customer: The purpose of the products or services section is to clearly express the benefits you're providing to your customers or clients. Focus on that goal by addressing how what you are selling benefits your customers. Show how it makes their lives better, easier, or more profitable. Get to the point: State the value upfront ...
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
The product strategy determines the sequence in which products are developed and released. This sequence is time-phased throughout the lifecycle of a product line. Finally, the product line plan is conditional in that it can change in response to changes in market conditions, competitive factors, or resource availability. A product line plan ...
What is a Product Business Plan? A product business plan is a document that states the goals and objectives to make a product successful. This business plan is particularly about the products that entrepreneurs have. It centers on the products that they are making to have a place in the market.
Here are the points you want to write up in the Products and Services section of your business plan: The Product or Service Description What is your product and service, and how does it work? How does it benefit customers? How do you make it or how will you get it made? Product Comparison
A product line is an assembly of related products marketed under one brand sold by a company. Companies can operate several lines under a single brand, but sometimes they have multiple brands. Companies can release an entirely new product line or extend an existing one. Product managers and other marketers are the principal people responsible ...
A product strategy is a high-level plan describing what a business hopes to accomplish with its product and how it plans to do so. The strategy should answer key questions such as who the product will serve (personas), how it will benefit those personas, and the company's goals for the product throughout its life cycle.
Making a business plan can help you create consistent messaging regarding your clothing line's primary objectives and fundamental values. Defining what your company stands for helps attract investors and also helps generate greater interest from top-tier managerial talent seeking a business model they can believe in.
Tesla CEO Elon Musk took the stage to present his "Master Plan Part 3" for the company at its 2023 investor day in Austin, Texas. The company's manufacturing leader, Tom Zhu, revealed that ...
What is the Product Line? Product Line refers to the collection of related products marketed under a single brand, which may be the flagship brand for the concerned company. Typically, companies extend their product offerings by adding new variants to the existing products with the expectation that the existing consumers will buy products from ...