Advance Business Planning

Questions: 1. Describe the difference between the market analysis section and the marketing plan section of a business plan. Why is it important for the marketing plan to be developed with the customer plainly in mind? Describe the difference between cost-based pricing and value-based pricing. 2. Why is it important to include an operations plan in a business plan? What is an operations flow diagram, and why is it important? Answers: 1. The market analysis section of a business plan is a short introduction listing factors of a marketplace in brief. This includes potential customers, demographics or sales trends that influence the market, price range, competitors, and technology to be applied (Barringer, 2015). On the other hand, the marketing plan section of a business is the blueprint or a comprehensive document that outlines the marketing and advertising strategies for the upcoming year. It involves the activities that are required to accomplish the objectives within a particular time frame. A marketing plan must comprise sales strategies, promotion, advertising, and pricing. It involves a description of the marketing mix (Barringer, 2015). It is of utmost importance that the customers are kept in mind while developing a marketing plan as the customers are at the receiving end. The marketing plan must be such that the customers are satisfied. This would attract new clients, and the business would flourish. Cost-based pricing is the method to calculate the price of a product. Cost based pricing utilizes production and manufacturing costs to determine the price of a product. Cost-based pricing is of two types namely full cost pricing and direct cost pricing. Through a full calculation, the company determines the floor and ceiling price (Barringer, 2012). However, the company must price the product between the ceiling and the floor. Value based pricing, on the other hand, is opposed to the manufacturing cost of a product. The value of a service or product is considered in the case of value-based pricing. To calculate the value of a product, the company analyzes the value or money a product would generate in the hands of the consumer when it is marketed. While value-based pricing focuses on customers, cost-based pricing lays its emphasis on the situation of a company to determine its price. 2. An operation plan is a crucial tool for an efficient business plan. It is a written document describing the business, sales, and marketing strategy. An operation plan is used for individual as well as total operating units. It helps to understand the goals of the company and provides direction to the employees and managers both vertically and horizontally. Also, it provides the goals, vision, mission, and directions of an organization. An operation plan describes the structure of a company and also the processes that would be carried out in the future. It addresses operational issues and strengthens team building. Mostly, it is a kind of orienteering map (Ruggieri et al., 2014) Often considered a counterpart of a flowchart, an operation flow diagram shows the relationship between primary components of a system. As the term suggests, an operation flow chart gives a visual presentation of the steps required to form an efficient operation plan. It involves providing information such as functions, steps involved in a process, and events. It means laying down step by step procedures and processes and provides information to the audience (Ruggieri et al., 2014). Flow diagrams provide a clear understanding of a process and facilitate communication and teamwork. Flow charts are used to identify the weaknesses within an organization, highlight them, and work on improving those weaknesses. References Barringer, B. (2012).Entrepreneurship: Successfully Launching New Ventures, (2012). Barringer, B. (2015). Preparing effective business plans (2nd ed.). Boston: Pearson. Cummings, T. G., Worley, C. G. (2014).Organization development and change. Cengage learning. Ruggieri, A., Silvestri, C., Piccarozzi, M. (2014). Consumerism, Market Analysis and Impact on Business Plan Definition.Marketing and Consumer Behavior: Concepts, Methodologies, Tools, and Applications: Concepts, Methodologies, Tools, and Applications, 228.