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This sample marketing plan has been made available to users of Marketing Plan Pro, marketing planning software published by Palo Alto Software. Our sample plans were developed by existing companies or new business start-ups as research instruments to determine target market viability, explore marketing strategies, or prepare funding proposals. Names, locations and numbers may have been changed, and substantial portions of text may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to reproduce, publish, distribute or even copy this plan as it exists here. Requests for reprints, academic use, and other dissemination of this sample plan should be emailed to marketing@paloalto.com, the marketing department of Palo Alto Software. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526.
Confidentiality Agreement
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Table Of Contents
1.0 2.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Situation Analysis . . . . . . . . . . . 2.1 Market Summary . . . . . . . 2.1.1 Market Demographics 2.1.2 Market Needs . . . 2.1.3 Market Trends . . . 2.1.4 Market Growth . . . 2.2 SWOT Analysis . . . . . . . . 2.2.1 Strengths . . . . . 2.2.2 Weaknesses . . . . 2.2.3 Opportunities . . . . 2.2.4 Threats . . . . . . 2.3 Competition . . . . . . . . . 2.4 Services . . . . . . . . . . . 2.5 Keys to Success . . . . . . . 2.6 Critical Issues . . . . . . . . . 2.7 Macroenvironment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .1 .2 .3 .3 .5 .5 .6 .6 .6 .7 .8 .8 .8 .9 .9
3.0
Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 3.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.2 Marketing Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.3 Financial Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.4 Target Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 3.5 Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.6 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 3.7 Marketing Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.7.1 Services and Service Marketing . . . . . . . . . . . . . . . 12 3.7.2 Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.7.3 Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . 12 3.7.4 Service . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 3.8 Marketing Research . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Financials, Budgets, and Forecasts . . . . . 4.1 Break-even Analysis . . . . . . . . . 4.2 Sales Forecast . . . . . . . . . . . . 4.3 Expense Forecast . . . . . . . . . . 4.4 Linking Sales and Expenses to Strategy 4.5 Contribution Margin . . . . . . . . . Controls 5.1 5.2 5.3 . . . . . . . . . . . . . Implementation Milestones Marketing Organization . Contingency Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 . 14 . 15 . 17 . 19 . 20 . 21 . 22 . 23 . 23
4.0
5.0
Our target markets include: Students from nearby housing centers. Business people from the downtown business centers and professional buildings. Seniors from nearby retirement facilities.
Target Market Growth: University students continue to grow at a steady pace, at nearly 4% This sample plan produced in Marketing Plan Pro software. www.paloalto.com 1-800-229-7526 Page 1
Target Markets
Table 2.1: Target Market Forecast Target Market Forecast Potential Customers University Students Office Workers Seniors Teenagers Other Total
Growth 4% 3% 6% 2% 0% 3.50%
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Table 2.1.1: Target Market Analysis Target Market Analysis Market Segments University Students Office Workers Seniors Teenagers Other
Avrg. Age 20 33 65 18 -
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Market Forecast
45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 2000 2001 2002 2003 2004
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4.
2.2.2 Weaknesses
1. A dependence on quickly changing technology. JavaNet is a place for people to experience the technology of the Internet. The technology that is the Internet changes rapidly. Product lifecycles are measured in weeks, not months. JavaNet needs to keep up with the technology because a lot of the JavaNet experience is technology. Cost factor associated with keeping state-of-the-art hardware. Keeping up with the technology of the Internet is an expensive undertaking. JavaNet needs to balance technology needs with the other needs of the business. One aspect of the business can't be sacrificed for the other.
2.
2.2.3 Opportunities
1. 2. Growing population of daily Internet users. The importance of the Internet almost equals that of the telephone. As the population of daily Internet users increases, so will the need for the services JavaNet offers. Social bonds fostered by the new Internet communities. The Internet is bringing people from across the world together unlike any other communication medium. JavaNet will capitalize on this social trend by providing a place for smaller and local Internet communities to meet in person. JavaNet will grow some of these communities on its own by establishing chat areas and community programs. These programs will be designed to build customer loyalty.
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2.
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2.4 Services
JavaNet will provide its customers with full access to the Internet and common computer programs and equipment. Some of the Internet and computing services available to JavaNet customers are listed below: Access to external POP3 email accounts. Customers can sign up for a JavaNet email account. This account will be managed by JavaNet servers and accessible from computer systems outside the JavaNet network. FTP, Telnet, Gopher, and other popular Internet utilities will be available. Access to Netscape or Internet Explorer browsers. Access to laser and color printing. Access to popular software applications, like Adobe Photoshop and Microsoft Word. JavaNet will also provide its customers with access to introductory Internet and email classes. These classes will be held in the afternoon and late in the evening. By providing these classes, JavaNet will build a client base familiar with its services. The computers, Internet access, and classes wouldn't mean half as much if taken out of the environment JavaNet will provide. Good coffee, specialty drinks, bakery goods, and a comfortable environment will provide JavaNet customers with a home away from home; a place to enjoy the benefits of computing in a comfortable and well kept environment.
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2.7 Macroenvironment
The retail coffee industry in this area experienced rapid growth at the beginning of the decade and is now moving into the mature stage of its life cycle. Many factors contribute to the large demand for good coffee: The student population at the University is a main source of demand for coffee retailers, the cold and damp climate is extremely conducive to coffee consumption, and current trends in the Northwest reflect the popularity of quality coffee and specialty drinks. The popularity of the Internet is growing exponentially. Those who are familiar with the information superhighway are well aware of how fun and addicting surfing the Internet can be. Those who have not yet experienced the Internet need a convenient, relaxed atmosphere where they can feel comfortable learning about and utilizing the current technologies. JavaNet seeks to provide its customers with affordable Internet access in an innovative and supportive environment.
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3.5 Positioning
JavaNet will position itself as an upscale coffee house and Internet service provider. Business people of all types will use JavaNet as a place to hold meetings and catch-up on email communications. Students from nearby downtown housing centers will use JavaNet as a place to socialize and discuss the latest Internet sites. Seniors from downtown retirement centers will experience the Internet for the first time at JavaNet. Programs designed to teach newcomers about the power of the Internet will help build customer loyalty and spread the word about the services JavaNet offers.
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3.7.2 Pricing
JavaNet bases its prices for coffee and specialty drinks on the "Retail Profit Analysis" provided by our supplier, Allann Brothers Coffee Co., Inc. Allann Brothers has been in the coffee business for 22 years and has developed a solid pricing strategy. Determining a fair market, hourly price for online use is more difficult because there is no direct competition from another cyber-cafe in our area. Therefore, JavaNet considered three sources to determine the hourly charge rate. First, we considered the cost to use other Internet servers, whether it is a local networking firm or a provider such as America Online. Internet access providers use different pricing schemes. Some charge a monthly fee, while others charge an hourly fee. In addition, some providers use a strategy with a combination of both pricing schemes. Thus, it can quickly become a high monthly cost for the individual. Second, JavaNet looked at how cybercafes in other markets such as Portland and Ashland went about pricing Internet access. Third, JavaNet used the market survey conducted in the Fall of 1998. Evaluating these three factors resulted in JavaNet's hourly price of $2.50.
3.7.3 Promotion
JavaNet will spend almost fifty thousand dollars in its first year of operations to build a brand and a loyal customer base. Marketing efforts will be focused on the local market, and the campaign will run the entirety of 1999, increasing roughly 10% per year to match increased sales revenue. The marketing budget will consistently equal almost 20% of sales. A Few Specific Marketing Efforts: Local TV spots Print Materials Local Newspapers Local Radio Spots JavaNet Events
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5.
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Break-even Analysis
$8,000 $6,000 $4,000 $2,000 $0 ($2,000) ($4,000) ($6,000) ($8,000) 0 996 1992 2988 3984 4980
Table 4.1: Break-even Analysis Break-even Analysis: Monthly Units Break-even Monthly Sales Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost
2,986 $10,002
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$50,000 $40,000
Specialty Drinks (based on average) E-mail Memberships Hourly Internet Fees Baked Goods (based on average) Other
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Table 4.2: Sales Forecast Sales Forecast Unit Sales Coffee (based on average) Specialty Drinks (based on average) E-mail Memberships Hourly Internet Fees Baked Goods (based on average) Other Total Unit Sales Unit Prices Coffee (based on average) Specialty Drinks (based on average) E-mail Memberships Hourly Internet Fees Baked Goods (based on average) Other Sales Coffee (based on average) Specialty Drinks (based on average) E-mail Memberships Hourly Internet Fees Baked Goods (based on average) Other Total Sales Direct Unit Costs Coffee (based on average) Specialty Drinks (based on average) E-mail Memberships Hourly Internet Fees Baked Goods (based on average) Other Direct Cost of Sales Coffee (based on average) Specialty Drinks (based on average) E-mail Memberships Hourly Internet Fees Baked Goods (based on average) Other Subtotal Cost of Sales
2000 16,230 9,129 12,173 60,255 54,777 0 152,564 2000 $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 2000 $16,230 $18,259 $121,726 $150,636 $68,471 $0 $375,323 2000 $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 2000 $4,058 $4,565 $30,432 $37,960 $16,981 $0 $93,995
2001 17,853 10,042 13,390 66,280 60,255 0 167,820 2001 $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 2001 $17,853 $20,085 $133,899 $165,700 $75,318 $0 $412,855 2001 $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 2001 $4,463 $5,021 $33,475 $41,756 $18,679 $0 $103,395
2002 19,639 11,047 14,729 72,908 66,280 0 184,602 2002 $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 2002 $19,639 $22,093 $147,289 $182,270 $82,850 $0 $454,141 2002 $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 2002 $4,910 $5,523 $36,822 $45,932 $20,547 $0 $113,734
2003 21,602 12,151 16,202 80,199 72,908 0 203,062 2003 $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 2003 $21,602 $24,303 $162,018 $200,497 $91,135 $0 $499,555 2003 $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 2003 $5,401 $6,076 $40,504 $50,525 $22,601 $0 $125,107
2004 23,763 13,366 17,822 88,219 80,199 0 223,368 2004 $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 2004 $23,763 $26,733 $178,219 $220,547 $100,248 $0 $549,510 2004 $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 2004 $5,941 $6,683 $44,555 $55,578 $24,862 $0 $137,618
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Local TV Spots Print Materials Local Newspapers Local Radio Spots JavaNet Events Customer Happiness Representative Other
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Table 4.3: Marketing Expense Budget Marketing Expense Budget Local TV Spots Print Materials Local Newspapers Local Radio Spots JavaNet Events Customer Happiness Representative Other Total Sales and Marketing Expenses Percent of Sales Contribution Margin Contribution Margin / Sales 2000 $23,000 $6,750 $3,300 $12,000 $9,000 $28,500 $1,500 -----------$84,050 22.39% $194,278 51.76% 2001 $25,300 $7,425 $3,630 $13,200 $9,900 $31,350 $1,650 -----------$92,455 22.39% $214,006 51.84% 2002 $27,830 $8,168 $3,993 $14,520 $10,890 $34,485 $1,815 -----------$101,701 22.39% $235,706 51.90% 2003 $30,613 $8,984 $4,392 $15,972 $11,979 $37,934 $1,997 -----------$111,871 22.39% $259,577 51.96% 2004 $33,674 $9,883 $4,832 $17,569 $13,177 $41,727 $2,196 -----------$123,058 22.39% $285,834 52.02%
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Sales Expenses
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$20,000
$15,000
$10,000
$5,000
$0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Table 4.5: Contribution Margin Contribution Margin Sales Direct Cost of Sales Other Variable Costs of Sales Total Cost of Sales Gross Margin Gross Margin % Marketing Expense Budget Local TV Spots Print Materials Local Newspapers Local Radio Spots JavaNet Events Customer Happiness Representative Other Total Sales and Marketing Expenses Percent of Sales Contribution Margin Contribution Margin / Sales 2000 $375,323 $93,995 $3,000 -----------$96,995 $278,328 74.16% 2000 $23,000 $6,750 $3,300 $12,000 $9,000 $28,500 $1,500 -----------$84,050 22.39% $194,278 51.76% 2001 $412,855 $103,395 $3,000 -----------$106,395 $306,461 74.23% 2001 $25,300 $7,425 $3,630 $13,200 $9,900 $31,350 $1,650 -----------$92,455 22.39% $214,006 51.84% 2002 $454,141 $113,734 $3,000 -----------$116,734 $337,407 74.30% 2002 $27,830 $8,168 $3,993 $14,520 $10,890 $34,485 $1,815 -----------$101,701 22.39% $235,706 51.90% 2003 $499,555 $125,107 $3,000 -----------$128,107 $371,447 74.36% 2003 $30,613 $8,984 $4,392 $15,972 $11,979 $37,934 $1,997 -----------$111,871 22.39% $259,577 51.96% 2004 $549,510 $137,618 $3,000 -----------$140,618 $408,892 74.41% 2004 $33,674 $9,883 $4,832 $17,569 $13,177 $41,727 $2,196 -----------$123,058 22.39% $285,834 52.02%
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Milestones
TV Ad Creative Radio Spot 1 Creative Radio Spot 2 Creative JavaNet Event 1 Creative JavaNet Event 2 Creative Newspaper Ad Creative Customer Happiness Representative Prog. 1 Introduction to the Internet Class 1 Customer Survey Other Jan Feb Mar Apr
Table 5.1: Milestones Milestones Milestone TV Ad Creative Radio Spot 1 Creative Radio Spot 2 Creative JavaNet Event 1 Creative JavaNet Event 2 Creative Newspaper Ad Creative Customer Happiness Representative Prog. 1 Introduction to the Internet Class 1 Customer Survey Other Totals Plan Start Date 1/15/99 1/15/99 2/1/99 2/1/99 4/1/99 1/1/99 1/15/99 1/15/99 3/1/99 3/1/99 End Date 2/1/99 2/1/99 2/10/99 2/10/99 4/10/99 1/5/99 2/1/99 1/16/99 4/1/99 4/1/99 Budget $500 $250 $250 $250 $300 $75 $500 $250 $1,000 $0 $3,375 Manager ABC ABC ABC ABC ABC ABC ABC ABC ABC ABC Department Department Department Department Department Department Department Department Department Department Department
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Jan 800 450 600 2,970 2,700 0 7,520 Jan $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Jan $800 $900 $6,000 $7,425 $3,375 $0 $18,500 Jan $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Jan $200 $225 $1,500 $1,871 $837 $0 $4,633
Feb 840 473 630 3,119 2,835 0 7,896 Feb $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Feb $840 $945 $6,300 $7,796 $3,544 $0 $19,425 Feb $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Feb $210 $236 $1,575 $1,965 $879 $0 $4,865
Mar 882 496 662 3,274 2,977 0 8,291 Mar $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Mar $882 $992 $6,615 $8,186 $3,721 $0 $20,396 Mar $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Mar $221 $248 $1,654 $2,063 $923 $0 $5,108
Apr 988 556 741 3,667 3,334 0 9,286 Apr $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Apr $988 $1,111 $7,409 $9,168 $4,167 $0 $22,844 Apr $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Apr $247 $278 $1,852 $2,310 $1,034 $0 $5,721
May 1,106 622 830 4,107 3,734 0 10,400 May $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 May $1,106 $1,245 $8,298 $10,269 $4,668 $0 $25,585 May $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 May $277 $311 $2,074 $2,588 $1,158 $0 $6,407
Jun 1,250 703 938 4,641 4,219 0 11,752 Jun $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Jun $1,250 $1,406 $9,377 $11,604 $5,274 $0 $28,911 Jun $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Jun $313 $352 $2,344 $2,924 $1,308 $0 $7,240
Jul 1,413 795 1,060 5,245 4,768 0 13,280 Jul $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Jul $1,413 $1,589 $10,596 $13,112 $5,960 $0 $32,670 Jul $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Jul $353 $397 $2,649 $3,304 $1,478 $0 $8,182
Aug 1,526 858 1,144 5,664 5,149 0 14,342 Aug $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Aug $1,526 $1,716 $11,443 $14,161 $6,437 $0 $35,283 Aug $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Aug $381 $429 $2,861 $3,569 $1,596 $0 $8,836
Sep 1,648 927 1,236 6,118 5,561 0 15,489 Sep $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Sep $1,648 $1,854 $12,359 $15,294 $6,952 $0 $38,106 Sep $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Sep $412 $463 $3,090 $3,854 $1,724 $0 $9,543
Oct 1,780 1,001 1,335 6,607 6,006 0 16,729 Oct $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Oct $1,780 $2,002 $13,347 $16,517 $7,508 $0 $41,154 Oct $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Oct $445 $501 $3,337 $4,162 $1,862 $0 $10,307
Nov 1,922 1,081 1,442 7,135 6,487 0 18,067 Nov $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Nov $1,922 $2,162 $14,415 $17,839 $8,108 $0 $44,447 Nov $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Nov $481 $541 $3,604 $4,495 $2,011 $0 $11,131
Dec 2,076 1,168 1,557 7,706 7,006 0 19,512 Dec $1.00 $2.00 $10.00 $2.50 $1.25 $0.00 Dec $2,076 $2,335 $15,568 $19,266 $8,757 $0 $48,002 Dec $0.25 $0.50 $2.50 $0.63 $0.31 $0.00 Dec $519 $584 $3,892 $4,855 $2,172 $0 $12,022
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