Why develop a marketing plan?
Your marketing plan is an essential part of your overall business. When you are starting a business or introducing new products or concepts, this plan can help you:
- Assess the needs of your customers and develop a product or service to meet these needs
- Communicate the attributes of the product or service to the customer
- Establish distribution channels to get the products/services to the customer
Developing your marketing plan will help you identify aspects of marketing that are easy to overlook. To produce a sound plan you will need to outline who your customers are, how they will buy your product or hire your services and why. Your banker or lender will also want to see the marketing section of your business plan before considering lending you money.
Styles, markets and goals change and so should your plan. Revisit your marketing plan on a regular basis to keep it current and adjust it according to changes in your business activities or predictions of new trends.
Before writing your marketing plan
Before you develop your marketing plan, research the potential market for your product or service. Use the numbers, facts and findings to back up statements in your marketing plan. You can also design a questionnaire, create an online survey and search available databases and other resources to find the information you need to build your marketing plan.
Sections of a marketing plan
Executive summary - what is my overall plan?
The executive summary is an overview of the key points contained in your marketing plan and, even though it is written last, it should be positioned at the beginning of the plan. This summary is usually the first section that a potential investor or lender will read and you may want to give it extra attention. The executive summary should:
- Include the key points from each of the other sections to explain the basics of your marketing plan
- Be interesting enough to motivate the reader to continue reading the rest of your marketing plan
- Be brief and concise
If you have not already done so in your overall business plan, you will want to clearly describe who you are, what your business is about, what your business goals are and what inspired you to start, buy or grow the business. For example:
- Include the company name, address, phone number, and names of owners/partners
- Indicate the business' vision and mission statement (this should align with your target market)
- Indicate the core values and goals of the business and its owner(s)
Describe the product or service
Detail how your product or service is unique or why it is superior to other models on the market. If the product or service is not unique, maybe the location is ideal or a large market allows room for competition. It is important to use facts and numbers to show how your business will be profitable.
Identify your target market – who are your customers?
Before you sell something, you need to know who you are selling to. If you do not determine who your target market is, you might try to satisfy too many different customer needs and end up with a product nobody likes or a service that no one needs.
By conducting research, you can identify the age group, gender, lifestyle and other demographic characteristics of the people who have shown interest in your product or service. It is important to provide statistics, analysis, numbers and supporting facts that can show the reader there is a demand for your product or service.
When developing a general profile of your customers, you might want to define them by:
- age, usually given in a range (20-35 years)
- marital status
- location of household
- family size and description
- income, especially disposable income (money available to spend)
- education level, usually to last level completed
- interests, purchasing profile (what do your customers want?)
- cultural background
For example, a clothing manufacturer may consider a number of possible target markets: toddlers, athletes or teenagers. By compiling a general profile of each of your possible markets, you can decide which ones are the most realistic, pose the least risk or are more likely to show a profit. A test market survey of the most likely target groups can also help you separate real target markets from the more unlikely possibilities.
Once you have defined your target customers, you will want to learn about their needs and preferences. A few of the many things you might want to learn about your prospective customers include:
- What challenges do they have that could be solved with your product or service?
- What are their needs and expectations regarding this product or service?
- What types of things do they desire?
- What do they spend their money on?
- Where do they shop?
- How do they make spending decisions?
Remember, if you want to develop a profile of your customers and understand their needs, you will have to do some market research.
Know your competitors
Most businesses compete with others. But, even if you are the only player, before long you will most likely have competition. It is important to know who you are competing with and what their competencies are. You will want to compare your own Strengths, Weaknesses, Opportunities, and Threats (SWOT) with those of your competition. Once you know what your business does better than anyone else, make sure your customers know about it.
How will I deliver my product to my customers?
Traditionally, customers shop at stores to find the products they want. Similarly, we often assume that we need to go out to a specific location for services like a massage or a haircut. However, there is nothing that dictates how you should serve your customers. For example, you could decide to:
- Sell through a retailer, wholesaler or professional sales agent
- Sell through kiosks in schools, offices, public places or events
- Go to the customer's home or place of business
- Take orders from a catalogue or online with a website
Group your marketing activities
Create a table or chart that provides an estimate of how much of your total marketing budget you plan to spend on each media type. In another table or chart, detail how much of your time you plan on spending on each. You can also break down each group by specific media. Some suggestions are:
- Advertising (TV, radio, print publications, online publications, websites, billboards, business cards)
- Publicity (signs, stationery, branding, testimonials, referrals)
- Listings (business directories, telephone directories, online listings, association listings)
- Sponsoring (research, community events, local charities, sports)
- Networking (get feedback from existing and potential customers and other industry players; reach out to the public through online social networks; provide advice on blogs and by speaking at public events; meet industry players at business events)
- Promotions (mail outs, samples, freebies, discount coupons, sales, displays)
- Internal marketing (employee rebates, sales incentives, referral incentives)
Plan for problems
Like any aspect of running a business, preparation helps you deal with challenges. No matter how meticulously you have planned your marketing strategy, something unexpected can come your way. What you can do is consider some possible "surprises" that might happen and write down how you would handle them.
The following are some marketing challenges that you could plan for:
- Regulations for new packaging/labelling/claims
- Shift in trends and buyer preferences
- Environmental issues related to your business
- Negative business image or perceptions
- Changes to the economy
- New competition
- Marketing regulations and standards
- Marketing during a recession
Indicate your price or pricing strategy - how much should I charge?
Determining the right price is another aspect of marketing. If your price is too high, you may alienate customers, and if it is too low, you may give the impression that your product or service is cheap or below standard. Some businesses purposely charge a very high price so that their customers feel that they are getting a better product or service. Some sell at a slightly higher than average price in order to be able to offer exceptional customer service.
Projections and long-term goals
If you want your business to start small and remain small, be clear about this in your plan. If the long term goal is to expand over the years, gain an international market or sell franchising rights, you will want to include that in your plan. Detail the steps you plan to take to grow your business and how you will adjust your marketing activities to reach these goals.
Provide a review date
This step will be a reminder to establish how often you review your marketing plan. You may wish to update you plan only when there is a change in your business. But, it will help keep you plan current if you make a commitment to review it at least once a year.