Developing a marketing plan
Your marketing plan is an essential part of your overall business plan. Bankers and lenders will want to see how you plan on making money. When you start a business or decide to introduce new products or concepts, your marketing plan will help you:
- Assess customer needs and develop a suitable product or service
- Convey product or service features to your target audience (potential customers)
- Establish distribution channels
- Determine the most effective ways to promote yourself
- Pinpoint the best advertising venues
You can buy software to help you write your marketing plan, or use word processing or spreadsheet tools you already own. Some specialized software includes sample plans, marketing scenarios, and auto-calculations.
Before writing your marketing plan
Before you develop your marketing plan, you must first research the potential market for your product or service. Use the market research findings to back up statements in your marketing plan. Learn more about how to conduct your research.
Sections of a marketing plan
Executive summary — "What is my overall plan?"
Your executive summary should contain the key points of your marketing plan and, although it is written last, should be positioned at the front of the plan. This summary is usually the first section a potential investor or lender will read. Polish it to perfection. The executive summary should:
- Include highlights from each section
- Be interesting enough to motivate the reader
- Be concise
Identify yourself — "Who am I and what are my values?"
Describe who you are, what your business is about. Share your goals, and what inspired you to start your business or make changes. For example:
- Company name, address, phone number, and names of owners or partners
- Business vision, mission statement and beliefs (in line with your target market)
- Core values and goals of the business and its owner(s)
Describe the product or service — "What need do I meet?"
Detail how your product or service is unique, and superior to the competition. Be prepared to back up your statements.
Identify your target market — "Who are my customers?"
Through research, identify the age group, gender, lifestyle and other demographic characteristics of the people who have shown interest in your product or service. Avoid trying to sell to everyone. Provide statistics and analysis that show the reader there is a demand for your product or service.
You can define customers by demographic characteristics, such as:
- Age, usually in ranges
- Marital status
- Location of household
- Family size and description
- Education level, usually to last level completed
- Interests, purchasing profile
- Cultural or ethnic background
For example, a clothing manufacturer may consider a number of possible target markets — toddlers, athletes, grandparents, teenagers and tourists. A test market survey of the most likely target groups, or those who buy for them, such as parents for toddlers, can help you separate real target markets from unlikely possibilities.
Once you have defined your target customers, you must learn about their needs and preferences.
- Which of their challenges can you solve?
- 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?
To develop a profile of your customers and to understand their needs, you will have to do some market research.
Know your competitor — "Who else can woo my customers?"
Most businesses face competition at every stage of their life cycle. Competition can be good; the trick is to know with whom you are competing, and what it is that you do better. You can compare your own strengths, weaknesses, opportunities and threats (sometimes called a “SWOT analysis”) to those of your competitors, and make sure your customers know why you should be their preferred choice.
Define your distribution and delivery channels — "How will I deliver my product to my customers?"
Traditionally, customers shop at stores to find the products they want, or visit one specific location for services such as a massage or a haircut. More and more, people are shopping online. Where will customers find your products? Define your delivery channels, including who the middle players are, and how much that process will cost. For example, you could decide to:
- Sell through a retailer, wholesaler, or professional sales agent
- Sell through kiosks in schools, offices, public places, or at events
- Go to the customer's home or place of business
- Take orders from a catalogue or through the Web
- Sell solely online
Group your activities — "How will I reach my customers?
Map out your budget for each medium you want to use, and detail how much time you plan to spend on each. A few suggestions:
- Advertising (online ads, 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 (mailouts, samples, freebies, discount coupons, sales, displays)
- Internal marketing (employee rebates, sales incentives, referral incentives)
Outline a plan to deal with challenges — "How will I handle the unexpected?"
Like any aspect of running a business, preparation helps you face challenges and sometimes prevent them. Think about potential challenges, and write down what you could do to prevent them or deal with them when they happen.
The following are some marketing challenges for which you could plan:
- New regulations for packaging/labelling/claims
- Shift in trends and buyer preferences
- Environmental issues related to your business
- Negative business image or perceptions
- Changes in the economy
- New competition
Indicate your pricing strategy — "How much should I charge?"
Pricing is another aspect of marketing that requires careful attention. If your price is too high, you may alienate customers; if it's too low, you may give the impression that your product or service is cheap and 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.
Project where you will be in five years — "What are my long-term goals?"
If you start out small and want to remain small, be clear about this in your plan. If your long term goal is to expand over the years, to gain an international market, or to sell franchising rights, be clear about this as well. Define the steps you plan to take in order to grow your business and how you will adjust your marketing activities to reach these goals.
Provide a review date — "When will I revisit my plan?"
Remember that styles, markets, and goals change, and therefore so should your plan. You will likely want to update it at least once a year, or more often as needed.