A marketing plan is vital forÂ your business as you consider how you can best achieve your businessÂ objectives.Â The planning process need not be complexÂ â€“ it is simply a logical approach to looking at your businessÂ and its environment, deciding on your marketing objectives are and thenÂ deciding the marketing programs that need to be created to ensure thatÂ those objectives are met.Â It is better that a marketing planÂ is a rough collection of notes that are used and applied than aÂ pristine and â€˜professionalâ€™ looking document thatÂ is ignored.
Marketing has been given manyÂ different definitions.Â It is sometimes confused with promotionÂ â€“ or even sales.Â It is neither.Â MarketingÂ is concerned with the management of the â€˜marketingÂ mix,â€™ in other words the following: (sometimes referred to asÂ the 4 Ps)
- Price â€“ how much you are selling the product or service for
- Product (or service) â€“ what you are designing, developing, manufacturing, providing and selling
- Place (or channel strategy)
â€“ which channels you are using to sell your product or
services (e.g. are you selling direct to customers over the Internet or
are you selling through a retailer or other third party)
- Promotion â€“ what
methods are you using to communicate what it is that you do to your
market.Â This includes packaging, sales, brochures,
exhibitions, advertising, direct mail, Internet marketing etc
Marketing planning is aÂ creative process that is based on the solid analysis of your businessÂ and its environment.Â It also requires you to think about theÂ future.Â We donâ€™t know what is going to happen in theÂ â€˜invisibleâ€™ future â€“ but there are thingsÂ in the visible future that we can take account of.Â ForÂ example, we know that it will probably be colder in December than it isÂ in June (unless you live in Australia.)Â This is known as theÂ â€˜visibleâ€™ future.
To create a 1 hour marketing plan for your business â€“ follow the steps below:
The Marketing Audit
Before developing a marketingÂ plan, the first step is the marketing audit.Â In its simplestÂ terms this means reviewing the marketing that you have done up untilÂ now to determine how effective it has been â€“ preferably inÂ quantitative terms.Â This information will give you practicalÂ guidance as to where to place your valuable resources in the
The SWOT Analysis
The first step in the marketingÂ audit process is to do a Strengths, Weaknesses, Opportunities andÂ Threats or SWOT analysis. Â The SWOT analysis, beloved ofÂ generations of business school graduates, is an easy to remember andÂ simple process to help you analyze your business.Â There areÂ two main aspects of the SWOT â€“ the inward looking, i.e. whatÂ are the strengths and weaknesses of your business, and the outwardÂ looking, i.e. what are the opportunities and threats coming fromÂ outside your business.
It is useful to create a SWOT matrix in the following format.
Figure 1 : SWOT analysis matrix
I have added a few exampleÂ items to show the type of things that you shouldÂ consider.Â They will vary from business toÂ business.Â As you develop the SWOT analysis, put in anythingÂ that comes to mind â€“ you can always cross it out later.Â The analysis can be done by anÂ individual â€“ but it may be better to gather your teamÂ together in order to get the creative juices flowing.Â A usefulÂ process is called â€˜brainstormingâ€™ â€“ seeÂ the sidebar below.Â This applies to all of the creative andÂ analytical phases of the marketing planning process.
RULES FOR â€˜BRAINSTORMINGâ€™
Figure 2: Rules for brainstorming
Another technique that I have found useful in preparing marketing plans is the ‘PEST’ analysis. PEST is an acronym for:
- Political and Legal
- Economic and demographic
- Social and cultural
and how each of these factorsÂ may affect your business.Â It is another way to help you thinkÂ about the environment in which your business operates.Â It mayÂ be helpful for you to use this analysis when working on theÂ opportunities and threats part of the SWOT analysis.Â ForÂ example, a future legal change may result in you having to pay greaterÂ costs in order to meet new regulations.Â Demographic changesÂ may result in a population shift to your part of theÂ country.Â This may result in more customers and hence,
potentially more business.
Setting marketing objectives
Before planning how to getÂ somewhere it is important to decide where you want toÂ go.Â Before setting marketing objectives you need to know theÂ overall objectives for your business.Â This could be a certainÂ level of profitability or volume of sales.Â To meet thisÂ business objective will involve a number of different activities withinÂ you business including: production, customer service, financeÂ â€“ and marketing.
Marketing objectives are whatÂ you are aiming to achieve through the marketing plan in order to meetÂ he overall business objectives.Â Marketing objectives fallÂ into four categories as summarized by the Ansoff matrix (figure 3):
|MARKET||Present||Market penetration||Product development|
Figure 3: The Ansoff Matrix
The Product Lifecycle
All products have, what isÂ called in â€˜marketing speakâ€™, a productÂ lifecycle.Â This describes the natural process by which a newÂ product is introduced, is gradually accepted, sells well for a whileÂ and is then gradually superseded before, potentially, being phased out.
The following chart gives an indication of how sales will vary as a product goes through the various stages of its lifecycle.
Figure 5: The product lifecycle
The Product Lifecycle
AllÂ products have, what is called in ‘marketing speak’, a product
Figure 5: Sidebar – the product lifecycle
Set marketing strategies
Marketing objectives areÂ concerned with what you would like to achieve, marketing strategies areÂ how you expect these things will be achieved.
Having set the strategies,Â individual marketing tactics will be created in the form of specificÂ marketing programs.Â The difference between the marketingÂ strategy and marketing tactics can be illustrated asÂ follows.Â A valid marketing strategy would be to create anÂ exhibition program in a new market.Â The tactic associated withÂ this strategy would be a specific exhibition, the dates, logistics,Â size of booth and promotional events surrounding the exhibition.
The following are some of your marketing strategy options.Â This list can be expanded to meet your needs:
- Review pricing
- Change payment options
- Offer new discount schemes
- Price sensitivity â€“ supply demand curve
- Psychological pricing (premium pricing)
- Promotional pricing
Product and service differentiation
PerhapsÂ the most important marketing imperative is to differentiate yourÂ business. In other words, what makes (or could make) your businessÂ different from your competitors in a MEANINGFUL way. You need to beÂ specific and carefully think through what makes you truly different.
Differentiation need not come directly from a product or services – itÂ could come from the way you deliver, price or sell a product or
Figure 6: Product and service differentiation
Figure 7: Supply and demand curve
- Create new products
- Offer new services
- Bundle products or services
- Change product positioning
- Find alliance partners
- User new channels to market
- Change delivery options
- Start new advertising campaigns
- Create direct marketing campaign
- Review sales force commission scheme
- Review product positioning (see sidebar below)
- Develop Internet marketing capabilities
- Create new branding for products
Product positioning refers toÂ how you want your product or service to be viewed in theÂ marketplace.Â For example, you could position your product as aÂ luxury brand or a cost-competitive commodity.Â The way that youÂ position a product determines your strategies relating to all of theÂ marketing mix.Â For example, for a luxury brand you would wantÂ to sell through a more exclusive channel, your pricing would be higherÂ and your promotional techniques would emphasize the luxury, quality andÂ premium price of the product.
Product positioning refers to how you want your product or service toÂ be viewed in the marketplace. For example, you could position yourÂ product as a luxury brand or a cost-competitive commodity. The way thatÂ you position a product determines your strategies relating to all ofÂ the marketing mix. For example, for a luxury brand you would want toÂ sell through a more exclusive channel, your pricing would be higher andÂ your promotional techniques would emphasize the luxury, quality andÂ premium price of the product.
Figure 8: Product positioning
SegmentationÂ involves the categorization of customer or potential customers intoÂ economically viable groups based on a group of similarÂ characteristics.Â Consumer markets could be segmented based onÂ geography, demographics (e.g. age, sex, job, educational attainments,Â race and class) and lifestyle.Â Business markets can beÂ segmented based on geography, size of business, urgency, type ofÂ business and buying organization.
Figure 6 : Market segmentation
Develop marketing programs based on marketing strategies
Having developed an overallÂ marketing strategy, it is time to create detailed marketingÂ programs.Â Programs need to be created within your resourcesÂ â€“ both budget and time â€“ and should be mapped outÂ carefully on a calendar (e.g. do you have the resources necessary toÂ attend 2 major trade shows at the same time?).Â The following
are just some of the multitude of factors that need to be considered inÂ creating programs.
When your first think aboutÂ pricing your first inclination may be to apply a simple mechanism whichÂ adds a percentage to the cost of producing the product or providing the
service, this is known as cost-plus pricing.Â This may be theÂ best way of pricing your product â€“ but you must also thinkÂ about premium pricing.Â An expensive product may create an ideaÂ of prestige or luxury â€“ irrespective of how much it cost toÂ create the product.Â Branded perfumes and designer clothingÂ labels fall into this category.
You should also consider theÂ product lifecycle.Â Is you product is in a growth phase whereÂ you are trying to build market share â€“ or is the product inÂ an irreversible decline?Â If you are trying to build marketÂ share, you may decide to be cost competitive.Â If a product isÂ in decline you may wish to sell for a moreÂ â€˜premiumâ€™ price.
Other factors you will likelyÂ taken into account are the cost of competitor products and servicesÂ ogether with the distribution costs that may need to be built intoÂ your pricing (for example, the amount you will need to pay yourÂ distributor).
An area of enormous importanceÂ to be considered when you look at your products is the concept of theÂ product and service portfolio.Â A portfolio implies that youÂ are marketing more than one product or service.Â In actualÂ fact, even if you only have one product â€“ you will likelyÂ have at least one service offering connected to thatÂ product.Â In developing the tactical aspect of your marketingÂ plan your need to analyze each product in turn.Â A good way toÂ do this is by using the Boston Matrix.Â This matrix, originallyÂ developed by the Boston Consulting Group, divides products into theÂ following categories:
- Low relative market share â€“ low market or business growth
- Low relative market share â€“ high market or business growth
- High relative market share â€“ low market or business growth
- High relative market share â€“ high market or business growth
Relative market share isÂ defined as the ratio of company share compared to that of your largestÂ competitor.Â The matrix is designed to show where products areÂ in terms of their need for cash.Â High growth products have aÂ greater need for cash than slow growth products.Â High relativeÂ market share products will contribute more cash when compared with lowÂ relative market share products.
Figure 9 shows a representation of the Boston matrix.
Portfolio management involvesÂ managing the portfolio such that there is a balance between cashÂ generated and cash required.Â It is important to visualizeÂ where products are likely to be in the future and how you can achieveÂ those positions.Â For example, a new, but highly promisingÂ product may begin as a â€˜question markâ€™ (see figureÂ 9).Â In other words, it has a low market share â€“ itÂ is a new product â€“ but a high market growth rate â€“Â it is very promising.Â In order for the product to become aÂ star requires that the relative position needs to improve.Â ToÂ achieve this will require other aspects of the marketing mix to beÂ applied, for example increased promotional activities.Â FigureÂ 7 : Boston Matrix
Place (channel strategy)
The channel strategy is yourÂ plan as to how you are going to get you product or service toÂ market.Â Itâ€™s likely that you have already made someÂ plans here.Â The trick is to find new and innovative ways inÂ which you can gain the widest market coverage at the lowestÂ cost.Â Options include:
- Setting up a distributor network
- Finding â€˜business partnersâ€™
- Selling directly over the Internet
- Creating retail outlets
- Developing export markets
Promotion is a highly creativeÂ process.Â You never really know which promotional method isÂ going to be the most effective until you try it.Â The trick isÂ to try different promotional methods and to test each oneâ€™sÂ effectiveness.
Many different things effect anÂ ultimate buying decision.Â It may seem that the final buyingÂ decision is made because of excellent salesmanship.Â TheÂ complete picture may be slightly different when rigorously taking allÂ the promotional factors into account.
Figure 8 : promotional tip
Marketers have the following methods at their disposal:
- Internet marketing (both â€˜organicâ€™ Web site search engine positioning and Web advertising)
- E-mail marketing
- Advertising (also known as â€˜above the line expenditure.â€™)
- Sales â€“ personal selling
- Trade shows and exhibitions
- Media relations (public relations – PR)
- Direct mail
- Network marketing
As I said in the introduction,Â a marketing plan is not an end in itself, rather, it represents aÂ process of examining and rethinking your business from a marketingÂ perspective.Â By thinking through the issues you should get aÂ greater appreciation of all the different marketing options â€“Â as well as a few new ideas about things to try in your business.
Why not get Billy Fire to help you though this process? Phone 858 668 0874 or e-mail firstname.lastname@example.org.