A marketing plan may not be at the top of every new business owner’s to-do list, but it should be. While a business plan helps map the direction for your company, a marketing plan helps your company understand how to get there by detailing important steps on the road to creating customer relationships.
“The single most important thing for a small business to include in its marketing plan is a very clear understanding of its customers and its competitors,” said Robert Thomas, professor of marketing at the McDonough School of Business at Georgetown University.
Though a marketing plan can be formal or informal, at a minimum it describes who your customers are, where they get information, and how you are going to reach them. Thomas said the development of a marketing plan requires four specific tasks:
Develop a very clear and focused insight into why a potential customer would use your business. More specifically, what is the core need that your product or service will meet? Is it to help your customers get through the day more easily? Do their job more efficiently? Be respected and admired by friends? Your offering should be designed to meet customer needs better than the competition.
Identify your target customers. There are numerous potential customers in most markets, but to succeed faster and better, a small business must study the market to determine the characteristics of its best target customers. The target customer should be described in detail. In doing so, a business also develops a clearer picture of the expected sales revenues and financials.
Identify competitors that would also want your target customers. There is always a competitor — never make the mistake of assuming there isn’t. Small businesses seldom take the time to study their competitors in depth. But you must understand who your competitors are, what their core competitive advantage is and how they will respond to your offering (price cuts, increased communication, etc.).
Write down your brand-positioning statement for your target customers. Ultimately, your brand and what it symbolizes for customers will be your strongest competitive advantage. You should be able to write down a simple declarative sentence of how you will meet customer needs and beat the competition. The best positioning statements are those that are single-minded and focus on target customer needs.
The Marketing Plan: everyone will tell you that you absolutely have to have one. Few of the people who say that, however, are able to tell you what exactly a marketing plan consists of. Creating a marketing plan for your small business shouldn’t take you a few hours. Ideally, it should take you at least a few days to do the research and have the necessary discussions — potentially even a few weeks depending on factors like the size of your market and the uniqueness of your product line(s). The following article may help you in developing your marketing plans.
The Executive Summary. A high-level summary of the marketing plan as a whole, and a paradox on paper: this is the last section that you should write, but the first section that should be in the finished report. It’s best to keep the Executive Summary as short and sweet as possible — just a couple of sentences to sum everything up. While writing it, imagine that you’re going to present this summary “elevator pitch” style. Once you’ve finished it, read it out loud. If it takes you longer than ten seconds to read it all, it probably needs to be simplified even further.
The Challenge. This section should contain a brief description of the product(s) and/or product line(s) that your company offers. With each description, include goals that you want to set for each product and product line (sales figures, strategic and company-wide goals, etc.). Keep the number and complexity of your goals at a maximum of three per product/product line, and remember that they need to be concise, measurable, and moderately easy to achieve.
Situation Analysis. This section contains a snapshot of your company, your customer base, and your market at large. It should be divided into six subsections:
- 1. Company Analysis:
- Long and Short-Term Company-wide goals.
- The focus of your company (should fall directly in line with your mission and vision statements).
- Analysis of the culture of your company (is your company a fast-paced shark tank, or a laid-back ping-pong table environment?).
- Strengths of your company.
- Weaknesses of your company.
- Your company’s estimated market share.
- 2. Customer Analysis:
- Estimate size of your customer base (i.e. how many people could potentially purchase any of your products. “Anyone” is not an answer).
- Key Demographics of your customer base (age, social class, gender).
- Value drivers (what about your products and/or services provides true value to your customer base?).
- 3. Competitor Analysis:
- Market Position (are your competitors fully invested in the market, or do they only play in specific segments? Are they big or small?).
- Market shares.
- 4. Collaborators: – People and companies that are key to continuing what you do.
- Subsidiaries, joint ventures, distributors, suppliers, etc.
- 5. Climate: — “PEST” Analysis.
- Political and legal environment (are there any specific regulations or laws governing your products?).
- Economic environment.
- Social and cultural environment.
- Technological environment (are cutting-edge techs integral to your products? are there any projected updates?).
- 6. SWOT Analysis:
- Your company’s internal strengths (what does your unique structure and/or unique employee team help you be the best at?).
- Your company’s internal weaknesses (in what areas do your unique structure and/or unique employee team hold you back?).
- External opportunities for your company (what’s out there that you could easily take advantage of for your betterment?).
- External threats to your company (what’s out there that can potentially destroy your business if you’re not careful?).
- 1. Company Analysis:
- Each market has its own different segments. Understanding the relevant segments for your product(s) in your market is important, for they allow you to adjust your “marketing mix” (the “Four P’s” discussed lower) to better adapt to the different needs of each segment.
- Segments should be measurable, accessible, different from other segments in response to a marketing mix, durable (not constantly changing), substantially large enough to produce a profit, and homogeneous.
- Inside your marketing plan, listing your segments should follow a clear and predictable form, like the one listed below:
- Name of the Segment:
- Percent of your overall sales this segment accounts for.
- What, exactly, this segment wants and needs.
- How this segment uses your product.
- What sort of support this segment needs.
- The best ways to advertise to and communicate with this segment.
- The price sensitivity of this segment (are they largely price elastic or price inelastic?).
- Repeat this until you feel that you have identified all of your major segments.
Alternative Marketing Strategies: Write down details about any alternatives that you and your team considered before arriving at your current strategy. These may include eliminating a particular product or line, changing the price point of a product or line, etc.
Selected Marketing Strategy: Explain the strategy that you and your team have developed and agreed upon. Why did you choose this strategy? Why do you feel that it’s the best possible strategy for the near future? Once that’s on paper, put your “Four P’s” down for each product. Each product should have its own “Four P’s” – you can follow the format below:
- Branding/Brand Name.
- Intended quality of the product (is it a $1 plastic toy firetruck, or a $30 metal one with real flashing lights and a siren?).
- Scope of the product line.
- List price.
- Payment terms.
- Leasing options (if applicable).
- Place (Distribution)
- Distribution channels (do you sell this product yourself, ship it to retailers or warehouses, etc).
- Channel Motivations (what sort of margins should your distributors expect, if applicable?).
- Criteria for evaluating your distributors.
- Logistics and Supply Chain.
- Advertising (what types? how much of each type? what type of advertising channels — TV, print, internet, etc. – do you plan to use?).
- Public Relations.
- Promotional programs.
- Budget, including your break-even point.
- Projected results of this promotional program (impact to customer loyalty, new customer acquisition, etc.).
Short and Long-Term Projections. This section should include forecasts of revenues and expenses, your break-even analysis, and any changes or adjustments that you predict you’ll need to make in the future.
The Conclusion This is an expanded version of your Executive Summary.You should include all specific numbers (projected costs, revenues, profits, etc.).
While these steps are a good starting point, companies also need to incorporate multiple channels into their marketing plans. Some of the most popular channels for today’s businesses include:
Social media has become an essential part of businesses’ marketing plans. Businesses that have yet to realize the opportunities that Facebook, Twitter, Google+, LinkedIn and other networks provide them are missing out. Even though the concept of social media marketing may overwhelm certain small business owners, the process does not need to be a challenge, as more services and companies are popping up more and more frequently.
Brett Farmiloe, founder of Internet marketing companyMarkitors, advised companies that are just getting started in social media to get to know their customers.
“Figure out where your customers are spending their time and set up shop on those platforms,” Farmiloe told Business News Daily. “Develop a content strategy that can be executed internally, [and then] execute your strategy by posting branded content on your selected platforms. While all three steps are key, the biggest one is really determining if your customers are on these platforms.”
Though email marketing may not be as new of a concept as social media marketing, it is an effective and popular choice for many small business owners. Companies can implement email-marketing techniques in a number of ways, including newsletters, promotional campaigns and transactional emails. Companies such asMailChimp and Constant Contact make it easy for companies to manage their email campaigns.
Farmiloe noted that companies can set their email marketing efforts apart by segmenting their market.
“Not all subscribers want to receive the same blast,” Farmiloe said. “Smart email marketers take the time to segment subscribers at the outset, and then continue to segment based on subscriber activity. Through segmentation, companies reduce the amount of unsubscribes, increase open rates, and most importantly, increase the amount of actions taken from an email send.” [For a side-by-side comparison of the best email marketing services, visit our sister site Top Ten Reviews]
The popularity of smartphones and tablets has helped to change the way companies target their customers. As a result, companies are looking to implement strategies that reach customers on their devices.
Mobile marketing should not be considered a mere extension of email or online marketing, however. Since many consumers have a mobile device with them at all times, texts and push notifications will almost certainly be seen by the recipient.
“Mobile marketing is interruptive,” Farmiloe said. “It’s because of this power that a marketer has to let the consumer determine how and when to receive marketing material. That’s why almost every app comes with the option to turn notifications on or off. The consumer has to hold the power with mobile marketing.”
To optimize your mobile marketing presence, carefully consider how and when you reach your mobile customers. Be sensitive to when and why they use their phones, and offer them information that is pertinent to their situation.
Once strategies have been identified for each channel, you need to figure out your strategy. How much are you willing to spend in each channel? What outcomes do you expect to see? What tasks do you need to accomplish for each step in your process? Creating a well-defined list of budgets, goals and action items, with appropriate personnel assigned to each, can help make your marketing plan a reality.
It is also important to decide in advance how you will measure success. Are you hoping to see increased sales or traffic, or new client contacts? Set six-month milestones for each channel, and compare the results against prior efforts and your expectations. If a channel is underperforming, examine the consequences for both abandoning it and for adding more resources. If your efforts have fallen flat as the result of a failure to understand the medium’s audience, go back to basics. Asking your customers to complete an email survey about their social media habits in exchange for a coupon or discount may help you learn surprising relationships between customer demographics and your marketing efforts.
Strategic Marketing Plans
Strategic marketing planning involves combining customer experiences with the overall direction the company wants and needs to take in order to succeed. For example, market segmentation plays a vital role in strategic marketing. Geographic and demographic differences in a company’s target markets can affect the purchasing habits of consumers. Strategic marketing planning allows companies to go through the process of identifying what these differences are, and then adjusting marketing messages and presentation of the company and the products and services of the business to meet the individual needs of the different segments of the market.
For example, the Baby Boomers generation has created a surge in need for products and services that range drastically. Some companies have adjusted existing products and services to meet the increase in demand, while other companies with the foresight to strategically plan for the increase, developed new products and services to meet the demand.
Once a strategic marketing plan is in place, the company can use the plan as a guide in conducting its daily business as well as making short-term and long-term decisions. Implementation of the strategic marketing plan typically leads companies to the tactical marketing portion of conducting business. The strategic marketing plan transitions into the company’s plan for product and service development; the communication plan on how the company intends on promoting the business offerings; developing the sales plan; and finally putting together the customer service plan on how the company intends on interacting with current and potential customers.
Strategic marketing planning is not a one-time action, but rather an ongoing process. Typically, a company creates a strategic marketing plan that covers short-term (one year) and long-term (two year, three year and five year plans) periods. When a strategic marketing plan is put in place, the company uses it as a guide for six months to one year at a time. The company then evaluates the strategic plan by measuring the results of the marketing programs the plan put in place. After evaluating the strategic marketing plan on a six-month or one-year basis, the company may tweak the plan to improve efforts that didn’t go as planned or to mimic the results of plans that achieved success.
Effective strategic marketing planning requires companies to conduct a great deal of research and to really get to know its target market. Companies need to fully get to know who the target market is, how they think and feel, what they do, how old they are, where they live, what their hobbies are and more. Companies need to be able to live, think, breathe and feel like their target market to develop products and services that fit the needs of the target market. Companies need to remember that product and service development needs to have an existing marketing to sell, rather than developing products and services, and then seeking out a target market in which to sell it.
Developing a Marketing Plan
Marketing takes time, money, and lots of preparation. One of the best ways to prepare yourself is to develop a solid marketing plan. A strong marketing plan will ensure you’re not only sticking to your schedule, but that you’re spending your marketing funds wisely and appropriately.
What can a Marketing Plan do for Your Small Business?
A marketing plan includes everything from understanding your target market and your competitive position in that market, to how you intend to reach that market (your tactics) and differentiate yourself from your competition in order to make a sale.
Your small business marketing budget should be a component of your marketing plan. Essentially, it will outline the costs of how you are going to achieve your marketing goals within a certain timeframe.
If you don’t have the funds to hire a marketing firm or even staff a position in-house, there are resources available to guide you through the process of writing a marketing plan and developing a market budget.
Bend Your Budget When Necessary and Keep an Eye on ROI
Once you have developed your marketing budget, it doesn’t mean that it’s set in stone. There may be times when you need to throw in another unplanned marketing tactic — such as hosting an event or creating a newspaper ad — to help you reach your market more effectively.
Ultimately, it’s more important to determine whether sticking to your budget is helping you achieve your marketing goals and bringing you a return on investment (ROI) than to adhere to a rigid and fixed budget.
That’s why it’s important to include a plan for measuring your spend. Consider what impact certain marketing activities have had on your revenues during a fixed period, such as a business quarter, compared to another time period when you focused your efforts on other tactics. Consider the tactics that worked as well as those that didn’t work. You don’t have to cut the tactics that didn’t work, but you should assess whether you need to give them more time to work or whether the funds are best redirected elsewhere.
Granted, some tactics are hard to measure — such as the efficacy of print collateral (brochures, sales sheets, etc.), but you need to consider the impact of not having these branding staples in your market tool kit before you reign in your graphic design and print funds.
Marketing plans should be maintained on an annual basis, at a minimum. But if you launch a new product or service, take time to revisit your original plan or develop a separate campaign plan that you can add to your main plan as an addendum.
At the end of the day, the time spent developing your marketing plan, is time well spent because it defines how you connect with your customers. And that’s an investment worth making.
The primary benefit of a strategic marketing plan is that it puts a written guide in place for a business to follow to reach its goals and objectives. The second major advantage of strategic marketing planning is that is allows the business to create and utilize consistent messaging internally and externally. Consistent messaging in marketing creates efficient companies because employees and customers understand what the company offers and how the company offers it. They work toward a common goal. Efficient companies typically see an increase in revenues and market share, while it sees a decrease in expenses. Ultimately, it all leads to an increase in company profitability.
- Rallying point: Your marketing plan gives your troops something to rally behind. You want them to feel confident that the captain of the vessel has the charts in order, knows how to run the ship, and has a port of destination in mind. Companies often undervalue the impact of a “marketing plan” on their own people, who want to feel part of a team engaged in an exciting and complicated joint endeavor. If you want your employees to feel committed to your company, it’s important to share with them your vision of where the company is headed in the years to come. People don’t always understand financial projections, but they can get excited about a well-written and well-thought-out marketing plan. You should consider releasing your marketing plan–perhaps in an abridged version–companywide. Do it with some fanfare and generate some excitement for the adventures to come. Your workers will appreciate being involved.
- Chart to success: We all know that plans are imperfect things. How can you possibly know what’s going to happen 12 months or five years from now? Isn’t putting together a marketing plan an exercise in futility . . . a waste of time better spent meeting with customers or fine-tuning production? Yes, possibly but only in the narrowest sense. If you don’t plan, you’re doomed, and an inaccurate plan is far better than no plan at all. To stay with our sea captain analogy, it’s better to be 5 or even 10 degrees off your destination port than to have no destination in mind at all. The point of sailing, after all, is to get somewhere, and without a marketing plan, you’ll wander the seas aimlessly, sometimes finding dry land but more often than not floundering in a vast ocean. Sea captains without a chart are rarely remembered for discovering anything but the ocean floor.
- Company operational instructions: Your child’s first bike and your new VCR came with a set of instructions, and your company is far more complicated to put together and run than either of them. Your marketing plan is a step-by-step guide for your company’s success. It’s more important than a vision statement. To put together a genuine marketing plan, you have to assess your company from top to bottom and make sure all the pieces are working together in the best way. What do you want to do with this enterprise you call the company in the coming year? Consider it a to-do list on a grand scale. It assigns specific tasks for the year.
- Captured thinking: You don’t allow your financial people to keep their numbers in their heads. Financial reports are the lifeblood of the numbers side of any business, no matter what size. It should be no different with marketing. Your written document lays out your game plan. If people leave, if new people arrive, if memories falter, if events bring pressure to alter the givens, the information in the written marketing plan stays intact to remind you of what you’d agreed on.
- Top-level reflection: In the daily hurly-burly of competitive business, it’s hard to turn your attention to the big picture, especially those parts that aren’t directly related to the daily operations. You need to take time periodically to really think about your business–whether it’s providing you and your employees with what you want, whether there aren’t some innovative wrinkles you can add, whether you’re getting all you can out of your products, your sales staff and your markets. Writing your marketing plan is the best time to do this high-level thinking. Some companies send their top marketing people away to a retreat. Others go to the home of a principal. Some do marketing plan development at a local motel, away from phones and fax machines, so they can devote themselves solely to thinking hard and drawing the most accurate sketches they can of the immediate future of the business.
Tips and Tricks templates
Tip 1: Conduct an Overall Assessment
First, you should do an assessment of your current marketing materials. Look at what is working and what is not working. Determine how effective your marketing efforts have been and what kind of results were generated. You also need to look at how your clients perceive you. The way you see your company may be very different from the way your audience views your company.
Tip 2: Set Your Goals
As with any initiative or task, there has to be a goal in mind. Without a goal, how can you measure your success? The goals should also align with your company objectives and should be specific, obtainable and measurable. You need to have a plan that is substantial enough to show a return on your investment, but it also needs to be flexible enough to evolve.
Tip 3: Determine Your Target Audience
In order for your plan to work, it is critical that you know who your audience is so that you can determine the best way to reach them. Some products and services are geared for a wide audience, while others target a more specific market. You need to know as much about your target audience as possible.
Tip 4: Perform Research
Good research can go a long way. It is the backbone in how you determine and improve your strategy. Research is concrete feedback and without knowing these facts, you would be guessing about which steps to take next. This can cause you to miss your target audience all together which will lead to missed sales and opportunities. Research can be done through a variety of ways that may include focus groups, surveys and the internet.
Tip 5: Determine Your Strategy
Your strategy is your “logic” through which the goals and objectives that you have established will be achieved. The strategy will outline how a particular product or service will be promoted to your target audience. Marketing strategies are used to increase sales, drive brand awareness, launch new products and generally provide profit for a company.
Tip 6: Define Your Tactics, Budget and Resources
Now you are ready to take the plan to the next level in which you determine the appropriate tactics to utilize in order to meet your goals. When you choose the tactics, summarize what it is, how to implement, why you should use it and what you expect from the outcome. Also, determine how you will track and measure each tactic: what gets measured gets results. Next, you need to determine your budget. The best way to arrive at some estimated costs is to list the tactics that you have identified in your plan with the associated costs outlined for each. You also need to determine who will implement the tactics. Can the implementation be done in-house, or will you need to look to outside sources?
Tip 7: Evaluate Your Plan
You spent a lot of time creating your marketing plan and you also need to include ways to know if your plan is working. You’ll need to give your plan time to work however. Some things will need to evolve and some things will need time to ramp up. Keep this in mind when evaluating if something is working or not.
Take time to conduct market research so you can identify:
- Who your target audience is
- Where you can find them
- What they value as important
- What they are worried about
- What they need right now
It’s helpful to create a sketch of the person or business that you would consider your “ideal customer.” Not only can this help you identify specifics about them, but it can also help you personalize your marketing messaging.
Promotional plan key elements
- Public relations
- Direct sales
- Internet marketing
- Sales promotions
- Marketing materials
- Other publicity efforts
Outlining exactly what you need to do and when you need to do it is an important part of your marketing plan. This will become your task list that guides you through every one of your promotional activities. Your action steps will help you stay on track so you can make consistent progress, without having to regroup and recreate the wheel every time you’re ready to take a step.
To create your marketing plan action list, you will follow the same process you use when you manage your regular daily tasks: You will take the end goal, and break it down into a series of single-step tasks that will lead you to achieving your goal.
For example, if one of the activities outlined in your promotional plan is to launch a direct mail campaign, your first few action steps may look like this:
- Determine your budget for the campaign
- Clarify your objective of the campaign
- Determine the type of direct mail you will send
- Hire a designer or firm to create your collateral
- Write (or hire out) the copy for the direct mail piece
- Clarify the call to action
- Have a draft of the direct mail piece created
Your action list can take a number of different forms, as long as it is created in a way that supports progress. Each action item should also include a due date that works with the timeline you created for your marketing plan. And typically, the smaller the steps, the easier it will be for you to complete tasks and build momentum.
- Use your marketing plan on a regular basis as you plan your marketing activities.
- Avoid thinking of your marketing plan as a concrete document. It should be flexible enough to accommodate changes in your business.
- Don’t ignore your current customer base. Creating repeat customers should also be one of your marketing goals.
- Don’t be distracted by what your competition may be doing (or not doing). What works for your competition will not necessarily work for you.
- Avoid adding too many tactics to your promotional plan. The fewer you have at one time, the easier it will be to measure results and fine-tune activities.
- Give it time. You won’t know immediately if a particular marketing activity or strategy is going to be successful.
- Be open to learning from each success and failure, and apply it forward every time.
- Marketing Strategy: How will your marketing plan support your business goals?
- Mission Statement: What are you trying to accomplish, and why?
- Target Market: Who are you trying to reach with your marketing activities?
- Competitive Analysis: Who are you up against, and where do you rank?
- Unique Selling Proposition: What makes your business unique?
- Pricing Strategy: What will you charge, and why?
- Promotional Plan: How will you reach your target market?
- Marketing Budget: How much money will you spend, and on what?
- Action List: What tasks do you need to complete to reach your marketing goals?
- Metrics: How are you implementing, and where can you improve?
Once you have completed each step, you will have a marketing plan that you are ready to use as a blueprint for your marketing activities in your small business.
This guide includes an number a healthy tips and tries to cover the big picture you ll need to consider making a marketing plan.
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