What is a marketing plan and why do I need one?

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By: Business Advisor Tom Leach

What is a marketing plan?  What should it contain?

Of course the starting point is to understand what marketing is in the first place. Marketing starts with who the customer is and their needs and wants. That will vary depending upon which customer segment the company is targeting. Understanding the customer segment’s attitudes and wishes is critical and deserves careful thought.  Products then need to be differentiated from competitive choices in order to best satisfy the segment’s desires.  Pricing represents the value of the product and must match the product’s attributes and benefits and of course must be competitive. Where the product is sold should represent how the customer wishes to shop for it and acquire it.  Finally, communicating the value of the product must take into account which media the customer follows and how the product is presented to them in terms of need satisfaction and how it is a better choice than competitive products. Product positioning is an important issue to consider.  Positioning is the customers’ perception of the brand’s value in relation to the competitive choices.  In other words, it is the mental definition of the brand in the mind of the customer.

A marketing plan is a document that outlines the situation or business environment that the business is currently operating within and then lays out the objectives, strategy and programs to accomplish the objectives going forward.

business-idea-1240825_1920The situation could be thought of as the business’s external environment, which would include: the economic, legal/political, technological, competitive, socio-cultural and demographic/customer trends. Some of these may be relatively more important than others at different times.  In addition, the situation should consider the company’s internal strengths and weaknesses, as well as its external opportunities and threats. The external environment and internal situation are dynamic and evolve over time and so the business should be thinking of how its offerings may evolve and get better.

It’s important that a business carefully define its mission in order to remain focused on the nature of the business.  The market segment that is targeted should be carefully researched to determine its size and the target’s: demographic, psychographic, geographic profiles and the customer behaviors related to product usage. The product offerings should be carefully evaluated in terms of how they benefit the customer and how they are better and different from competitors.

Objectives are the specific, desired accomplishments the business sets out to achieve.  Market share growth is important because getting larger usually offers economies in the operations of the business.  Although, getting larger usually requires investments needed to achieve growth, so there may be trade-offs in terms of ideal sales levels.  Profitability is always critical.  How can the business reduce costs or increase efficiencies, increase sales?  What is the current profit margin? Must it be improved? 

Simply, a marketing plan needs specific, measurable, assignable, realistic and time-based objectives.

The company’s strategy is the big picture, game plan for achieving the objectives.  Generic strategies, as written about by Harvard Professor Michael Porter, include: cost/price leadership, differentiation or a focused strategy, based upon the customer segment the company is targeting. A best-priced differentiation strategy could be added to the list.  Of course, refining a company’s operations, product lines, distribution channels, promotional communications and pricing in relation to customer wants and needs and competitive realities are the guts of the strategic decision.

The marketing programs are the plans to be executed in order to implement the strategies. What are the product offerings and should they be altered or expanded?  How does the pricing strategy match up against competitors?  What kind of pricing incentives can be delivered at different times?  Introductory offers, specials and frequency programs could be considered. How does the customer buying experience compare with competitors? How can it be made easier, faster, more comfortable, and friendlier?  What is the promotional message? 

Keep in mind the desired positioning the company wishes to achieve.  Promotional messages need to be integrated across all media and personal contact points so that the brand is consistently described and the competitive position is achieved.  Media choices traditional, social media and web site content should be considered in terms of what the customer wants to know and what the company wants to send in terms of what the brand stands for. How good is the company’s customer service?  How can it be improved? The marketing bottom line is about building relationships with the customer.  Think of it as relationship marketing.

The marketing plan must be sketched out into a calendar of initiatives for all of the marketing activities, over a time period with a budget for each initiative with expected results that can be measured upon completion. Set up a spreadsheet or use a template and write and budget for all of the initiatives that are needed. Review and edit it. Execute it. Measure its results. What works and what doesn’t work can be fine-tuned over time.

Here is a simple outline for the steps to writing a marketing plan.

  1. What’s the situation, the external environment?
  2. What is the mission of your organization? Who is the customer, the target market and how will the organization solve their needs?
  3. What are the objectives that need to be accomplished?
  4. What is the organization’s strategy?
  5. What are the marketing programs, the tactics, which the plan will execute? Consider all of the 4 Ps in creating the plan: product, promotion, price and place (channel of distribution).
  6. F. Create a calendar of initiatives over time with a budget and expected results.  The calendar could be drafted using a spreadsheet and organized monthly and weekly for the year under consideration

Why does a marketing plan need to be written? After all, many businesses have been operating for years and have been managed based upon their intuitive and experienced practices. Novelist, E. M. Forster has the answer, “How do I know what I think, until I see what I say”.

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