Writing a Marketing Plan
- Business Strategy
- Marketing Strategy
- Business Environmental Analysis
- Marketing Strategy Implementation
- Marketing Mix
- Implementing your Marketing Plan
Great marketing is great business; the marketing plan is the basis for executing your marketing strategy. The marketing plan shows your business objectives and the steps required to achieve them.A marketing plan includes details on your customers, how to attract & retain them and how to position yourself against competitors. A marketing plan will not guarantee sales, but a well-researched marketing plan will give you a much better chance of a building long-term & profitable business. There are many examples of marketing plans available and they usually begin with the executive summary; a brief overview of the plan and should be written after the full plan is completed.
Begin your marketing plan with an overview of your company, how it operates and how you want it to develop over time. Include a statement of your business mission, objectives and strategy for achieving the objectives.
This is done to ensure that your marketing plan and business strategy are aligned. If your business strategy is based on providing premium quality products; your strategy & plan should ensure your products are of excellent quality, charge premium pricing and target customers who appreciate this level of quality.
No company can attract every customer or every type of customer as different customers have different preferences ad reasons to buy certain products. Customers can be seen as segments or groups that share similar needs and buying preferences. The foundation of a good marketing strategy is to build up on market research that uncovers who your target customers are, what they buy and why. This insight will help you adjust your business, products, marketing and help you out perform competitors.
Business Environmental Analysis
To effectively plan for your business, you must understand the environment in which your business operates. This is important to identify opportunities or threats that exist or may arise which your business must prepare for. For example, a change in legislation or technology may render your product obsolete or provide you with an opportunity to move into a new area before your competitor. A business strategy and marketing plan should be designed with the 3 types of analysis in mind.
There are various type of environmental analysis but the 3 most commonly accepted are the PEST Analysis, SWOT Analysis and Porter’s 5 Forces Analysis.
PEST analysis is a macro economic analysis looking at the country in which your business operates. It covers the below following 4 elements:
- POLITICAL and legal changes such as new regulations or requirements.
- ECONOMIC factors such as interest rates, exchange rates and consumer confidence.
- SOCIAL factors such as changing attitudes, lifestyles, and demographics.
- TECHNOLOGICAL factors such as new technologies and infrastructural developments.
The SWOT analysis is an analysis designed to look at the internal elements of your company and external issues. STRENGTHS and WEAKNESS are internal to your company based on many factors such as your resource base, staff & expertise available, equipment and capital available in your company.
OPPORTUNITES and THREATS are external issues in the business environment; they are identified by performing a PEST analysis and Porters 5 Forces analysis. By examining your industry, you can adjust your marketing strategy, identify which players have power and identify opportunities and threats.
Porters 5 Forces
The Porters 5 Forces Analysis is a micro economic analysis designed to examine the industry in which your business operates such as healthcare, foodservice or hospitality. The 5 forces are:
- Threat of new Entrants:
These are new competitors likely to enter your industry and will depend on how easy or difficult it is to enter the industry. For example, it is difficult to enter the airline industry given the need to buy/rent planes and form agreements with airports. In comparison, it may be easier to set up a restaurant as premises & equipment may be rented and staff hired.
- Threat of substitute products/services:
Substitutes are other similar products/services that customers may choose. For example; when deciding on a night’s entertainment, a customer may choose between going to a restaurant, a bar, the cinema, and the theatre or music concert. Each company in this example is indirectly competing with each other customers.
- Bargaining power of buyers/customers
A company’s power to manage its product range, channel and pricing can be weakened if its buyers/customers are consolidated and have multiple suppliers. If customers are fragmented and have little choice, then the seller’s power is higher.
- Bargaining power of suppliers
Your company may have more bargaining power if you are seeking a product that is available from many suppliers and the product is not highly differentiate. However, if the product is unique and is available from a limited number of suppliers, then they may have more bargaining power.
- Intensity of competitive rivalry
Competitive rivalry can differ between industry depending on its market size, lifecycle stage and general behaviour of competitors. For example, in a young & high growth industry (such as the mobile technology hardware sector) competition is high and companies compete aggressively to win customers with superior products and differentiation. However in mature markets (such as pharmaceuticals) companies attempt to maximise their margins in the face of expiring patients.
Marketing objectives are your goals for the future and are designed to fulfil your marketing strategy. Your marketing strategy is designed to allow you to exploit your resources and is guided by the above mentioned environmental analysis.
- Objective: Increase sales by 10% over the next year.
- Implementation: Target a promising new customer segment.
Objectives should always be SMART:
- Specific– set a number or percentage to achieve.
- Measurable – track your performance against the specific measure.
- Achievable – based on your available staff & capital.
- Realistic – based on what your company can actually achieve.
- Time-bound - you should set a deadline such as 12 months.
Marketing Strategy Implementation
The marketing strategy is implemented through the steps covered in the marketing plan such as advertising, new product development, improvements in customer service etc. This requires that you have identified your target customers, their wants, their buying habits and how you will reach them.
Target customers can be broken into segments or groups that share unique characteristics such as those that shop late at night, price sensitive customers or customers who demand superior product quality and will pay accordingly. Each segment has its own wants and must be treated individually. For example a price promotion on low/mid tier products will be more effective on price sensitive customers.
It is more costly to attract new customers than satisfy existing ones, so start by ensuring your existing customers are satisfied with your products/services and try increasing your sales to this segment first. Then move on to attracting new customers.
Once you have identified your target customers, you must decide on your positioning. Positioning refers to the way you want your company or brand to be perceived by customers. For example do you want to be seen as a low cost supplier of low/mid quality products or a supplier of premium goods with a premium price? Use the marketing mix to achieve and maintain your positioning.
When implementing your marketing plan, you use the marketing mix. This is also known as the 4 Ps. The 4 Ps are the 4 market orientated aspects of your company that you can tailor to satisfy customers. They are essentially the marketing toolkit. For a more comprehensive approach, you can extend this to 7 Ps.
What value does your product offer to customer’s value, and does it meet their needs. You must understand what your customer wants and offer them products to satisfy them. For example, some car buyers are looking for low cost cars, elegant design or multiple safety features.
Your pricing should match your product such as low-cost, mid tier or premium products & pricing. When deciding your price you may match or undercut your competitors, charge a premium or alter pricing for different customers.
This is where you sell your products and can include stores, sales teams, online sites etc. Your place should be convenient for customers to get to. Its design should fit your positioning. For example, Apple’s stores and products share the same white minimal design appearance.
Promotion refers to the way you reach your customers. This can include television, radio, newspapers, billboards, PR, direct mail, personal selling, online banners, ad words campaigns or advertisements.
For many service businesses, your staff and their service are the product. Here, it is vital to have well trained & skilled staff who will support your positioning.
Your process can relate to how you products are made or delivered. For example, environmentally concerned customers may demand fair trade products or customers with nut allergies require products processed in a nut free zone.
- Physical evidence
When a customer enters your business, they are observing unspoken indicators of the quality of your work which shapes their perceptions. These can include your store design, stationary, branding etc. Appearance and behaviour of staff, atmosphere created by music, lighting, store layout and correct merchandising.
Implementing your Marketing Plan
Your marketing plan must describe each step required to achieve your objectives and strategy. Include key milestones, targets and dates to achieve and regularly check your progress against those targets. Use the approach of PLAN-DO-REVIEW. This means you spend 40% of your time researching & creating your plan, 20% implementing the plan and 40% reviewing how the plan went. This can help you to understand what improvements can be made in future.
Your business plan should take account of the resources you need and feed into your marketing plan. For example, you may need a budget available to set up a website, issue brochures and a local newspaper advertisement. Many businesses struggle with the amount of capital available so use the main marketing activities that will have the greatest impact. For example, a national television advertisement may yield less awareness & sales than local newspaper & radio advertising combined with a direct mail campaign.
Implementation of the marketing plan must be controlled. Be clear about which person in your organisation is responsible for what tasks and what adjustments need to be made if tasks are not met on time. This will allow progress to be monitored and help to identify areas of the plan that may be falling behind.
All parts of your business must work together. For example, if you have limited cash flow, avoid giving too much extended credit to customers otherwise your cash flow will suffer and could lead to business failure.
Remember to focus on your long-term strategy and build your capabilities to meet that strategy. For example, in recessionary time, businesses may save costs by reducing staff. But this can lead to poorer customer service and drive away customers.
Make sure you think through each of your objectives logically. For example, many businesses focus on creating new customers but don't fully provide the resources and training needed to satisfy these new customers.
By Robert Farrell