How would you describe your marketing plan to a potential investor or to your management team. Would you have enough information to answer their questions? Consider what their questions might be.
What is being sold?
Who will it be sold to?
How big is the market?
Why will they want to buy what we are selling?
How will the marketing organization be structured?
Who will have what responsibilities?
What are your specific o 12512g618m bjectives?
What are the measurable milestones?
Will the value of the offering be obvious or will the prospect need education?
How will the offering be promoted?
What sales techniques will be used?
Will sales personnel need training?
What specific channels of distribution will be used?
In what geographical locations will sales occur?
Who will the competition be?
How will the offering be priced compared to the competition?
What will each competitor's share of the market be?
What form of post sale customer support will be required?
There are a "lot" of questions that must be addressed in a marketing plan. So, let's consider how you might approach the creation of your plan.
It is not only important for the plan to have the right content, but also to be presented in a manner that is informative and maintains the reader's interest. A good plan should be presented in the following manner:
summarize the plan - like the jacket cover on a mystery novel, tell the reader enough about the contents to convince them to read on
show the need - explain the problem in search of a solution, the extent of the problem and the desire in the marketplace for the solution
describe your solution - provide a description of your offering, explaining how it meets the market need in a better manner than any alternatives
explain delivery method - remembering that a better mouse trap doesn't guarantee success, describe planned promotion, sales techniques, channels of distribution, delivery to the customer and post sale support
acknowledge success barriers - explain how you will deal with expected or potential market resistance, difficulties of access to the market and competitive reactions to your offering
provide financial projections - show expected revenues and expenses
The most prevalent type of marketing plan currently being created addresses a business that somehow incorporates the functionality of the Internet. The Internet is an exciting way to contact your prospect, promote your offering, collect payment and sometimes even deliver your product or service. While this presents a number of new technical considerations, it does not change the need for addressing all of the traditional marketing plan concepts. As each of these concepts is described, implications of the Internet will be provided where meaningful.
The order in which you present your plan information to a reader seldom conforms to the way in which you gather and document the plan. Because of that, Plan Write presents the data input requests in an order that we hope is more consistent with the way you perceive the marketing and sales process.
Let's review in more detail how you might approach each of the above concepts in the order you are asked to enter the data.
Here you first want to describe your prospective buyer. This should include information such as whether they are an individual consumer or a business. Individual consumer descriptions include information like sex, age, level of income and much more. For businesses you should include information like the size of the company, the purchaser's job title, a description of likely secondary influencers of the purchase decision and, again, much more. If Internet is involved you should explain how it affects the sale and how the prospect interacts with the Internet.
You may plan to sell to more than one market segment, so you should describe each "target market" in detail.
Then you must explain why each target market wants your product or service and what they expect in the form of results. The results may be defined in terms of improving the prospect's financial situation or more effective day to day operations. For individual consumers "prestige" may be involved in the purchase. Explain factors like how the prospect can measure the benefits, whether they will require you to customize your offering and whether you expect the prospect to purchase more than one unit of your offering.
In most cases, the prospect has a variety of alternatives to solve their problem. You have explained the prospect's motivation for solving the problem your offering addresses so now you must explain the alternative solutions. For instance, if you are selling chain saws, the prospect could buy your product, a competitive chain saw product, an axe, a tree saw, or (to stretch the point) a pair of beavers. They could also be influenced by tree conservationists and decide to purchase nothing. This description should explain the prospect's alternatives and why they would choose your offering.
Your product or service provides a solution to a problem or a need in the marketplace. The first part of this section is usually the easiest to document because you are most familiar with it.
If it is a product describe the function performed, the physical characteristics, operational characteristics, technological factors of import and unique aspects that make it more desirable to the market than competitive products.
If it is a service describe the purpose, content, method of delivery and unique aspects that make it more desirable to the market than competitive services.
If the product or service has a direct relationship with the Internet, the relationship should be described in basic terms. In particular, if the offering will have an impact on how users interact with the Internet, the implications must be explained.
The more difficult documentation requirement, and probably the more important, is to explain why the offering is of value to a purchaser. You should present the value in measurable terms.
For example, a product might "reduce rejects by 20% and eliminate one person from each assembly line" or, in the case of an Internet product, it might, "reduce download time of high volumes of information by 50%". A service might "educate middle management in personnel review techniques, thus significantly reducing employee dissatisfaction". Your explanations should be specific and detailed.
At a more general level you can address concepts such as the ability to achieve measurable results, the amount of time required to realize a benefit, a typical return on the customer's purchase price or the useful life of the product or service.
There are two basic promotion strategies, PUSH and PULL.
The PUSH strategy maximizes the use of all available channels of distribution to "push" the offering into the marketplace. This usually requires generous discounts or commissions to achieve the objective of giving the channels incentive to promote the offering, thus minimizing your need for advertising.
The PULL strategy requires direct interface with the end-user of the offering. Use of channels of distribution is minimized during the first stages of offering promotion and a major commitment to advertising is required. The objective is to "pull" the prospects into the various channel outlets creating a demand for the offering the channels cannot ignore.
The advent of the Internet has provided even the smallest business with the ability to pursue a PULL strategy without the high dollar commitment to advertising. However, the dollar commitment is replaced by the investment of a great deal of time to make your Internet web site "findable" among the millions of other sites. And, if you feel the need for quick penetration, a major expense for promotion is still in the offing.
Your pricing strategy is heavily influenced by whether your objective is cash generation or market penetration.
Cash generation is possible if you can price the offering significantly higher than your cost to produce. To achieve this there must be minimal competition. This could be because you are the first to the market, you have a monopoly on the market or because you are the only one willing to offer such an offering due to market decline, liability, social pressures, market location, etc.
Significant market penetration is usually only feasible in the early stages of an offering form's life cycle and is often accompanied with very competitive pricing. In later life cycle stages, market penetration might be feasible if you are able to offer much greater value for the same price or you have been able to substantially reduce your cost to produce as compared to the competition.
Describe your pricing strategy in terms of dollars per unit and how that compares to the competition. If you plan pricing specials or volume discounts, describe them. If you intend to use dealers or distributors, discounts or commissions will be required and should be described.
The mix of sales from full price to your deepest discount will result in an average selling price (ASP) that is lower than your retail price. You should project this mix and the resulting ASP.
Often products or services are sold through channels other than direct sales to the customer. Describe the channels of distribution you will use, their reputation, financial stability, ability to address your target markets, the discounts or commissions they expect and the volume of sales you expect to achieve through each channel. Make some assessment of how your success depends on each of the channels.
If your business is going to be dependent on channels of distribution that aren't under your direct control you should understand these channels thoroughly. Consider how your use of the channel will compare to your competitor's, whether the channel's locations are consistent with your target market, if the channel's reputation is consistent with your image, the financial stability of the channel, whether the added sales will justify the channel discounts required, whether the channel has experience with your kind of offering and, very important, whether there will be a conflict between your in-house sales and the selected channels.
The objectives of every business are only achievable by overcoming any number of barriers. The earlier and better you understand the nature of these barriers the more likely you are to be successful. Competition is the backbone of a capitalistic marketplace. It is also the greatest potential barrier to your success. You should describe the competitive aspects of your industry in general and then provide detailed descriptions of the strongest specific competitors.
This is also where you should address "SWOT", strengths, weaknesses, opportunities and threats. Your purpose is to describe the most critical aspects of the plan, explaining how you will leverage your strengths to take advantage of perceived opportunities or to respond to threats and how you will compensate for known weaknesses. Depending on your situation, this may address many factors. Factors like special or unique abilities your organization may possess, new or proprietary technology that may benefit or threaten you, changes in the economy, requirement for or loss of key personnel, changes in government policies or regulations, market entry of new competitors and social or environmental changes.
After reading the text in this topic, the reader should understand the essence of your plan.
It is important to show expected revenues and expenses for your marketing and sales organizations. However, recognize that this is an "estimate". While projections for the first year should be fairly detailed, beyond that the objective is to provide an understanding of the potential scale of revenues and earnings. A projection showing revenue in the fifth year of $5,000,000 versus one that shows $500,000,000 creates a major difference in perception. Of course, these projections are believable only if you have done a good job with the preceding information.
A marketing plan is typically designed to establish a framework for management to use as they pursue the marketing and sales objectives.
The summary should clearly present the highlights of your plan that can be referred to whenever there is any question about the plan objectives.
While this is the first thing you want the reader of your plan to see, it will likely be the last thing you will write. Because of this, Plan Write's text entry dialog waits until you have documented everything else before asking you to prepare the summary.
Clearly and concisely, describe your organization, your objectives, key personnel, the product(s) or service(s) you will be selling, the market to be addressed, your strategy for accessing and selling to that market and briefly the financial results you expect in the first three to five years of operation.
It is important that everyone involved in your effort has a clear understanding of your objectives. A good marketing plan achieves that.
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