We’ve all heard tales of businesses formed without a marketing plan or with one that fits on a cocktail napkin. Sure, you can do that, but your chances of success are slim and in today’s hyper-competitive environment you need every advantage you can get. Its like planning your vacation by simply getting in your car and going wherever a whim takes you. While the trip might be fun, its unlikely you’ll get where you were going (reach your goal) and likely you’ll run into all kinds of snags and inconveniences along the way. So, we’re going to give you the how-to of developing a marketing plan for any business.
What is a Marketing Plan?
A marketing plan consists of everything in a business plan except the proforma financial statements. Lots of variation exists in constructing a marketing plan, but major elements of a marketing plan include (in order):
- Situation Analysis
- SWOT Analysis
- Strategic Plan
- Measurement and Control
Commonly, a marketing plan will comprise between 15 and 45 pages, not including figures, notes and references. A marketing plan will normally be developed projecting plans to five years in the future and are usually updated at least every year. The marketing plan forms the foundation of long-range planning for the firm as well as forming yearly tactical plans which detail the current year’s actions and expectations.
The Situation Analysis
Possibly the most critical element of the marketing plan, a situation analysis involves gathering information from various sources, including internal ones and references from newspapers, magazines, trade journals, and other reliable sources regarding both the internal and external environments. Basically, a situation analysis is a snapshot of where the firm is right now and what’s going on around it. Its kind of like the “You’re Here” identifier on a map. Without knowing where you are, you don’t know what direction to head to reach your goals.
Internal elements you’ll want to include are often called the 4 P’s. They include:
- Product – what kinds of things do you sell
- Price – what do you charge for various products and services
- Promotion – what current methods do you use to communicate with buyers and motivate them to purchase your products
- Place – or distribution; where are your products sold
External elements of the situation analysis include:
- Competition – based on Porter’s 5 forces model, competition is defined very broadly as any company whose products solve the same customer problem (remember, customers buy solutions, not products). Competition also looks at possible new competitors entering the marketplace
- Consumers – their culture and social interactions
- Economy – things like GDP, consumer confidence, balance of trade …
- Laws and regulations – both those passed by congress and those promulgated by regulatory agencies such as the EPA, OSHA, etc.
- Technology – both new technologies involved in doing your business, such as technologies supporting e-commerce or social media, and new technologies suggesting new products for your firm
Now, to be effective, your situation analysis needs to be detailed enough to guide decision making (more like a bird’s eye view than a view from space), contain all elements likely to affect your business, and show trends to suggest what the landscape might look like in the future.
The SWOT Analysis
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats — with strengths and weaknesses reflecting an evaluation of internal elements and opportunities and threats reflecting an evaluation of those external ones. SWOT analysis comes from mapping factors identified in the situation analysis on factors impacting strategy formation.
As an example, a situation analysis might include statistics showing an increasing Hispanic population in the US and an impact of this fact on the firm might be an opportunity (since this is an external factor) to introduce products favored by and targeted at this population.
Objectives or goals direct the actions of a firm and allow the firm to assess the extent of progress made through these actions. Objectives must have the following characteristics to be effective:
- They must be SPECIFIC, for instance your goals might be to increase market share by 10%
- They must be MEASURABLE so you can objectively determine whether the goal was reached or not.
- They must be ATTAINABLE - goals should be a stretch, but not so much of a stretch that they’re almost impossible
- They must be RELEVANT and fit with the organization’s mission
- They must be TIME BASED with an established date of completion – such as 1 year.
These elements complete the first half of the marketing plan. We’ll finish here for now and pick this up in the next post. Meanwhile, if you’d like to share your experiences with market planning, please comment below.
If you would like to have a marketing plan, but you’re having trouble developing one, we’d love to help. Just contact us for pricing.