Whether you are starting a new business or are looking for ways to grow your current one, a sound marketing plan is essential to your success. Studies have shown that more than half of new businesses fail within 4 years. To avoid falling victim to these statistics, it is imperative to develop at least a basic marketing plan with the following main elements.
If you have never done a marketing plan before, it’s great to start with some foundational principles that are taught in marketing school textbooks. However, do keep in mind that while these principles serve their purpose for giving pupils a basic understand of how marketing works, they are just that – the basics. As with many professions, advanced marketing goes ‘outside the box’ and strays widely from these foundational building blocks to develop marketing plans and campaigns that can take your business to the next level.
Nonetheless, we always start with baby steps, so take a read below for some guidance on starting your first marketing plan!
1. Marketing mix: Also known as “the 4 Ps,” which stand for product, price, promotion, and place.
“Product” refers to the goods or services provided by your business. In other words, the marketing plan should outline what it is you do or produce that makes your business profitable.
“Price” is the amount the customer must pay to obtain the product. Here is where you consider what your target market would be willing to pay, not just the cost of your product.
“Promotion” is how you communicate the information about the product to your customers. In other words, what ideas do you have to put towards your marketing campaign?
“Place” is where the customers can obtain the product and also outlines your method of distributing the product so it is within reach of your target audience.
As the foundation of your marketing plan, you must first define the 4 Ps for your business.
2. Target market analysis: This is the process where you identify, describe, and analyze your potential customers. A potential customer is someone who can receive the promotion, is willing to pay the price, and is able to obtain the product at the place (4 Ps). Therefore, you need to describe these potential customers in terms of their demographic, geographic, socio-economic, and even psycho-behavioral profiles. This analysis may then lead to modification of the previously defined 4 Ps in order to include, and even to exclude, certain potential customers.
3. SWOT analysis: SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal evaluations of your business which basically describe what your company is and isn’t good at. Opportunities and threats are evaluations of external factors that can either benefit your business (opportunities) or damage it (threats). In other words, this analysis is a review of the things you can (strengths and weaknesses) and cannot (opportunities and threats) control.
4. Competitive analysis: Whether you like it or not, you will have competitors that may slowly or very quickly destroy your business. Therefore, a competitive analysis is crucial in evaluating your competitors so you can respond appropriately.
First, you have to identify, as much as possible, all your competitors before stratifying them into different categories based on threat-level. Keep in mind that even alternatives to your product or service can count as competition – not just other businesses offering the same things as you.
Next, you need to perform a SWOT analysis on the competitors of the highest threat level. Finally, based on this information, you can develop plans to counter-attack, cope with, or evade the competition by modifying your 4 Ps. But be on the lookout, because your competitors may co-evolve and new competition can arise at any time.
5. Seasonal calendar of goals: We are all affected by seasons and your business is no exception, and we need to know in advance how we will ‘attack’ the market by setting clear marketing goals with definite deadlines in our marketing plan. Go through the next 12 months noting major holidays, social events (such as the election), and projected weather forecasts, or any other events throughout the year that will affect YOUR business. What types of promotion will you do to market your product at certain points in the year? Consider how each of these calendar changes and fluctuations can affect your business so that you can “dress” your business in seasonal-appropriate attires by modifying the 4 Ps.
6. Financial plan: Finally, a sound marketing plan is not complete without a realistic financial plan. At the most basic level, your financial plan should project the inflow and outflow of cash as well as keep track of your assets and liabilities. The cash flow may be forecasted by estimating expected revenue minus the expected expenses. With this you can then determine the break-even point which is when your revenue equals your expenses and when your company becomes profitable. Next, you should calculate and try to balance your assets and liabilities, which are non-cash items such as the equipment or investments (assets) and mortgage or other debts (liabilities).
Once you have developed a bulletproof marketing plan using these main elements, take a step back and see if this plan is both realistic and attainable. If so, do your best to stick to the plan and make definite goals with a timeline. Then remember to re-evaluate your plan at least once every quarter to make sure you stay one step ahead of the game, at all times.