|Marketing: How to compile a marketing plan
Once you've focused your business idea (this will establish what your 'core business' will be), your next most important task is to plan how you will get your product into the market. This marketing plan will provide answers to questions like who you think will buy your product, how many they will buy, what they will be prepared to pay, how you will make them aware of your product, and how you will get the product to them.
A marketing plan will usually be written as part of your business plan, when you are launching your business. However, as your business develops, your marketing needs will change. You might start selling a new product, and need a specific marketing plan for that product. Or you might change the focus of your business, and decide that it needs a new image. A new marketing strategy will help you do this, so you need a plan of how to implement it.
Writing down a detailed plan will help you to:
- Clarify exactly what benefits your business and products offer;
- Ensure that you are going to aim your product at the right people;
- Alert you to potential dangers ahead, like new competition, problems of affordability and not enough customers; and
- Ensure that you have enough money to make your marketing effective.
Here are some useful sections to include in your marketing plan:
A sales forecast
This section needs to answer the question: How much will I sell? This is always a difficult question to answer when you are starting up or launching a new product. Fortunately, there is almost always someone else already doing what you plan to do, or at least doing something similar. You need to find out what quantities are being sold by competitors, and make your estimates based on some (conservative) prediction of how many of their customers would buy your product. (The factsheet on How To Do Market Research will be helpful here.)
Larger businesses tend to use market reports or government statistics (available in most libraries) to get an idea of the size of a market and how it is developing. As a small business, you might find this information useful, but will usually base your forecasts on your own localised market research. Talk to other businesses in your sector, especially competitors, as their experience is as "close to the action" as you actually get into that business yourself. While they might not want to let out any trade secrets, there is still much you can learn from their day-to-day operations.
Set yourself some hard, rands-and-cents objectives that you expect your plan to achieve. For instance, write down how much you expect your turnover and profit to improve in the first month, two months, six months and twelve months after you start your marketing campaign. You might need to 'guess-timate' (that is, make an educated guess) the first time around, but you need to have landmark so that you can assess the success of your marketing efforts.
One of the things you will want to know is whether the market you are entering is going to survive. Before you go looking for customers in a particular market, find out whether the market is growing or standing still. Will the market that you sell to be there in a few months or years? Is the market seasonal? What outside factors or trends might affect the demand for your products?
A client profile
This is where you answer that all-important question: Who will buy my product? Describe the kind of customers that your business will be looking to attract, and where you expect to find them. A small general shop may only service the needs of residents in a few dozen streets, for instance, but a specialist restaurant may have to attract a more diverse clientele from further afield.
Your business may decide to sell to different markets. For example, a retail business can service a local area through the shop and a national area by mail order. A small manufacturing business could have a market in the local town, as well as in big cities further away and even an export market in another country.
A competitor profile
You need to know who your direct competitors are, and what substitutes there are in the market. What are your competitors' main strengths and weaknesses? Find out about your competitors' product range, specifications, prices, discount structure, delivery arrangements, minimum order quantities, terms of trade and how they advertise.
Your marketing plan will then have to take into account what your competitors are doing, so that your marketing message (and your products themselves) offer customers something different, something better, or something cheaper.
A product profile
What is your core product and what are its features? Customers buy products or services to satisfy a need, and that is what your business should aim to do: satisfy a need. When asked what his business did, the founder of a successful cosmetic firm replied: "In the factories we make perfume and in the shop we sell dreams."
This same philosophy is true of every business. As people's hunger and thirst needs are satisfied, other needs such as safety, self-esteem and self-realisation come into play. Where are your business's customers on the needs hierarchy, and how can your product or service help them to satisfy their needs or achieve their goals? How do customers perceive the kind of product or service that you will offer? What are their likes and dislikes? What features of your product or service would be most likely to make them use the business's product?
A distribution strategy
Is location important in the sector that you will operate in? If you will rely on customers coming to you (rather than you going to them), then location is indeed crucial. On the other hand, what are the options for delivering your product to customers? Are you close enough to your market to be able to deliver quickly and affordably? Maybe delivery could be a value-added service you can offer.
A pricing strategy
What will people be prepared to pay? How much can you expect to sell at that price? Will this cover your direct costs plus overheads?
A promotional strategy
How will you create awareness of and demand for your product? List all the activities that you will implement to make your marketing happen. Consider the various ways of marketing a product, and work out the right 'mix' of these different options to suit your market/s. These options include advertising (leaflets, magazines, newspapers, radio, etc), presentations to potential customers, direct mailing, an internet presence, etc.
Set clear objectives for each activity, and describe how the results will be monitored.
This should contain details of the costs of the marketing activity, including your own time, consultants, printers, event managers, etc and an estimation of when you will need to spend this money.
After drawing up the plan, remember that it is there to be applied. So:
- Keep it visible (on your desk, if possible!);
- Read it regularly to assess whether your plans are having the desired results;
- Discuss it, regularly and often, with your business partners, and don't be afraid to point out where it is failing;
- Keep adapting it where necessary, if something doesn't seem to be working.