Developing a marketing plan is a strategic, forward-looking exercise that will assist in determining a business’ product development, market development, channel design, sales promotions and ultimately impact profitability. It helps avoid future uncertainties and defines objectives.
By Cleveland SCORE
Marketing Plans are important tools for both new businesses and existing businesses with growth initiatives. Plans can be at the organizational or business-unit level. Optimally the plan will identify target customers, set up marketing objectives, and identify a timeline of activities necessary to reach objectives. It is a forward-looking exercise that helps management identify strategies for the organization relative to product development, market development, channel design, sales promotions and, ultimately, profitability. By defining a marketing plan, it reduces the risk of future uncertainties and sets marketing objectives. The plan objectives should support the overall business objectives.
As with any business plan, the marketing plan should have an Executive Summary Section that provides an overview of plan contents. The detailed portion of the plan should include sections and information on the following.
Products/Services: Provide information on the product/service that is being offered. Explain product/service details such as its characteristics, benefits to consumers, and competitive advantages that will prompt consumers to buy it over existing similar offerings. For existing business with expansion plans, identify how they fit into existing business products or expand the business to new markets.
Target Customers: Provide details on who is the ideal customer to buy the product/service. A source of information for this may be from the U.S. Census Bureau, the local Chamber of Commerce and/or the local Small Business Development Center. Include information on potential for future market expansion either with other new and related products that may attract new customers or by geographic expansion of the market.
Unique Selling Proposition & Competitive Analysis: The unique selling proposition is the message you want the target audience to receive, including your competitive advantage over existing suppliers of similar or substitute products. Provide information on customer pain points you are addressing and how your product/service is differentiated. For each customer target market there should be a unique set of selling propositions.
The second portion of this section related to Competitive Analysis should include an analysis of competitors, both direct and indirect. In performing the analysis, compare not only the product/service but also pricing, quality, advertising, management, location, customer service, marketing, reputation, and image.
Provide information on where your product/service fits within the industry.
Pricing Scheme & Sales Volume Potential: This is basically a pricing analysis. Determine the cost of the product/service, profit margin, and break-even point. Once the price for the product/service is set, provide comparative information on both direct and indirect substitute products/services. If there are multiple products/services, there can be different profit margins and rationale for this should be included.
Sales volume potential can be determined by data obtained from the local city/county, Small Business Development Center, or industry trade associations. Once the sales volume and price are determined, the estimated total sales should be compared to total expenses.
Location Analysis: Step one is to determine if you will be utilizing a physical brick and mortar location or selling online. You may also consider a combination of these depending on the product/service being offered. If your primary location will be physical consider the following: parking, public transportation, proximity to competitors, zoning issues, potential for expansion, visibility to customers, and electric capacity. If you are considering online selling, consider the following: optimal host location, software requirements, internet speed and accessibility and need for developers and ongoing technology maintenance and management.
Marketing Strategy: The strategy should be specific to the customer segments and their communication styles. This will help define the marketing channels you will use to communicate, reach, and retain customer loyalty. Considerations may include but are not limited to: emails, blogs, chat rooms, websites, emails, advertising, etc. Considerations for packaging, product distribution, marketing materials and customer service capabilities should be detailed.
Partnerships: This relates to the business forming partnerships with other organizations and businesses to help reach new customers. This “pairing” of products to customers will benefit both partners in the relationship.
Retention Strategy: Provide information on how the business plans to retain the customer base. In essence this is a plan to build customer loyalty.
Financial Projections & Goal Setting: This will be a detailed analysis of the costs related to marketing your product/service to the target audience. It should include categories such as, but not limited to: technology expense, mailing, internet monthly fees, licenses, development costs, ongoing technology maintenance and management costs, printing costs for brochures, trade show fees, etc. These are reasonable estimates and will never be 100% accurate. They do represent the best estimations at the time the plan is developed. Recognize, however, they play an important role in identifying which promotional strategies may result in the highest return on investment.
Marketing goals should be set to evaluate the effectiveness of the marketing strategy over time. These goals should support the overall business goals of your organization. They should be measurable, specific, and realistic. Some common goals would be categories such as but not limited to: sales dollars, units sold, market share, product mix, return on advertising investment, brand awareness, number of new accounts and customers, share of customers business, and sales conversion rates. The optimal targets for goals should have some stretch but be reasonable in providing a measure of success.
When undertaking the development of a marketing plan, small business may need outside expertise and support offered by a SCORE mentor. Mentors with a wide range of technical and user experience are available upon request.
The Cleveland Chapter of SCORE was founded in 1965 to foster and support the small business community in Northeast Ohio through mentoring and education. There are currently 80 volunteers with experience in the fields of business ownership, managers, accountants, attorneys, and other business fields that are ready to share their knowledge through mentoring.
For more information about our services for small business visit the website at www.cleveland.SCORE.org or call (216) 503-8160. In addition to mentoring services, there are also webinars available. Registration for these is found on our website.
