Why You Need a Marketing Plan
Why You Need a Marketing Plan
It takes careful planning and a comprehensive understanding of the marketplace order to develop a business strategy that will ensure success. The most successful businesses have undoubtedly started with a marketing plan.
Marketing fulfills a vital function. A business owner must be familiar with the business's customer base, as well as the strengths and weaknesses of the business's competitors. These factors, and others, should be identified in a well-prepared marketing plan.
A good plan will outline how a business can attract and retain customers, how it will compete against its competitors, and the budget needed to attain positive results. It should include market research, business location, the target customer group, competition, the product or service being sold, budget, and advertising and promotion.
An effective marketing plan begins with conducting market research. This will provide relevant data that will help you solve any potential marketing problems. Often, the three most pragmatic ways to conduct market research are by using a direct mail survey, a telephone survey, or by conducting a focus group.
If using a direct mail survey, be sure to keep your questions short, with a total length of no more than two pages. A consumer probably won't voluntarily fill out and mail back a long questionnaire without an incentive. In addition, you should include a postage-paid envelope, so that the respondents don't have to pay for the privilege of helping you.If your budget is sufficient, send a reminder about two weeks after the initial mailing. Keep in mind that direct mail is probably the most costly form of research, with the printing of direct mail pieces, envelopes, postage, and any incentives used, and usually has the least favorable response rate.
Phone surveys are usually the most cost-effective manner in which to conduct a survey, in that you don't have print or mailing costs, and have a better chance of getting an individual to respond than if you simply mail a survey. The main costs are the interviewer's fee, phone charges, and preparation of the questionnaire.
Focus Groups are another way to gather specific data of your target audience. Your main costs are the interviewer's fees, expenses in recruiting and assembling the groups, renting a room if necessary, research time, any incentives used, and the cost of recording the interviews, if necessary.
Secondary data is also imperative to a successful market plan. Reports and studies done by government agencies, trade associations, or other businesses within your industry can give you important statistics on the area of research.
No matter what type of market research you do, your focus should be on gathering enough information to determine who your potential customers are, if there is a demand for your product or service, if there are competitors in your area and, if so, how successful they are in the marketplace.
The Components of Your Marketing Plan
Once you complete your market research, you are then ready to develop your plan.
Listed below are some basic components you should include.
1. Your Executive Summary
Include a brief summary at the beginning of your marketing plan to summarize its contents.
2. Your Goals
Discuss your marketing objectives. They should be clear, measurable and attainable within a specific time period (one year is usually the most effective time period for a marketing plan). If you have more than one goal, make sure they compliment each other, and make sure that components of your plan support your marketing goals.
3. Your Business
Define important characteristics about your business.
4. Your Customers
Analyze your customers based on age, sex, profession, income, educational level, and neighborhood. Where do your customers shop? What qualities do your customers value most about your product or service? What qualities do they least like about your product or service? Are there prospective customers who haven't heard about your product?
5. Your Competitors
Who are your competitors and how do you differ from them? How do your promotion methods differ from theirs? Is there a demand for your product or service, based on other competitors' successes? What are the similarities and dissimilarities between your product or service and your competitors'?
6. Your Product or Service
Describe in detail your product or service, emphasizing its special features, selling points, etc.
7. Your Location
Write a description of your business location, and the advantages and disadvantages of the location.
8. Your Budget
What are the costs allocated for advertising and promotions, including any printing and distribution of materials? List the advertising media you will use and estimate the cost for each medium. Will you use newspaper, magazine, Yellow Pages, radio or television? How about direct mail or telemarketing? Is there money in the budget for public relations activities, such as press releases or community sponsorships? Are there any possible future marketing methods to attract new customers?
9. Your Pricing Strategy
How will you price your product or service? Will it be below or above the competition? Will you factor in internal costs, such as materials, labor, overhead, etc.? List your pricing techniques and give a brief description of each technique.
A well-written, comprehensive marketing plan is fundamental to all business ventures because it describes how you plan to attract and retain customers, how you will compete, and what resources you have available to achieve your business goals.