Genre: Instruction

Marketing plan - how to write Adopting a customer focused business ethos is a proven method to increase the chances of a sustainable and profitable future. The marketing planning process is at the heart of any truly marketing orientated company, and ensures the customer is at the centre of key decisions. The plan is a detailed written document which can be used to promote a single product of form the annual business strategy. Marketing-made-simple.com has split the marketing plan into three steps which are easy to follow and relevant to both small and large businesses. The marketing plan should provide direction for all relevant members of the organization and should be referred to and updated throughout the year. The main purpose of the marketing plan is to provide a structured approach that ensures the marketing manager considers all the relevant elements of the planning process which could otherwise be missed if a more rushed approach is adopted. Stage 1: Research & planning This section includes the following: Statement of your current situation and scope of the plan Research into potential / current customers Examining the marketing environment Identifying opportunities for growth Current business situation Summarise where you are at the moment, possible items include: Financial results Sale figures and trends Market share Customer satisfaction Level of repeat business The marketing environment Examining both the internal and external marketing environments can identify both opportunities and threats to the business and is a core component of the plan. The whole area is usually broken down into the macro, micro and internal environments as summarised in the diagram below. The macro-environment A commonly used method of quantifying the macro external environment is with a PEST analysis. PEST is an acronym which divides the macro-environment into four areas -- Political, Economic, Social, and Technological, examples of which are shown below. Political environmental factors Trading agreements Tax rules Employment regulation Environmental legislation Legal issues Economic environmental factors Recession Interest rates Exchange rates Rate of inflation Population wealth Growth of the housing market Social environmental factors 'Green' behaviour Eating habits Shifts in attitude Population demographics Attitudes to career Technological environmental factors Emergence of new communications channels Improved production processes Advances in computing and the internet New technologies such as electric vehicles Automation Reduced cost of materials Micro-environment The micro-environment includes factors which are still not directly under the control of the company, but more directly relevant to strategy such as consumer trends, stakeholders, suppliers and competitors. Some example items are listed below. Summary of your market segment Market growth, trends and competition Potential new markets Direction from shareholders Supplier costs and service quality Changes is consumer behaviour Understanding your customers and market Ensuring a thorough knowledge of the consumer is vital for successful marketing planning. Use the primary and secondary (first and second hand) market research information at your disposal to describe your customer. The more accurate your picture of your consumer, the better you'll be able to design products which cater for their needs and the easier it will be to communicate with them. If you have a broad customer base, you might need to split your customers into groups (segmentation). Understanding your competitors Internal environment The internal marketing environment includes factors that the business can directly influence. This can include: The organisational structure The strengths and weaknesses of a department Financial stability and resources Staff morale Spare production capacity Client base Pricing structure Selling channels Staff skills Identifying opportunities in the marketing environment Once you have completed the internal and external environmental audit, you can summarise your findings using a SWOT analysis which can be used to make key decisions. SWOT analysis A ' SWO T analysis' is a useful way of summarizing the results of the environmental audit and presenting the current status of a business. SWOT simply stands for the Strengths, Weaknesses, Opportunities and Threats which have emerged from examining the macro, micro and internal marketing environments. For example, here is a SWOT analysis for a fictional electric car manufacturer Strengths Our electric motors are cheap to produce and maintenance free Charge time is class leading Production capacity can be increased R&D department is class leading Weaknesses Batteries are heavy, slow to charge and provide limited mileage Dealer network is small Customer trust in the segment is low Market is highly competitive Opportunities Government grants are available Road tax breaks for electric cars Market is growing rapidly Battery technology is evolving Threats Tesla has secured a large government grant The big players are investing heavily Hybrid and diesel technology is evolving fast Stage 2: Marketing strategy This section includes the following elements: Development of mission statement Statement of objectives Strategy and tactics to accomplish the objectives Mission statement Your mission statement is a formal commitment and focus for the business. It should explain to customers concisely what the nature of your business is and where you are going, and also provide a motivational tool for employees. It should be aspirational, something to strive for, yet obtainable and relevant. Once this has been defined it should form the focus for your business strategy. Vision statement A vision statement is a more long term, ideal-world statement which outlines where you would like to take the business in the long run. Objectives Combined with the mission statement, your objectives should be the key statements that drive your business. The most successful goals follow the SMART acronym. Specific, measurable, achievable, realistic and time bound. What do you want to achieve by the end of this year? Where do you want to be in one, five, ten years? Objectives must be quantitative in order to accurately measure success. For example, 'sell 600 units in the next year' or 'increase customer retention by 20%'. Selecting a suitable strategy Selecting a strategy for growth - the Ansoff Matrix Most businesses need to grow, and the Ansoff Matrix (below) is a method of determining the best course of action if growth is your priority. Product development Creating a range of similar products, for example shaving foam if you are already manufacturing razors Diversification Developing a new product for a completely new market Example tactics: Market research Product research and development Selecting a pricing strategy Once you have determined the product and market you want to be in, the next problem will be setting a price. Porter's model discusses three strategies for competitive advantage based on price. Three generic strategies for competitive advantage - Porter's model Cost leadership: A good quality product at a lower price than the competitors Differential strategy: A product or service which is perceived as unique within a particular market Focus strategy: Delivering focused attention to a particular segment to deliver service which competitors cannot compete Determining which products to invest in If you have a product range it is likely that some will do better than others. The Boston Consultancy Group matrix is a method of determining which to invest in, and which to drop, shown below. High market share Low market share High market growth Stars Question marks Low market growth Cash cows Dogs Stars High growth products with a strong market presence. Probably need high investment to maintain position. Cash cows Low growth products with a high market share. Probably don't need much investment, but require management to maintain profitability. Question marks Products which have potential, but may require investment to yield decent profits. Dogs Rarely worth investing in, dogs should at least break even to be retained. Tactics - the marketing mix The marketing mix is a selection of customer focused business elements which work together as a toolkit to market your product or service. The tactical section of a marketing plan summarises how you intend to use each element of the marketing mix, which can be summarised in seven 'Ps' as shown in the illustration below. Product Product refers to the items you are selling or the service you are providing. Your product based tactics link back to your overall strategy - if your strategy is market penetration (see the Ansoff matrix), then there may be little need to do anything to the product. However if you have chosen product development or diversification, then a certain amount of research and development, and product design will be needed. Price Comparable pricing -- if you are not the market leader, competitors will have set a price expectation which can be followed Market penetration strategy -- deliberately low pricing in order to enter or control a market quickly. Place Place refers to the method of getting your product to the consumer - this could be a dealership or an online shop. How will you attract more retailers to sell your product? How will you maintain a premium appearance? How will your distribution network function? How many countries should you operate in? Promotion Promotion is much more than just advertising - this is the discipline of marketing communications. What is your branding strategy? Which promotional channels will you use? How will you divide up the budget? Will billboards work better than TV ads? What should be the discount for special offers? How will you generate positive PR? Should you out-source the creative work? Physical evidence This element of the marketing mix is mostly used to promote services. If you're not selling anything tangible, how will people know what they're getting? This is where physical evidence comes in. Examples of physical evidence include a brochure for a holiday tour, customer testimonials for a dentist, or a portfolio for a website design company. Segmentation, targeting & positioning When using the marketing mix, it is important to keep in mind the three generic stages of marketing - segmentation, targeting and positioning. Segmentation is the detailed breakdown of your customers into as much detail as practical, targeting then ensures all elements of the mix are tailored to your identified consumer group. Positioning the process of ensuring potential and current customers perceive your company in the way you would like them to. Stage 3: Actions, measurement and controls How will you monitor progress? Who will do which jobs? When will each element be completed? How will you adjust the plan? What will be the budget? This section discusses action plans, controls, measurements and reporting. Actions Developing an action plan An action plan is core to the marketing process -- a constantly evolving document which is cascaded to the relevant people and monitored regularly. Most action plans are relatively short term documents which focus on the coming year, but longer term implications should also be considered. Action planning is a stages approach: Clarify goals, and ensure they are SMART Link back to your objectives and tactics Set criteria for success Prioritize Set timings Determine who will complete each action point Monitor the progress of the plan and review regularly An example action plan is shown below Measurements, controls and reporting The final stage of the action plan is the implementation of measurements and controls and reporting results. Many models for monitoring the performance of businesses have emerged, many of which address the needs of key stakeholders and allow them to evaluate the overall success of a company. The balanced scorecard approach for monitoring company performance The balanced scorecard approach is a widely used method of monitoring overall performance and ensuring daily work is focused on the strategic objectives. The scorecard is a "strategic planning and management system...which is used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals". This approach encourages open communication throughout the business and allows tracking of performance throughout the year. Reference: http://www.balancedscorecard.org Traditionally, businesses have tracked success based on just one measure -- financial results. However the scorecard system views the business from four external perspectives to gain a more relevant approach to performance metrics. Learning & growth -- how you are innovating and improving to meet your goals Business process -- how critical processes are measuring up Customer perspective -- usually measured in terms of time, quality, performance and cost Financial perspective -- financial performance from the stakeholder point of view Each element is tracked using four items which are listed individually: Objectives - as identified in stage 2 of the marketing planning process Measures - how will success be measured? Targets - specific quantifiable targets Initiatives - how to make the targets more readily achievable Key performance indicators ( KPI s) Depending on your industry, you may also have certain specific metrics which determine success, these could include: Market share analysis Sales analysis Quality control Financial results Market research Marketing information systems CRM - New customers acquired, retention Service levels Brand awareness Competitor performance Benchmarking Profitability Gap analysis Gap analysis is another useful tool which answers two questions: Where are you? Where do you want to be? It can be useful to identify where you are with the following facets of the business: Organisation Business direction and marketing mix Business processes Information technology Requirements vs capability Market potential vs existing usage Your business vs competition Feedback Now that you have an accurate picture about the success of your plan it's important to feedback this information in order to fine tune the strategy and update the courses of action accordingly. Final words The marketing planning process is a comprehensive method for examining your business, your market and the environment in order to develop a strategy to exploit opportunities. It is a vital process which should be used by almost every company to ensure a profitable and sustainable future.