What is a marketing plan?
Marketing isn't just about promotion. Marketing is about understanding the wants and needs of consumers and then meeting those needs profitably.
Creating a marketing plan will help you to:
- identify and understand the market that you plan to enter;
- decide on the position of your product or service within that market in comparison to competitors;
- price your product or service and work out expected sales;
- recognise customers and target consumers and plan how you will communicate and promote your business to your target audience and other stakeholders.
Your marketing plan should cover one business year, although during the year you may have to amend your plan or make complete changes to it. This is due to the fact that the market environment will keep changing, new consumers may be identified or other cost factors may mean you have to adjust your pricing strategy.
How do I write a marketing plan?
A marketing plan is made up of:
- Situational analysis or marketing audit - This is where you identify the grounds that your business is based on by analysing the market, your competitors and your customers. SWOT and PESTLE analyses are used to establish more about the market you are looking to enter and your competitors but also help you to identify where you strengths and opportunities lie in the marketplace.
- Target market - It isn't just about sending a product out into the marketplace and hoping someone will buy it, you have to research potential groups of customers which you can segment. Then you can get to understand their likes and buying behaviours and target them with promotional activities to encourage them to buy your product or service. This is where the research that you have done for your business idea will come into play.
- Budget - You need to know how much you have to spend on marketing your business so that you can keep to budget and not overspend. It can be difficult to justify your marketing spend as it is difficult to directly associate sales to your promotional activities. For information on managing your incomings and outgoings, see budgeting.
- Marketing mix - Product, Price, Promotion and Place - It's important that you take each of these 'P's in turn and detail how they will be managed to ensure that you satisfy or exceed your customer's needs better than your competitors.
Find out what each one means and what it involves:
- Product - This entails not just deciding on your product or service but also the brand name, any guarantees, packaging and any after sales services.
- Price - This represents what the business will receive in exchange for the product or service. It's important that you set your price correctly as undercharging and overcharging can have dramatic effects on the success of your business. You have to take into account the costs of all of the other 'P's so that you can set a price which covers your costs, what your customers would be willing to pay and one that gives you some profit. Price should also take into account the perceived value and quality of your product and any enticements in offers that you use to promote the product or service to customers.
- Promotion - This involves identifying a message and then communicating information about the product and its benefits to customers. A range of promotional strategies should be used including: advertising; personal selling; sales promotions; public relations; direct marketing; and internet or online marketing.
- Place - This is about the distribution of the product or service. Are you going to sell the product or service online through a secondary seller or in shops or have a retail outlet? If you are a dance teacher, where will you put your dance classes on? This is how you will get your product or service to your customers.
If you're going to offer a service there are more 'P's to consider including, People, Physical evidence and Process. Information about these further considerations can be found at the Chartered Institute of Marketing - Marketing and the 7Ps.
