A 5-step, no-nonsense marketing plan

The following article from BDC (business Developpment Bank of Canada)is right on.

A 5-step, no-nonsense marketing plan


Doing business without a marketing plan is like driving without a map. You may get to your destination – eventually – but you risk making time-consuming and costly errors along the way. For example, you might be assuming there's demand for your product when there isn't. Your services might be priced too low. Or you could be venturing into a market that is impenetrable because of regulatory restrictions.
Marketing plan = confidence

The only way to start a business venture with confidence is to develop a good marketing plan backed up with facts and research. It's a document that clearly shows how you'll attract potential customers to your product or service and persuade them to buy. As part of doing your homework thoroughly, the marketing plan builds confidence with financial institutions by showing you have a good chance of making a success of your business.

Contrary to popular belief, the marketing plan is not a one-time effort destined to sit in a binder on your desk. On the contrary, it should be updated on a regular basis to reflect the changing needs of your business and customers.

There are many different models for marketing plans. But here are the
5 essential steps.

5 steps to creating a successful marketing plan

1. Do a situation analysis

Many companies start with a SWOT analysis, looking at your company's strengths, weaknesses, opportunities and threats. An integral part of this is to clearly identify your competitors, understand exactly how they're operating and know their strengths and weaknesses.

Strengths are any competitive advantage, skill, expertise, proficiency, talent, or factor that strengthens your company's position in the marketplace and can't be easily copied. Examples are a well-trained sales team, low staff turnover, high consumer retention or low production costs due to technology.

Weaknesses are the factors that affect your company's ability to independently achieve its objectives. Examples are unreliable delivery, outdated production tools, insufficient marketing efforts or a lack of planning.

Opportunities are ways for your business to grow and be more profitable, such as seeking new markets, managing technological changes or addressing new consumer trends. You need to look at how your company's key skills can be used to take advantage of these opportunities.

Threats are barriers to entry in your primary markets, such as competitor's actions, labour shortage, legislative hurdles, or detrimental economic/political developments.

2. Develop a target market profile

Demographic portrait
Here you want to demonstrate you know your customers inside and out, including their expectations and their whims. Your profile should include basic demographics that paint a clear portrait of your clients. For example, you can look at factors such as age, sex, profession or career, income level, educational level and geographic location.

Estimated demand
You'll want to provide research that shows the estimated demand for your product or service and expected growth rate. This builds confidence with financial institutions that your business has growth potential.

Purchase motivation
Another important aspect is understanding exactly what motivates customers to buy. For example are your clients looking for savings, a way to simplify their lives or just shopping for pleasure? Ask yourself, why would they buy your product or service? In the same vein, you may want to know what keeps customers away from your competitors' products or services. Are they too costly? Do they lack something unique? This information is invaluable in developing a product or service that outshines the competition.

3. Set clear marketing objectives and targets

Here you describe the desired outcome of your market plan with attainable and realistic objectives, targets and a clear time frame.

The most common approach is to use marketing metrics. For example, your market objectives could look at total market share and segments, the total number of customers and percentage retained, the rate of purchases and the size/volume of purchases.

4. Determine your marketing strategy

Once you've determined your objectives and targets, it's time to look at how you'll promote or market your business to prospective customers. Typical strategies should cover the Four Ps of marketing. (Product, Price, Place and Promotion).

Your choice of marketing vehicles will be governed by your target market profile. For example, you need to understand how different vehicles reach different audiences. Don't make assumptions that you have to spend money on costly advertising. If you have a niche audience, for example, you can take advantage of low-cost marketing strategies such as e-mailing.

Generally speaking, the most costly options are advertising, sales promotions and public relations
Referrals and networking represent lower cost ways to reach customers
E-marketing is a powerful strategy because of its low-cost and targeted reach potential.

5. Do your financials

A marketing plan without financials has little clout. Your financials can also be included in your general business plan.

Important aspects to include here are:

A budget and forecast
A budget and sales forecast needn't be complex. In fact, it's wise to keep it simple. It may help to start with these basic questions:

How much do you project that you will sell?
What will you be charging for your products or services?
What will it cost to produce your products or deliver services?
What will be your basic operating expenses? Be sure to include recruitment and salaries here
How much financing do you need to run your business?
Answering these questions will help you determine your projected income and your expenses

A break-even analysis lets you show exactly what you need to sell to cover the costs of doing business. If you can attain and surpass your break-even point and easily bring in more than the amount of sales revenue you'll need to meet your expenses, you stand a good chance of making profits.