Marketing PlanThere are two major components to your marketing strategy:

how your enterprise will address the competitive marketplace how you will implement and support your day to day operations.

In today's very competitive marketplace a strategy that insures a consistent approach to offering your product or service in a way that will outsell the competition is critical. However, in concert with defining the marketing strategy you must also have a well defined methodology for the day to day process of implementing it. It is of little value to have a strategy if you lack either the resources or the expertise to implement it.

In the process of creating a marketing strategy you must consider many factors. Of those many factors, some are more important than others. Because each strategy must address some unique considerations, it is not reasonable to identify 'every' important factor at a generic level. However, many are common to all marketing strategies. Some of the more critical are described below.

You begin the creation of your strategy by deciding what the overall objective of your enterprise should be. In general this falls into one of four categories:

If the market is very attractive and your enterprise is one of the strongest in the industry you will want to invest your best resources in support of your offering.

If the market is very attractive but your enterprise is one of the weaker ones in the industry you must concentrate on strengthening the enterprise, using your offering as a stepping stone toward this objective.

If the market is not especially attractive, but your enterprise is one of the strongest in the industry then an effective marketing and sales effort for your offering will be good for generating near term profits.

If the market is not especially attractive and your enterprise is one of the weaker ones in the industry you should promote this offering only if it supports a more profitable part of your business (for instance, if this segment completes a product line range) or if it absorbs some of the overhead costs of a more profitable segment. Otherwise, you should determine the most cost effective way to divest your enterprise of this offering.

Having selected the direction most beneficial for the overall interests of the enterprise, the next step is to choose a strategy for the offering that will be most effective in the market. This means choosing one of the following 'generic' strategies (first described by Michael Porter in his work, Competitive Advantage).

A COST LEADERSHIP STRATEGY is based on the concept that you can produce and market a good quality product or service at a lower cost than your competitors. These low costs should translate to profit margins that are higher than the industry average. Some of the conditions that should exist to support a cost leadership strategy include an on-going availability of operating capital, good process engineering skills, close management of labor, products designed for ease of manufacturing and low cost distribution.

A DIFFERENTIATION STRATEGY is one of creating a product or service that is perceived as being unique "throughout the industry". The emphasis can be on brand image, proprietary technology, special features, superior service, a strong distributor network or other aspects that might be specific to your industry. This uniqueness should also translate to profit margins that are higher than the industry average. In addition, some of the conditions that should exist to support a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel, the ability to perform basic research and a good reputation.

A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more 'intense' form of either the cost leadership or differentiation strategy. It is designed to address a "focused" segment of the marketplace, product form or cost management process and is usually employed when it isn't appropriate to attempt an 'across the board' application of cost leadership or differentiation. It is based on the concept of serving a particular target in such an exceptional manner, that others cannot compete. Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition, profit margins can be very high.

PricingHaving defined the overall offering objective and selecting the generic strategy you must then decide on a variety of closely related operational strategies. One of these is how you will price the offering. A pricing strategy is mostly influenced by your requirement for net income and your objectives for long term market control. There are three basic strategies you can consider.

A SKIMMING STRATEGYIf your offering has enough differentiation to justify a high price and you desire quick cash and have minimal desires for significant market penetration and control, then you set your prices very high.

A MARKET PENETRATION STRATEGYIf near term income is not so critical and rapid market penetration for eventual market control is desired, then you set your prices very low.

A COMPARABLE PRICING STRATEGYIf you are not the market leader in your industry then the leaders will most likely have created a 'price expectation' in the minds of the marketplace. In this case you can price your offering comparably to those of your competitors.

PromotionTo sell an offering you must effectively promote and advertise it. There are two basic promotion strategies, PUSH and PULL.

The PUSH STRATEGY maximizes the use of all available channels of distribution to "push" the offering into the marketplace. This usually requires generous discounts to achieve the objective of giving the channels incentive to promote the offering, thus minimizing your need for advertising.

The PULL STRATEGY requires direct interface with the end user of the offering. Use of channels of distribution is minimized during the first stages of promotion and a major commitment to advertising is required. The objective is to "pull" the prospects into the various channel outlets creating a demand the channels cannot ignore.

There are many strategies for advertising an offering. Some of these include:

Product Comparison advertisingIn a market where your offering is one of several providing similar capabilities, if your offering stacks up well when comparing features then a product comparison ad can be beneficial.

Product Benefits advertisingWhen you want to promote your offering without comparison to competitors, the product benefits ad is the correct approach. This is especially beneficial when you have introduced a new approach to solving a user need and comparison to the old approaches is inappropriate.

Product Family advertisingIf your offering is part of a group or family of offerings that can be of benefit to the customer as a set, then the product family ad can be of benefit.

Corporate advertisingWhen you have a variety of offerings and your audience is fairly broad, it is often beneficial to promote your enterprise identity rather than a specific offering.

DistributionYou must also select the distribution method(s) you will use to get the offering into the hands of the customer. These include:

On-premise Sales involves the sale of your offering using a field sales organization that visits the prospect's facilities to make the sale.

Direct Sales involves the sale of your offering using a direct, in-house sales organization that does all selling through the Internet, telephone or mail order contact.

Wholesale Sales involves the sale of your offering using intermediaries or "middle-men" to distribute your product or service to the retailers.

Self-service Retail Sales involves the sale of your offering using self service retail methods of distribution. Full-service Retail Sales involves the sale of your offering through a full service retail distribution channel.

Of course, making a decision about pricing, promotion and distribution is heavily influenced by some key factors in the industry and marketplace. These factors should be analyzed initially to create the strategy and then regularly monitored for changes. If any of them change substantially the strategy should be reevaluated.

The EnvironmentEnvironmental factors positively or negatively impact the industry and the market growth potential of your product/service. Factors to consider include:

Government actions - Government actions (current or under consideration) can support or detract from your strategy. Consider subsidies, safety, efficacy and operational regulations, licensing requirements, materials access restrictions and price controls.

Demographic changes - Anticipated demographic changes may support or negatively impact the growth potential of your industry and market. This includes factors such as education, age, income and geographic location.

Emerging technology - Technological changes that are occurring may or may not favor the actions of your enterprise.

Cultural trends - Cultural changes such as fashion trends and life style trends may or may not support your offering's penetration of the market

The ProspectIt is essential to understand the market segment(s) as defined by the prospect characteristics you have selected as the target for your offering. Factors to consider include:

The potential for market penetration involves whether you are selling to past customers or a new prospect, how aware the prospects are of what you are offering, competition, growth rate of the industry and demographics.

The prospect's willingness to pay higher price because your offering provides a better solution to their problem.

The amount of time it will take the prospect to make a purchase decision is affected by the prospects confidence in your offering, the number and quality of competitive offerings, the number of people involved in the decision, the urgency of the need for your offering and the risk involved in making the purchase decision.

The prospect's willingness to pay for product value is determined by their knowledge of competitive pricing, their ability to pay and their need for characteristics such as quality, durability, reliability, ease of use, uniformity and dependability.

Likelihood of adoption by the prospect is based on the criticality of the prospect's need, their attitude about change, the significance of the benefits, barriers that exist to incorporating the offering into daily usage and the credibility of the offering.

The Product/ServiceYou should be thoroughly familiar with the factors that establish products/services as strong contenders in the marketplace. Factors to consider include:

Whether some or all of the technology for the offering is proprietary to the enterprise. The benefits the prospect will derive from use of the offering. The extent to which the offering is differentiated from the competition. The extent to which common introduction problems can be avoided such as lack of adherence to industry

standards, unavailability of materials, poor quality control, regulatory problems and the inability to explain the benefits of the offering to the prospect.

The potential for product obsolescence as affected by the enterprise's commitment to product development, the product's proximity to physical limits, the ongoing potential for product improvements, the ability of the enterprise to react to technological change and the likelihood of substitute solutions to the prospect's needs.

Impact on customer's business as measured by costs of trying out your offering, how quickly the customer can realize a return from their investment in your offering, how disruptive the introduction of your offering is to the customer's operations and the costs to switch to your offering.

The complexity of your offering as measured by the existence of standard interfaces, difficulty of installation, number of options, requirement for support devices, training and technical support and the requirement for complementary product interface.

The CompetitionIt is essential to know who the competition is and to understand their strengths and weaknesses. Factors to consider include:

Each of your competitor's experience, staying power, market position, strength, predictability and freedom to abandon the market must be evaluated.

Your EnterpriseAn honest appraisal of the strength of your enterprise is a critical factor in the development of your strategy. Factors to consider include:

Enterprise capacity to be leader in low-cost production considering cost control infrastructure, cost of materials, economies of scale, management skills, availability of personnel and compatibility of manufacturing resources with offering requirements.

The enterprise's ability to construct entry barriers to competition such as the creation of high switching costs, gaining substantial benefit from economies of scale, exclusive access to or clogging of distribution channels and the ability to clearly differentiate your offering from the competition.

The enterprise's ability to sustain its market position is determined by the potential for competitive imitation, resistance to inflation, ability to maintain high prices, the potential for product obsolescence and the 'learning curve' faced by the prospect.

The prominence of the enterprise. The competence of the management team. The adequacy of the enterprise's infrastructure in terms of organization, recruiting capabilities, employee

benefit programs, customer support facilities and logistical capabilities. The freedom of the enterprise to make critical business decisions without undue influence from distributors,

suppliers, unions, creditors, investors and other outside influences. Freedom from having to deal with legal problems.

DevelopmentA review of the strength and viability of the product/service development program will heavily influence the direction of your strategy. Factors to consider include:

The strength of the development manager including experience with personnel management, current and new technologies, complex projects and the equipment and tools used by the development personnel.

Personnel who understand the relevant technologies and are able to perform the tasks necessary to meet the development objectives.

Adequacy and appropriateness of the development tools and equipment. The necessary funding to achieve the development objectives. Design specifications that are manageable.

ProductionYou should review your enterprise's production organization with respect to their ability to cost effectively produce products/services. The following factors are considered:

The strength of production manager including experience with personnel management, current and new technologies, complex projects and the equipment and tools used by the manufacturing personnel.

Economies of scale allowing the sharing of operations, sharing of production and the potential for vertical integration.

Technology and production experience The necessary production personnel skill level and/or the enterprise's ability to hire or train qualified

personnel. The ability of the enterprise to limit suppliers bargaining power. The ability of the enterprise to control the quality of raw materials and production. Adequate access to raw materials and sub-assembly production.

Marketing and SalesThe marketing and sales organization is analyzed for its strengths and current activities. Factors to consider include:

Experience of Marketing/Sales manager including contacts in the industry (prospects, distribution channels, media), familiarity with advertising and promotion, personal selling capabilities, general management skills and a history of profit and loss responsibilities.

The ability to generate good publicity as measured by past successes, contacts in the press, quality of promotional literature and market education capabilities.

Sales promotion techniques such as trade allowances, special pricing and contests. The effectiveness of your distribution channels as measured by history of relations, the extent of channel

utilization, financial stability, reputation, access to prospects and familiarity with your offering. Advertising capabilities including media relationships, advertising budget, past experience, how easily the

offering can be advertised and commitment to advertising. Sales capabilities including availability of personnel, quality of personnel, location of sales outlets, ability

to generate sales leads, relationship with distributors, ability to demonstrate the benefits of the offering and necessary sales support capabilities.

The appropriateness of the pricing of your offering as it relates to competition, price sensitivity of the prospect, prospect's familiarity with the offering and the current market life cycle stage.

Customer ServicesThe strength of the customer service function has a strong influence on long term market success. Factors to consider include:

Experience of the Customer Service manager in the areas of similar offerings and customers, quality control, technical support, product documentation, sales and marketing.

The availability of technical support to service your offering after it is purchased. One or more factors that causes your customer support to stand out as unique in the eyes of the customer. Accessibility of service outlets for the customer. The reputation of the enterprise for customer service.

ConclusionAfter defining your strategy you must use the information you have gathered to determine whether this strategy will achieve the objective of making your enterprise competitive in the marketplace. Two of the most important assessments are described below.

Cost To Enter MarketThis is an analysis of the factors that will influence your costs to achieve significant market penetration. Factors to consider include:

Your marketing strength.

Access to low cost materials and effective production. The experience of your enterprise. The complexity of introduction problems such as lack of adherence to industry standards, unavailability of

materials, poor quality control, regulatory problems and the inability to explain the benefits of the offering to the prospect.

The effectiveness of the enterprise infrastructure in terms of organization, recruiting capabilities, employee benefit programs, customer support facilities and logistical capabilities.

Distribution effectiveness as measured by history of relations, the extent of channel utilization, financial stability, reputation, access to prospects and familiarity with your offering.

Technological efforts likely to be successful as measured by the strength of the development organization. The availability of adequate operating capital.

Profit PotentialThis is an analysis of the factors that could influence the potential for generating and maintaining profits over an extended period. Factors to consider include:

Potential for competitive retaliation is based on the competitors resources, commitment to the industry, cash position and predictability as well as the status of the market.

The enterprise's ability to construct entry barriers to competition such as the creation of high switching costs, gaining substantial benefit from economies of scale, exclusive access to or clogging of distribution channels and the ability to clearly differentiate your offering from the competition.

The intensity of competitive rivalry as measured by the size and number of competitors, limitations on exiting the market, differentiation between offerings and the rapidity of market growth.

The ability of the enterprise to limit suppliers bargaining power. The enterprise's ability to sustain its market position is determined by the potential for competitive

imitation, resistance to inflation, ability to maintain high prices, the potential for product obsolescence and the 'learning curve' faced by the prospect.

The availability of substitute solutions to the prospect's need. The prospect's bargaining power as measured by the ease of switching to an alternative, the cost to look at

alternatives, the cost of the offering, the differentiation between your offering and the competition and the degree of the prospect's need.

Market potential for new products considering market growth, prospect's need for your offering, the benefits of the offering, the number of barriers to immediate use, the credibility of the offering and the impact on the customer's daily operations.

The freedom of the enterprise to make critical business decisions without undue influence from distributors, suppliers, unions, investors and other outside influences

Executive summary Industry analyses

- SWOT: strengths, weaknesses, opportunities and threats- Porter 5 forces analysis: customers; your own company; current and future competitors; suppliers; and the regulatory environment.

The target market- Target market demographics: income levels; interests; activities; living environment; other geographic descriptions; psychological mindsets; political affiliations; family situations; age ranges; tastes; etc.- Industry or societal trends that affect your customers.- Your target customers' needs and wants, and corresponding product benefits.

Marketing strategy- Overall objectives and mission statement- Positioning relative to competitors and in eyes of customers- General strategies to reach objectives and fulfill mission- Marketing mix, including specific marketing programs     - Products     - Pricing strategies     - Distribution channels     - Promotions, advertising and other marketing programs

Forecasts- Size of target market and growth projections.- Sales growth projections.

Financial analysis- Pro forma profit and loss (P&L) for each product and in total: sales forecasts, cost of goods, marketing budgets, fixed overhead and variable expense projections, profit margins- Breakeven analysis- "What-if" scenarios (sensitivity analysis)

Measurements- Measurable goals and success metrics for each program- Intermediate measurements for monitoring progress

Five Steps To Creating Marketing Plan

The Marketing Plan is a highly detailed, heavily researched and, hopefully, well written report that many inside and possibly outside the organization will evaluate. It is an essential document for both large corporate marketing departments and for startup companies. Essentially the Marketing Plan:

forces the marketing personnel to look internally in order to fully understand the results of past marketing decisions. forces the marketing personnel to look externally in order to fully understand the market in which they operate.

sets future goals and provides direction for future marketing efforts that everyone within the organization should understand and support. is a key component in obtaining funding to pursue new initiatives.

The Marketing Plan is generally undertaken for one of the following reasons:

1. Needed as part of the yearly planning process within the marketing functional area. 2. Needed for a specialized strategy to introduce something new, such as new product planning, entering new markets, or trying a new strategy to fix an existing problem. 3. Is a component within an overall business plan, such as a new business proposal to the financial community.

There are many ways to develop and format a marketing plan. The approach taken here is to present a 6-Part plan that includes:

1. Purpose and Mission 2. Situational Analysis 3. Marketing Strategy and Objectives 4. Tactical Programs 5. Budgets, Performance Analysis and Implementation 6. Additional Consideration

This plan is aimed at individual products and product lines, however, it can be adapted fairly easily for use in planning one or more strategic business units (SBU). The page length suggested for each section represents a single-spaced typed format for a plan focused on a single product. Obviously for multi-product plans lengths will be somewhat longer.

It is assumed that anyone developing a Marketing Plan possesses a working understanding of marketing principles. If you do not, it is suggested you spend considerable time learning about basic marketing through the previous sections of the

Note, throughout the plan the word "product" is used. However, the information presented in the Marketing Plan tutorials applies to both products and services

Part 1 of the plan is designed to provide the reader with the necessary information to fully understand the purpose of the marketing plan. This part also includes organizational background information, which may be particularly important if the audience for the plan is not familiar with the company, such as potential financial backers. Some of the information, in particular the mission statement, may require the input of upper-management. The information in this part will prove useful later in the plan as a point of reference for material that will be introduced (e.g., may help explain pricing decisions). In cases in which there are separately operated divisions or SBU, there may also be mission statements for each. (Length: one page or less)

1. Purpose of the Marketing Plan Offer brief explanation for why this plan was produced

o e.g., introduce new product, enter new markets, continue growth of existing product, yearly review and planning document, etc.

Suggest what may be done with the information contained in the plan o e.g., set targets to be achieved in the next year, represents a departmental report to be included in larger business or strategic plan, etc.

2. Mission Statement

For larger firms this may already exist in a public way (e.g., found in annual report, found on corporate website) but for many others this may need to be formulated. The mission statement consists of a short, finely-honed paragraph that considers the following issues:

Identifies a stable (i.e., not dramatically changing every year), long-run vision of the organization that can answer such questions as:

o Why is the company in business? o What markets do we serve and why do we serve these markets? o In general terms, what are the main benefits we offer our customers?

e.g., a low price software provider may state they offer “practical and highly affordable business solutions”

o What does this company want to be known for? o What is the company out to prove to the industry, customers, partners, employees, etc.? o What is the general corporate philosophy for doing business? o What products/services does the company offer?

In developing the vision presented in the mission statement consider: o Company History

How company started and major events of the company, products, markets served, etc. o Resources and Competencies

Consider what the company currently possesses by answering the following: What are we good at? What is special about us compared to current and future competitors (in general terms do not need to mention names)? What do we do that gives us a competitive advantage?

Consider the questions above in term of: people, products, financial position, technical and research capabilities, partnership/supply chain relations, others

o Environment

Consider the conditions in which company operates including: physical (e.g., facilities), equipment, political regulatory, competitive, economic, technological, others

Part 2: Situational Analysis

The situational analysis is designed to take a snapshot of where things stand at the time the plan is presented. This part of the Marketing Plan is extremely important and quite time consuming. For many, finding the numbers may be difficult, especially for those entering new marketsThe situational analysis covers six key areas: product, target market, distribution, competitors, financial and other issues.

1. Current Product Analysis

May be able to skip this section if plan is for a new product and no related products exist. Provide detailed analysis of the company’s product(s). (Length: 1-2 pages).

Describe the company’s current product(s) offerings in terms of: o Product Attributes

Describe the main product features, major benefits received by those using the product, current branding strategies, etc.

o Pricing

Describe pricing used at all distribution levels such as pricing to final users and to distributors, incentives offered, discounts, etc.

o Distribution

Describe how the product is made accessible to final users including channels used, major benefits received by distributors, how product is shipped, process for handling orders, etc.

o Promotion

Describe promotional programs and strategies in terms of advertising, sales promotion, personal selling and public relations, how product is currently positioned in the market, etc.

o Services Offered

Describe support services provided to final users and distributors before, during and after the sale

2.Target Market Analysis

Examine in detail the company’s current target market(s). Obviously to do this section correctly takes a great deal of customer-focused research. (Length: 2-3 pages).

Describe the target market approach: o What general strategy is used to reach targeted customers? Generally approaches include:

mass market – aim to sell to a large broad market segmentation approach – aim to selectively target one (niche) or more markets

Describe demographic/psychographic profile of the market: o Profile criteria may include:

gender, income, age, occupation, education, family life cycle, geographic region, lifestyle, attitudes, purchasing characteristics, etc.

Describe the following characteristics of targeted customers: o Needs/benefits sought by market o Product usage

Consider answers to these questions related to customers using the product such as: who is using the product? why do they use the product? when do they use the product? how is the product used?

o Product positioning

Evaluate how customers perceive the product in relation to competitor’s products or to other solutions they use to solve their problems

o Attitudes

What is the target market’s attitude regarding the company’s product? What is the target market’s attitude regarding the general product category?

i.e., exam the general attitude regarding how products from all companies serve the target market’s needs

Describe the purchasing process: o How does the target market make their purchase?

What does the decision-making process involve? What sources of information are sought? What is a timeline for a purchase (e.g., impulse vs. extended decision-making)?

o Who makes the purchase?

Does user purchase or is other party responsible (e.g., parent purchasing for children)? o Who or what may influence the purchase?

Provide market size estimates: o Keep in mind these are estimates for the market not for a specific product

Provide size estimates for the potential market

What is the largest possible market if all buy? Provide estimates of size for the current target market

What percent of the potential market actually purchased? Provide estimates of future growth rates

At least through the timeframe for the plan (e.g., 1 year) but most likely longer (e.g., 3-5 year projections)

3. Describe Current Distributor Network

This may not apply if company does not use distributors.Evaluate how the company’s product(s) is distributed. Clearly marketing plans for a service company may not have much detail here but this section will most likely have some relevance even for service firms (e.g., package delivery services, online legal service, etc,). (Length: 2 pages).

Describe the channels/supply chain employed to sell and deliver the product: (Note: internal sales force discussion should appear under company promotion in Current Product Analysis above.)

o Options may include:

direct to customer indirect via a distributor combination of both

What are the needs/benefits sought by distributors? Describe the product’s role within the distributor network:

o How is this product used within the distributor’s business? o How important is product within the distributor’s strategy? o How is product positioned?

e.g., how does distributor view product in relation to competition o Attitudes and perceptions about company's product(s)

Purchase process o How does distributor network make their purchase? o Who or what influence distributor’s purchases?

Demographics o Who makes up the distributor network?

types size geographic region markets served

4. Competitor Analysis

Examine the main competitors serving the same target market. For much more detail on analyzing competitors see .This section may also benefit from the use of comparison tables. (Length: 3-4 pages).

Describe direct competitors in terms of: o Target markets served o Product attributes o Pricing o Promotion o Distribution including the distributor network

o Services offered

Discuss competitor’s strengths and weaknesses: o May need to consider much more than just marketing issues such as:

financial standing target market perception R & D capabilities

Discuss competitive trends: o May need to include discussion of future competitive threats

5. Financial Analysis for Product or Product Line

Much of this information can be handled within a graphical format, such as tables and graphs, though a paragraph explanation of each is generally required. Make sure to include total dollar (or other currency) amounts as well as percentage market share. For more detailed marketing plans or for plans for seasonal products, providing monthly or even weekly sales figures may be required. Provide a spreadsheet-style layout showing detailed breakdown of marketing revenues and expenses. (Length: 2-4 pages).

Current Sales Analysis o Overall industry sales and market share (for at least the last year)

total market sales total for company’s product(s) total for competition

o By segments/product categories

total for segments/product categories total for company’s product(s) total for competition

o By Channels of Distribution

total for each channel total for company’s product(s) by channel total for competition by channel

o By Geographic Region

total for each region total for company’s product(s) by region total for competition by region

Profitability Analysis o Revenues

For highly detailed plans break out into categories as shown above in the Current Sales Analysis section.

o Marketing Expenses

Types: Direct – those expenses that can be tied to the product Indirect or Proportional – generally administrative or broad marketing expenses that may be assigned to a product based on some established criteria (e.g., a product’s percentage of overall company sales) Note: not all companies follow this approach

For highly detailed plans break out into categories as shown above in the Current Sales Analysis section.

6. Environmental Problems and Opportunities

Describe trends, events, conditions that are external (usually uncontrolled by the company) that may impact the company’s product(s) or the market. (Length: 1-2 pages)

Areas of consideration: o social and cultural o demographic o economic o technological o political o legal, regulatory, ethical

7. Product/Market Analysis Tools

In an effort to provide an easy to visualize summary of the product(s) consider using one or more of the following commonly used product/market analysis tools. (Length: 1 page)

Product Life Cycle Analysis Boston Consulting Group Growth/Share Matrix General Electric Market Attractiveness Matrix

8. Summary of Current Situation

Summarize all information in the Situational Analysis. (Length: 1 page)

Provide a SWOT analysis for the company’s product(s) that includes: o strengths o weaknesses o opportunities o threats

Part 3: Marketing Strategy and ObjectivesThose reading a marketing plan need a clear picture of the direction the product will take. Also, they want to see that some accountability has been built into the plan so that the plan is not just fluff but results in measurable actions. The best way to provide this information is through a section devoted to identifying the key strategies and objectives for the product(s).

This section consists of three major issues:

Marketing Strategy Financial Objectives Marketing Objectives

. Identify Marketing Strategy

In this section identify the general marketing strategy under which this plan is being developed. It is very possible that a product will follow more than one strategy (e.g., sell more of same product to current customers but also find new customers in new markets). Plan developers may get some guidance and also rationale for strategy by examining results from the Situational Analysis. In particular, planners may look to strategies that are suggested within the scope of Product/Market Analysis Tools.

Additionally, planners should refer to the Mission Statement in Step 1 to insure strategies are in line with how the company views itself. (Page length: less than 1 page)

Strategies generally fall under one of the following (or in some cases more than one) ideas:

Market growth (see ansoff matrix) o Higher market penetration

Sell more to same market (i.e., get current customers to buy more or buy more frequently) If overall market is growing this may not necessarily mean a growth in overall market share If overall market is not growing this means a growth in overall market share

o Find new markets

Sell to markets or market segments not previously targetedo Develop new products for existing customers o Develop new products for new customers

Market stability o Techniques to keep the status quo

Primarily used in times of economic decline or market decline Generally requires the taking of market share from others in the industry

Cost control o Techniques to contain costs or operate more effectively

Can work in combination with market growth or market stability Market exit 1. Techniques to depart a market

2. Determine Financial Objectives

For many organizations the ultimate goal of the marketing plan is the effect it will have on the bottom line. Measures reflect income statement items and common ratios. (Page length: less than 1 page)

Customer sales o by volume and growth percentage o by segments

Channel sales o by volume and growth percentage o by channel

Margins Profitability Ratios

o use common financial ratios and other metrics associated with marketing in the industry

3. Determine Marketing Objectives

Marketing success can be measured on several non-financial market metrics. These measure are important since these often shed light on underlying conditions and circumstances facing the company that are not easily seen within financial measures. For instance, a company may report strong sales for a product but market share information may suggest the product is losing ground to competitors. The marketing objectives section will indicate targets to be achieved across several marketing decision areas. To add additional strength to this section include marketing metrics where possible. (Page length: less than 1 page)

Target market objectives o market share

total by segments by channel

o customers

total number/percentage new number/percentage retained

o purchases

rate of purchases size/volume of purchases

Promotional objectives o level of brand/company awareness o traffic building

(e.g., store traffic, website traffic) o product trials

(e.g. sales promotions, product demonstrations)o sales force

(e.g. cycle time, cost per call, closing rate, customer visits, etc.) Channel objectives

o dealers

total number/percentage new number/percentage retained

o order processing and delivery

on-time rate shrinkage rate correct order rate

Market research objectives o studies initiated o studies completed

R&D objectives o product development

Other objectives o partnerships developed

Part 4: Tactical Marketing Programs

This is the heart of the marketing plan. It contains descriptions of detailed tactics to be carried out to achieve the objectives and goals established in Step 3. It is typically the longest section of the plan, often representing 50% or more of total page count.

In this section details and timetables are presented for six key decision areas:

Target Markets

Product Promotion Pricing Distribution Other Areas

Preferably this section includes a brief summary of current marketing decisions (see Situational Analysis) so readers of the plan can easily compare what was planned to what is planned.

1. Target Market Tactics

If the target market remains the same as what was identified in the Situational Analysis then identifying the market will be relatively easy though justification for continuing with this market is required. For new markets a more detailed discussion is needed. This section also includes the sales forecast which is the driving force for all financial forecasts. Depending on the depth of detail sought in the marketing plan, it may be a good idea to include likelihood scenarios, such as best case, worst case, and probable case, when developing the sales forecast. (Length: 1-2 pages)

Target market description: o Brief summary of current target market o Identify planned changes:

Summarize changes: Describe using profile (e.g., demographic, psychographic, behavioral, etc. ) Describe how it will be accomplished

Justify planned changes: Due to results Due to research Due to competition Others

Describe target market tactics: Objectives Methods used change target market Profile the target marketing

Product positioning: o Brief summary of product postition

How does target market view product in relation to competitor’s products? o Identify planned changes:

Summarize changes in product positioning Justify planned changes:

Due to results Due to research Due to competition Others

o Describe tactics to carryout changes

Objectives e.g. what is desired position?

Methods used to change position Sales forecast for each product:

o Brief summary of current sales o Identify changes

Summarize changes in forecast Justify forecast (i.e., figures determined based on what information?)

o Describe forecast

Objectives Methods used to carry out Numerical estimates

Categories: Total By segment(s) By distribution channel Others

consider likelihood scenario analysis

2. Product Tactics

In this section discuss the decisions to be made for existing or new products and services. Make sure to consider all aspects of product decisions (branding, labeling, packaging) and not just the product itself. Also, keep in mind product decisions can also impact distributors (e.g., distributor’s response to packaging used to ship the product). (Length: 1-3 pages)

o Brief summary of current product decisions for users and distributors in terms of:

General description e.g., category of product, product line information

Features/attributes offered list key features main benefits target market receives

Branding Packaging Labeling

o Identify planned changes:

Summarize changes For new products

How was product developed? Stage in development process

Timetable for availability Justify changes:

Due to results Due to research Due to competition Others

o Describe planned changes:

Identify changes directed to the targeted user market: Objectives:

e.g., modify existing products, extend existing product line, develop new products, develop new uses/benefits for existing products, delete current product, etc.

Features/attributes offered Branding Packaging Labeling

Identify changes to the distributor network: Objectives:

e.g., improve distribution, improve protection, lower cost of handling, gain distribution, etc.

Features/attributes offered Branding Packaging Labeling

3. Promotion Tactics

Describe the decisions related to how the product will be promoted. In general, promotion consists of four major areas – advertising, sales promotion, public relations and personal selling – though not all may be used. Timetables for promotion are important since certain types of promotions (e.g., magazine ads, trade shows) require long lead times. Most information in this section can be shown in tables and graphs. Each of the four promotion areas is separated out, however, some planners find it easier to combine the areas. For instance, the promotional areas could be combined within special promotion programs, such as Holiday Promotion Program, Summer Promotion Program, etc. (Length: 1-4 pages)

Brief summary of current promotional decisions for users and distributors in terms of: o General description for four promotional areas:

advertising sales promotion personal selling public relations

o Message/theme o Methods used:

Summarize methods used Summarize spending for each method

o Interrelation of four promotional areas

e.g., explain how advertising supports sales promotion Identify planned changes:

o Summarize changes o Justify changes:

Due to results Due to research Due to competition Others

Describe planned changes: o Identify changes directed to the targeted user market:

General description for four promotional areas: Objectives

Advertising - e.g., build general awareness/inquiries/traffic, encourage product trial, shift awareness (e.g., change attitude), response to competitor promotion, increase use or purchase rate, support other market decisions (e.g., support sales force), general corporate/product image building, etc. Sales promotion - e.g., build inquires, increase product trial, encourage repurchase, build traffic, support other promotions Personal selling - e.g., new account development, account support/maintenance, increase product trial, encourage purchase/repurchase, build traffic, support other promotions Public relations - e.g., build general awareness/inquiries/traffic, encourage product trial, shift awareness (e.g., change attitude), respond to negative news/perception, image building, prepare markets for future activity (e.g., new product)

Methods and message: type and media used: e.g., ad type (e.g., television spots, Internet banner ads, roadside billboards, direct mail, etc.) , sales promotion type (e.g., coupons, demonstrations, etc.), selling type (e.g., sales force, call center), pr type (e.g., press release, pitch to magazines, etc.) message conveyed

Spending and timetables total sub-divided by:

type e.g., ad spending, sales force compensation

media used targeted users

o Identify planned changes directed to the distributor network:

General description Objectives

Advertising - e.g., build general awareness/inquiries, encourage product handling, shift awareness (e.g., change attitude), response to competitor promotion, increase purchase rate, support other market decisions (e.g., support sales force), general corporate/product image building, etc. Sales promotion - e.g., build inquires, encouraging inventory building, support other promotions, encourage handling of new products, obtain distributor assistance Personal Selling - e.g., new account development, account support/maintenance, encourage purchase/repurchase/inventory building Public Relations - e.g., build general awareness/inquiries/traffic, encourage distribution trial, shift awareness (e.g., change attitude), respond to negative news/perception, image building, prepare markets for future activity (e.g., new product)

Methods and message type and media message conveyed

Spending and timetables total sub-divided by:

type media used targeted distributor network

4. Distribution Tactics

This marketing tactics section lays out the distribution plan for the product or service. Distribution is a broad concept that includes all activities and entities (e.g., value chain partners) responsible for getting the product or service to the customer. Distribution costs can represent a high portion of the overall cost of the product so an efficient distribution system may be critical for marketing success. (Length: 1-3 pages)

Brief summary of current distribution network/value chain decisions: o Types of channels used

direct - e.g., direct via sales force, Internet, etc. indirect - e.g., retailers, wholesalers, agents combination

o Level of market coverage

intensive - e.g., mass availability selective - e.g., wide availability exclusive - e.g., restricted availability

o Outlets handling product

types number/level of penetration geographic location

o Perceived product positioning

in relation to competitors o Distribution costs

Identify planned changes: o Summarize changes o Justify changes:

Due to results Due to research Due to competition Others

Describe planned changes: o Objectives

e.g., account development, gain distributor support, account maintenance, account penetration o Types of channels employed o Level of market coverage o Outlets handling product o Product positioning o Distribution costs

5. Pricing Tactics

Pricing decisions can be a complicated undertaking that requires knowledge of the market, competitors, economic conditions and, of course, customers. For this section it is not necessary to provide extensive financial evaluation of the pricing decision since most of this will take place in Part 5 Budgeting and Implementation, however, the use of tables and graphs may be helpful in showing pricing trends and pricing decisions within various categories. (Length: 1-2 pages)

Brief summary of current pricing decisions: o Describe pricing decisions by:

model/product segment channel geography other

o Adjustments and Allowances

Discounting Payment terms

Identify planned changes o Summarize changes o Justify changes:

Due to results Due to research Due to competition Other

Describe planned changes: o Objectives

e.g., return on investment, market share, profit level, price leadership, match competition, etc. o Factors affecting price setting

Cost factors Fixed costs to be covered Variable costs

Customer expectations Company expectations

e.g., margins, ROI Demand Considerations

market elasticity position on product life cycle

Competition Economic conditions Legal/regulatory considerations

o Pricing Options

list, preferred or suggest pricing adjustments and allowances sub-divided by:

product/model customer channel other

6. Other Tactics

These may be optional.) In this section include a discussion of other marketing decision areas. Two additional areas – customer support service and marketing research – are provided though it is possible others exist. (Length: 1 page or less)

Customer Support Services o Brief summary of current customer support services decisions:

types offered: e.g. call center, online, service desk, walk-up, on-site

customers being serviced: e.g., current customers, potential customers, distributor network

service delivery method: e.g., internally managed, contracted, partnership arrangement

o Identify planned changes

Summarize changes Justify changes:

Due to results Due to research Due to competition Other

o Describe planned changes

Objectives e.g., availability, response time, satisfaction level

Types offered Customers being serviced Service delivery method Spending and timetables

Part 5: Budgeting, Performance Analysis and Implementation

In many ways this part of the marketing plan is the area that will ultimately “sell” the plan to those who have the power to give final approval. This step consists of three key topics:

Marketing Budget - presents a clear picture of the financial implications of the plan Performance Analysis - presents the expected results of the plan including its financial impact Implementation Schedule - shows timelines and identify those responsible for performing tasks

1. The Marketing Budget

This section should lay out spending requirements necessary for meeting the plan’s objectives. It is expected that several tables and graphs will be presented along with narratives explaining important budget issues. (Length: 2-3 pages)

Outline spending requirements for each tactical marketing decision o Breakdown each tactical category

e.g., types of advertising, types of services offered, marketing research expense, etc. o Show detailed spending timetable by:

Month Year

o Show spending by:

Product (if plan is for more than one) Segment/Geographic area Distribution Network/Channel

2. Performance Analysis

This section should contain financial implications of the plan in terms of contributions to the company’s bottom line. HOWEVER, as was stated in the beginning of the Marketing Plan tutorial, the marketing plan is generally a component of a larger business plan. We do not cover a full financial discussion such as a full balance sheet, income statement, detailed ratio analysis, etc., though these could be included if necessary. Again, numerous tables and graphs should be presented. (Length: 2-3 pages)

Marketing Contribution o Show revenue versus expenses for marketing decisions

Revenue should follow sales forecasts (see Part 4) Show expenses by category (e.g., advertising) and sub-category (e.g., types of advertising)

o Breakdown by:

Product Segment/Geographic area Distribution Network/Channel

Breakeven Analysis: o Primarily for plans that involve the sale of tangible products, the breakeven analysis indicates the level of sales (generally described in terms of number of units sold) required before the company realizes positive marketing contribution. o Requires understanding of:

Fixed costs – cost that occur no matter level of sales Variable costs – cost that may change as level of sales varies

o Present as both graph and chart

Show breakeven point over level of sales volume From zero through best scenario sales level

Show breakeven over time Ratio Analysis

o Limit to important marketing ratios that are common to the industry

e.g., sales cycle, advertising-to-sales, conversions from trial to purchase, website traffic-to-search engine marketing, etc.

3. Implementation Plan

Provide a discussion of how and by whom the plan will be carried out. (Length: 1-2 pages)

Detailed schedule of tasks and those responsible: o Breakdown by important tactical marketing decisions

Best presented in a Gantt chart format. o Identify those responsible for each important task:

If unsure leave generic e.g., advertising agency, web hosting company, distributors, etc.

Part 6: Additional Considerations

The final major section in the Marketing Plan prepares the reader for potential situations that may affect the plan. In this way the reader is provided with a somewhat more balanced picture of what the company may face as it attempts to implement the plan. (Length: 2-3 pages)

1. Internal Factors

Discuss company factors that may affect the plan o e.g., loss of funding sources, loss of key personnel, current plan is linked to success to other products that may not reach their goals, production problems, etc.

2. External Factors Discuss outside factors that may affect the plan

o e.g., supply chain problems, competitor reaction, technological developments, legal environment, societal changes, economic issues, governmental concerns, etc.

3. Research Limitations

Discuss problems that may exist with the research information on which assumptions are being made o e.g., difficult to find solid data on a certain subject