Why Every Business Needs a Marketing Plan

A marketing plan is an absolutely essential planning tool for any business – no matter what size or type. But you’ve probably heard that many times before and, as you are reading this, possibly still haven’t got around to writing one - so please read on………

The big benefits of having a marketing plan surround these key words – reference, control, action and sales.

Reference: the marketing plan acts as a reference point for all your marketing and sales activities during the year. How many times have you been asked whether you want to advertise in a journal or web site or maybe to take on a new product? Refer to your marketing plan and ensure your short term actions fit into the longer term strategy.

Control: the plan helps you to control all your marketing activities and, most importantly, your marketing budget. It ensures the money you have set aside to promote your business and generate sales leads is being spent in the most cost effective manner and makes a positive difference to the revenue line.

Action: the marketing plan provides you with the discipline to make sure you carry out all the actions required to meet your sales and profit targets. Actions are more likely to happen when they are written down, assigned to individuals, have a measurable objective and a time target.

Sales: meeting your sales expectations depends heavily on good and effective marketing. Good and effective marketing is more likely to happen if you have a marketing plan in place.

Developing your Marketing Plan

This article will set you on your way to developing your marketing plan but it is impossible to cover every point. However, I hope it gives you some practical help to start the process.

1. Defining your Marketing Objectives

The first stage in your planning process is to define your key marketing objectives. You need to do this in order to develop a sensible and cost effective plan as the purpose of the plan is to help you achieve those objectives. Your marketing objectives identify what you are aiming to achieve, rather than how.

So typical examples may include:

• increase 2006 sales by 10%
• improve average gross margin in first half of 2006 by 1%
• launch two new products by October
• buy a competitor by the end of the year to increase market share
• reduce average delivery lead time to 24 hours by June 30

A quick couple of points about the objectives. Firstly, there should be at least one financial target in your objectives relating to sales or profit which ties in with your overall business objectives. Secondly, you need to be able to measure your marketing objectives, they should be achievable and there needs to be a target date for completion with responsibility assigned to an individual.

2. Review your Market and your Business

You now have your objectives but before you start to write your plan you need to spend time to identify some basic facts about the market in which you operate and how your business stacks up against the competition.

The key areas you need to think about, with a couple of examples of the type of information you need, are:

• Competitors - who are they, what are they good at, how do they perform.
• Customers - description and profile of your current customers and potential customers, sales and profit analysis by customer, what do they think of you.
• Product/service range – benefits of your range, comparison to the competition, sales and profit analysis by product group.
• Market trends – is the market growing, static or in decline. Are there new regulations coming into force.
• What your business does well and where it needs to improve. This should include sales team, head office staff, company image, customer service, communications, after sales and distribution

The main point here is to bring together all your knowledge in one place and write it down. The depth of analysis depends on the size and complexity of your business – if you’ve never done this before and your business is fairly straightforward then you can make a good start by just writing down everything you carry around in your head without any extra research. To do a detailed job will require more time and analysis and ideally a number of interviews with customers.

A common technique (but not essential) to bring all this information together is to carry out an analysis of strengths, weaknesses, opportunities and threats (usually referred to as SWOT). It’s a good way of summarising all the information you have on the market and your business in a couple of pages.

You will use this information to develop your marketing strategy in the next stage and help identify the best activities for your marketing plan.

3. Develop your Marketing Strategy

Stage 3 is about ensuring you have a clear marketing strategy in place. Typically a marketing strategy will not change from year to year but will have a 3 – 5 year horizon. This is different to the marketing plan which will need updating each year.

The strategy stage sometimes puts people off developing the marketing plan but it can be made fairly straightforward. I’ve written marketing strategies with clients that took less than an hour and fitted onto a side of A4. If you’ve never had a strategy before then that would be a good start. At the other extreme I’ve worked for 6 months on developing a marketing strategy. Again it depends a lot on the size and complexity of the business and the market and how quickly it is changing.

However simple or complicated your marketing strategy the most important thing is that you have one - you must write your marketing plan in the context of your overall marketing strategy and objectives.

Very briefly, a marketing strategy should contain, at the very least, your plans for these elements:

• Brand image - how you want to be perceived by your customers
• Customers – a description of your target customer
• Market – which part of the market do you want to sell to
• Competitors - who are you planning to take share from
• Product or service range – current and planned
• Competitive edge – why customers buy from you

The facts and figures you gathered in the previous stage will form the building blocks for your marketing strategy. You also need to look at a number of options for each of the bullet points above. Try talking through different scenarios and assessing a number of different options for each of these elements eg image, customers, product range. Don’t necessarily stick with what you’ve got or just follow the competition.

4. Write your Marketing Plan

You can now develop a marketing plan which will make sure your strategy is implemented and your marketing and business objectives are met. Let me just make sure you are clear on the purpose of the plan – what the plan does is to identify short and medium term actions to help implement the strategy and achieve your objectives.

As I said before, although your strategy will not change from year to year your marketing plan will. This is because you learn more about what works and what doesn’t work, products change, the market moves, financial targets change and new communications techniques become available.

The Marketing Plan can be split into different sections as follows:

• Communications / advertising
• Promotions
• Pricing
• Customer service
• Products
• Route to market / sales structure
• Budget

You do not necessarily need actions on every aspect of this. Quite often marketing plans will focus on the communications, promotions and budget only and this is perfectly adequate in many businesses. However, if you are planning changes in the sales team or pricing structure or product range, for example, then it would be wise to develop a plan to make this change happen in an effective manner.

For every activity highlighted within the plan you should identify:

• the objective
• what you are going to do (briefly!)
• who is responsible for it
• the budget allocated, if any
• the timing

The plan should be developed in conjunction with the people who will be responsible for its delivery to ensure they buy into the objectives and timescales.

5. Review the Plan

Make sure you review your plan during the year and assess how it is performing. This should be at least once every 6 months and ideally once a quarter.

Check whether the activities are working and the objectives are being met. If they are not, then by reviewing part way through the year it gives you time to do something about it. You can reallocate scare resources (ie time and money) to those activities that are working and reduce the time and money spent on activities that are not working. By building in a regular review it ensures the plan is a “live” document and does not just sit on the bookshelf gathering dust.

I hope this brief summary has helped you in your planning process. If you have any further questions then please feel free to contact me, I’d be delighted to hear from you.

Copyright Mel Budd 2007

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