Marketing plan

Responding to changes in the market place is vital to the success of a marketing orientated organisation, but for small businesses this often involves an element of risk. Devising a marketing plan for a business can help to reduce the risk. Without proper planning a small business can be doomed to failure or poor results. In producing a plan, a number of important questions must be asked about how the business should develop. What other markets could be entered? Is the market declining or expanding? How does the business compare with others in the same field?

A marketing plan will help management see the business more clearly and is the key to developing attractive services or products. Small firms can be the best source of ideas and inventions. Many of the best products can be the result of luck or ‘brainwaves’, but a well-produced plan can help those ideas become more acceptable to others. Planning is also important for those who intend to adopt someone else’s idea and make and sell it better.

Before the planning stage, it is necessary to understand how potential customers are turned into real customers. The most important thing to understand before planning is what is often referred to as ‘The Marketing Mix’.

Product: The benefits of a product or service must fulfil the needs of the customers – otherwise why should they buy?
Price: Customers may need a product or service – but can they afford it?
Place: Sell in a location that is both attractive and accessible to customers.
Promotion: There is little point in getting the product, price and place right if customers don’t know of the existence of the business.

Outline Plan

There is no hard and fast way to draw up a marketing plan. This 10-step approach has been suggested as being suitable for small businesses.

Step 1: Define Objectives. The best way to do this is to set realistic, achievable targets. The more precise the objectives, the easier it will be to formulate a workable marketing plan.

Step 2: Take Stock of Resources. Think hard about the strengths and weaknesses of the business and its staff. List what equipment exists and what will be needed. Take account of any stock held. List what support will be available. Will the telephone be answered at all times?

Step 3: Create Identity and Image. The image of a business is a picture in the mind of the customer. The picture is created by what they see and hear and should be a reflection of a sound, well run business. The starting point for creating a positive image is to invest in an identity – a name style or ‘logo’ to appear on everything associated with the business.

Step 4: Plan how to Project an Image. The image and price are often linked. Cheapness can be seen as “cheap and nasty” or “fantastic value for money”. Simply stating that the business is concerned with aspects like quality or rapid response is not enough to impress an increasingly discerning public. These qualities must be reflected in everything. Devise systems to manage time, return telephone calls promptly etc. If delivery dates cannot be met, devise systems to keep the customer informed.

Step 5: ‘Profile’ Products or Services. Think of products or services as a package of benefits designed to meet the needs of the customer. Profiling them simply means understanding the features and benefits of products or services and what makes people buy them. List all the products or services. Alongside each one add a feature then add a benefit to each feature. Using the words “which means that” is a good way to link features to benefits. In another column make a note about quality standards and devise systems to ensure consistent quality.

Step 6: Project Buying Patterns. Some individuals or organisations are always prepared to buy new things as soon as they appear on the market, whilst others wait until things have been tried and tested. People are sometimes nervous about trying new ideas and hold back from buying. Rapid changes in technology and customer expectations means that the public may tire quickly of some products or services. A marketing plan must allow for both of these situations. Set realistic time scales and do not give up too soon if the uptake of a new product or service is not as fast as expected. Plan how different products or services could be substituted quickly.

Step 7: Analyse the Market Place. Analyse the market place in three ways by looking at the geography, the state of the market and the competition. How far will customers travel? How far away can visits be made to see them? What public transport serves the business? How well are people in the same business doing? Where are the competitors? What are their prices? How does their service differ?

Step 8: Timing. It is easy to make the mistake of launching a product or service as soon as possible, even if this is not the best time. The urge to launch is often overwhelming, with the desire to be in the market before competitors and steal a march on them. If the timing is wrong, the whole project could be jeopardised. Consider when the customer is ready to buy not when the business is ready to supply.

Step 9: Determine the Pricing Strategy. Pricing is not just a matter of working out how much things cost to you and then adding a profit. Costing is a matter of fact; pricing is a matter of policy. Products or services do not have to be cheap to attract customers. Low price is often the most important buying motive, but not in all cases. If the price is set too low, this can have a bad effect on sales. The customer may ask “Why is it so cheap?” Prices can always be reduced but to raise them is more difficult. Buyers are influenced more by their emotions than by reason. A pricing policy will be dependent on market research, the competition, image and value for money.

Market pricing – what will the market bear, and for how many sales? (All costs, plus profit margin). The price reflects product/service, market conditions, customer expectations, the competition, volume sales, seasonal trends, etc.
Costs plus – (Total costs to produce, plus a profit margin). The simplest method, but can be misleading because the real costs often depend upon sales volume.
Backward pricing – Where the customer dictates the price they will pay. The supplier then has to work ‘backwards’ to tailor what can be provided to that price, ensuring all costs and profit margins are included.
Time & Materials (Fees & Expenses) – Used in non-retail businesses. Factors may include time, labour, materials, expenses, expertise etc.
Premium pricing – Quite simply the law of ‘supply and demand’. If customers want the product or service and there are few suppliers, they will be prepared to pay a ‘premium’ to get it! Examples are innovative products, specialist areas etc.

Step 10: Design a Promotional Campaign. It has been said that there are only three ways to sell anything! Advertising, Personal Salesmanship and Display (at the point of sale). Every method ever devised to persuade someone to buy something falls into one of these categories. A promotional campaign can be built around four key areas:

Find potential customers
Interest and simulate them
Satisfy their needs
Sell!!

Summary

A marketing Plan can only be put together after extensive research of why customers buy and who they are. Information on the strengths and weaknesses of individuals, the business and the competition is needed.

Advertising, promotion and selling are just the visible part of the marketing effort. Begin by developing a product or service the customer wants. In this way the business never ends up trying to sell a product nobody wants to buy!