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HOW TO WRITE A MARKETING PLAN

HOW TO WRITE A MARKETING PLAN

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Writing a marketing plan helps you in four ways:

  1. It forces you to sit down and evaluate your business. You need to take the time out to check on how well your business is doing and whether you are missing any significant trend.

 

  1. It gives you a marketing action plan that you can share with employees and investors so that everyone knows what you are trying to accomplish.

 

  1. It provides you with a timetable that you can follow throughout the year. This timetable will keep you on schedule and provide a detailed listing of your expected expenses throughout the year. It tells you, in advance, how much money you will need to spend. You may have to adjust your marketing plan several times to bring your expenses in line with the money you have available.

 

  1. It allows someone else to come in and take over the marketing activities. A marketing plan will allow a new person to come in , understand what you are trying to accomplish, and implement the tactics in the timetable.

 

The marketing plan has two contradictory objectives. First, it has to be brief enough to be quickly and easily read by people who just want to know the essence of your marketing activities. Second, it needs to be specific, with the action timetable. To meet both objectives, the marketing plan should begin with a brief overview of the rationale behind the strategy and conclude with a detailed timetable.

 

When you are working on a marketing plan, remember that there are dozens of potentially successful strategies for any business. Don’t spend months trying to find the one perfect strategy. You are better off moving into action with tactics that help that will help your business than you are continually reworking your plan until you feel it’s perfect.

 

Your first consideration in a marketing plan is consistency. You want this year’s plan to fit in with successful programs of the past. Customers relate with a consistent marketing program. Don’t be afraid to change your program if it’s not working, but don’t change it unless you need to.

 

MARKETING PLAN FORMAT

Objectives

Sales (In your currency)                            —————-

Gross Profit (In your currency)                    —————-

Gross Margin Percent                                —————-

Net Profit (In your currency)                        —————-

Market Share (In your currency)                    —————-

 

The opening section gives a capsule view of the product’s sales and objectives and profit position. Here is a brief description of each item:

 

  • Sales: This is your expected sales for the next year.
  • Gross profit: This is total sales less the cost to buy or produce the product. This money is what you use to pay marketing, overhead, and administrative expenses.
  • Gross margin percent: This percent is calculated by dividing the gross profit by the sales. In most industries, there is a typical gross margin percent. This percent is different for different industries. For example, pharmaceutical companies’ gross margin is usually 60 to 80 percent, whereas the figure for heavy equipment manufacturers is 40 to 45 percent. Listing this figure here helps you see how your profitability compares to the industry average.
  • Net profit: This is your gross profit less marketing, sales, administrative, and overhead expenses.
  • Market share: This tells the reader how important you are in your relevant market. For example, if you sell clothes to teenage girls in a mall, your market share might be based on similar stores within a one-kilometer radius. If you are a manufacturer of clothes for teenagers, your market share would be based on clothes sold through specialty mall retailers.

 

Sales History

Last Three Years            Next two Years

Total market size ($)        ——  —— ——          ——      ——

Your dollar size            ——    ——    ——          ——      ——

Market share                ——    ——    ——          ——      ——

 

The last three years should be your actual sales history. The next two years are your estimates of what sales will be. If you don’t have a sales history, this section should explain how you predicted your first-year sales. You can estimate sales volume even if you don’t have a similar store or business to compare to.

 

Market Share Trends

Last Three Years            Next two Years

Your market share             ——  —— ——          ——      ——

First major competitor            ——    ——    ——          ——      ——

Second major competitor        ——    ——    ——          ——      ——

Third major competitor        ——    ——    ——          ——      ——

Others                            ——    ——    ——          ——      ——

 

The value of market share trends is that they indicate how you are doing compared to your competitors. They also show whether any of your competitors are increasing their share rapidly. You don’t want want one competitor to jump ahead of anyone else, as the company’s momentum will hurt your sales.

 

Commentary

This section should give an overview of the events of the last year or two that have led to your current market position. List major events, trends, and competitive developments that either have happened or are expected to happen.

 

Competition

This section should list your major competitors and their current position as you see it, including any significant strengths and weaknesses.

Your competitors aren’t necessarily all businesses just like yours. They can also be stores or products offering a similar benefit or service. For example, if you have an athletic shoe store in a mall, a sporting goods store that also sells shoes could be a competitor. If you sell a word processing machine, you might want to consider a low-cost computer  with word processing capabilities as a competitor.

 

Price Comparison/Price Value

This section includes a chart comparing your and your competitors’ prices. After you list the prices, you may want to note any significant  features that explain the price differences. For example, a color TV doesn’t have remote control could explain its lower price. Also list subject features, such as product quality, if they are areas of significant difference among competitors.

 

Problems/Opportunities

This section should contain a brief description of any problems or opportunities, either short-term or long-term, that are facing your business.

 

Major Marketing Thrusts

The word “thrust” rather than “effort” or “strategy” implies that you are going to get the job done. Among the definitions of thrust are “to push or drive with force,” and “to push forcibly into a course of action.”

There are three major marketing thrusts. The first is a thrust designed to make you better than anyone else by creating a suitable advantage. You might be targeting a new customer, re-positioning your product so that it meets the needs of specific application, or adding and changing product features to meet the needs of a certain customer segment. You might also decide to pursue a new market channel, or to add new services to help  your distribution networks. For this type of thrust, you want to state the change you are making and the tactics you are going to use to make that change.

 

For example, you might decide to re-position your product so that it will be used for a new application. Your tactics might include changing your name, creating a new slogan, printing new fliers and brochures, attending certain trade shows, joining key industry groups, starting an advisory council, and running three events cosponsored by a community group. You want to state your message and the strategy you are pursuing, then explain in detail how you are going to implement that strategy.

 

You also want to make sure to explain how your efforts to create sustainable advantage are going to solve your competitive problems.  For instance, suppose one of your problems is that your prices are considered too high given the customers’ perception of the value of your product. If your marketing thrust is to specialize in one application, explain why that thrust will improve your perceived price/value relationship.

 

The second type of thrust involves the way you find or communicate  with customers. You might be adding a computer bulletin board, starting an active network and referral program, or putting in place a publicity strategy. Again, you want to list the major actions you are going to be taking, then explain the tactics you will use to implement your strategy.

 

The third type of thrust is your sales strategy, whether it be adding distributors, starting to sell through direct mail, instituting a new sales policy, providing more sales back-up materials, or implementing a co-op advertising program. Again, you want to list what you are going to do and what tactics you will use.

 

Minor Thrusts

You cannot have more than two or three thrusts in any given year. If you do, you will never be able to implement them. If some of your thrusts are not major, such as providing retail displays, list them here rather than in the “Major Thrust” section.

 

Positioning Statements

A positioning statement indicates who your customer is, what your product is, and why people should buy from you. For instance, some positioning statements are: “ABC Office Supplies carries every office supply a doctor’s office will ever need”, The Record Revolution is a low-priced neighborhood record store that caters to teenagers”, or, “Jaguar sells high-income professionals the world’s most elegant sedan.”

 

A positioning statement is not a marketing slogan. A marketing slogan conveys a message to a customer, whereas a positioning statement is for internal company use. It makes it clear to every employee what the company is trying to accomplish. It is listed in the marketing plan because you want to be sure your plan supports the positioning statement.

 

Tactics

List in detail all the tactics you plan to implement in the next year. You may have already prepared a detailed analysis for some of the tactics. If that is the case, give a brief description of the tactic in this section and include your analysis as an attachment.

 

Where Will the Business Come From?

This section justifies your sales projection. If your projection is the first section of the plan call for a 20 percent increase in sales, you should explain how your marketing thrust and tactics will generate that increase.

For example, a manufacturer of industrial cleaning equipment might project a 40 percent sales increase. The first marketing thrust calls for the manufacturer to specialize in cleaning equipment for chemical plants. The company is going to reconfigure two products and add one totally new product to better meet the needs of chemical plants.

The company’s other thrust are to attend two trade shows, to participate  in a seminar focusing on cleaning corrosion-resistant, glass-lined storage tanks, and to add two manufacturers’ representatives.

 

To achieve a 40 percent sales increase, the company would need to sell twenty-four new pieces of equipment. The manufacturer expects to get  six new customers from each trade show, three from the seminar, and five from each new manufacturers’ representative. These numbers are in line with sales picked up in the past from trade shows and new representatives. Does the 40 percent increase make sense? Yes, based on the company’s past experience. This section of the marketing plan format differs from most other published formats because it forces you to prove that your sales objectives are reasonable and obtainable.

 

Timetable

This section lists a timetable that you can refer to throughout the year. It also allows you to determine marketing costs on monthly basis. Here is an easy-to-follow format.

 

Action Items   Key Dates Quantity  Costs Person Responsible

  1. —————–        ————    ———–    ——-    ————————
  2. —————–        ————    ———–    ——-    ————————
  3. —————–        ————    ———–    ——-    ————————
  4. —————–        ————    ———–     ——-    ————————

 

The key dates are the months in which the program will be implemented. Some programs may have several key dates, such as an advert campaign that has to be introduced to key retailers a month before its general release. In that case, list all the key dates in the timetable.

 

Bernard TaiwoBernard Taiwo
Bernard Taiwo
I am Management strategist, Editor and Publisher.

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