What is a Marketing Plan?
Writing a marketing plan for a company is a distinct and separate document from the segment within a business plan. An organizations marketing plan is a thorough document that guides the organizational marketing decisions; it acts as a central reference for personnel within the company, to assist them with working toward a common goal. Marketing is generally one of the most expensive pursuits of a business, but it is also one of the most important aspects, as a business often relies on this area to maximize profit potential. While there isn’t a specific, or correct, format for a marketing plan, there are five elements of a marketing plan.
Each of these requires significant research to ensure a strong foundation of understanding not only the industry, but the market that the business is competing in. The sections are as follows:
- Business Mission Statement
- Objectives
- SWOT Analysis
- Marketing Strategy
- Implementation/Evaluation
Mission Statement
An organization’s mission statement is the foundation of the marketing plan. The mission statement answers the question, “Why are we in business?” A mission statement is based on an analysis of: 1) the needs (or wants) of its’ customers and 2) environmental conditions. Additionally, it should be fairly specific (not a broad statement) and it should focus on the market, or markets, the organization is pursuing rather than the specific product or service the organization is offering. The reason behind focusing on the market rather than the product is to allow room for change. If an organization has many products and departments controlling each product, then it may adopt a mission statement for each.
Objectives
Marketing plan objectives are statements that outline what should be completed through marketing activities. These objective should be specific and follow the acronym SMART; Specific, Measurable, Achievable, Realistic and Timely (or Time oriented). They should be stated with specific measurable goals that can be achieved within the time period specified, but also be just out of reach to give the company something to strive for- improvement.
SWOT Analysis
SWOT analysis stands for Strength, Weakness, Opportunity and Threat. Organizational strengths and weaknesses are internal to the company and are controlled by decisions within the company, while opportunities and threats are external forces and are not controllable by the company.
An organizational strength is manufacturing a quality product for kid’s that is durable, the materials the company uses has an impact on the quality of their product and controlled by their manufacturing decisions. An example of a weakness may be the number of defects that occur in the production process that cause the company to lose money as result of waste/scrap. In both of these scenarios, the company controls the production process which has a direct effect on the products they make.
An example of an opportunity could be the result of political changes that occur in a given country. The country may decide that it wants to allow imports of a specific product never made available before. If company X produces this product, it is an opportunity for this company and it had no control of the market opening up (presuming it didn’t have lobbying efforts with the country to open its’ doors to their product…). An example of a threat is Apple’s iPad, they manufactured one of the 1st successful tablets and other company’s seeing their success began to manufacture tablets as well. Apple could not control other companies entering the market.
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As a result of conducting a SWOT analysis the company will identify their competitive advantages, from assessing their strengths and weaknesses. A few competitive advantages are: cost, product or service differentiation, or a niche competitive advantage. The SWOT analysis will also provide a foundation for establishing strategic direction for the organization, as a result of analyzing opportunities and threats. Strategic direction may be deciding to develop a new product, pursue new customers or increase share of existing customer base, to diversify.
This area also allows the company to categorize, and assess, its product portfolio. As a result, the company may better understand its’ product offering and make more effective marketing decisions regarding their product mix. This is sometimes called the marketing matrix and categorizes products into four partitions- high growth and large market share (star), low growth and large market share (cash cow), high growth and low market share (problem child), and low growth and low market share (the dog… which is usually the first product to be cut from a product mix). From this classification of products, the company can make decisions to build, hold, harvest, or divest; corresponding to where the product falls within the mix (stars = build, cash cow = hold, etc.).
Marketing Strategy
In this area of the marketing plan, the “Four P’s” are addressed. The Four P’s refers to; Product, Placement, Promotion and Price. An evaluation of the product is just as it sounds; it is focusing on the product from packaging to its warranty. Next, product placement is assessed. Here the company evaluates where the products are sold, to include the logistical aspects of moving the goods from the factory to the retailers. When evaluating promotion; advertising, sales promotion, public relations and perception are assessed with a focus on how to improve the message that is conveyed to consumers. The final area of consideration is pricing. Pricing is the easiest element to change and is monitored closely.
Implementation/ Evaluation
Implementation is the final stage of a marketing plan. This is the process of setting into motion the results, conclusions and objectives that have been established as a result of the marketing plan. Once the objective is implemented, the marketing managers must evaluate progress and determine those decisions that are producing successful results and those that are not living up to expectations.