Elements of a Marketing Plan
There isn't a single way to create a marketing plan, there isn't a specific format for how it should be presented, but there are primary elements of a marketing plan that should be included in the plan. A marketing plan is usually a fairly large document that serves as a guide for an organization. Because it contains so much information it can't be easily communicated, so it is documented for reference and to ensure details are accurate. The following are the main elements of a marketing plan:
1) Business Mission Statement
2) SWOT Analysis
3) Objectives
4) Marketing Strategy
a. Target Market Strategy
b. Marketing Mix (the Four P's)
i. Product
ii. Distribution (Placement)
iii. Promotion
iv. Price
5) Implementation, Evaluation, & Control
Business Mission Statement
A business Mission Statement answers the question of "what business are we in?" The mission statement should be short, concise, and profound as it guides the business decisions into the long-term future. The mission statement is based on an in-depth analysis of the benefits the business seeks to provide its customers. Note the emphasis is on the market(s) the business is providing services to, not the product. When a business mission statement is focused on good and services, rather than the benefits the business is seeking to offer to its customers, the business mission is too narrow and will limit business potential. When a business defines its mission based on goods/services it suffers from Marketing Myopia (narrow, short-term thinking).
Mission Statement Examples
Ben & Jerry's - "To make, distribute, and sell the finest quality all natural ice cream and euphoric concoctions with a continued commitment to incorporating wholesome, natural ingredients and promoting business practices that respect the earth adn the environment."
Honda - "The power of dreams."
JetBlue - "Air on the side of humanity."
SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and Weakness refer to internal components of the business; what do we do well (our strength) and what do we not do well. Opportunities and Threats refers to the external business environment. The SWOT analysis section of a marketing plan will require significant research to ensure a solid understanding of the business, and the business environment. It will require an intimate understanding of the business functions and operations, as well as the industry that the business competes in.
As part of the SWOT analysis, a business will identify competitive advantages. Competitive advantages come in many forms:
1) Cost Advantages - these can come from many areas of the business
a. Experience curves (there is a relationship between experience and business competency)
b. Labor efficiency (this is in reference to labor costs)
c. No-frills (removing unnecessary "benefits" that don't add value to the business or customer)
d. Subsidies (government grants or interest-free loans)
e. Product design (the use of technology to implement efficient production processes)
f. Reengineering (redesign product and processes to become more efficient)
g. Innovation (leveraging technologies to reduce costs by implementing new processes)
h. New Approaches to Service Delivery
2) Product and Service Differentiation
a. This occurs when the customer perceives a product as having something of value that is unique to that specific product.
3) Niche Competitive Advantage
a. This generally comes from a business offering a product to an under-served market.
Strengths and Weaknesses
Strengths and Weaknesses typically come in the form of the following areas:
- production capabilities (such as low production costs),
- marketing skillset (employees with a solid understanding of marketing and how to leverage it),
- financial resources (leveraging cash flows, investors, strong financial position),
- branding or goodwill (company is known by it's images, slogans, and is viewed in positive light by consumers),
- employee skillset (knowledgeable employees, educated, high level of experience),
- technological capabilities (modern technological infrastructure, newer systems vs legacy software)
Any of these can be a strength, such as low production costs, or they can be a weakness, for example an aging fleet of trucks or high employee turnover.
Opportunities and Threats
Opportunities and threats refers to the external business environment, sometimes referred to as forces, includes areas such as: social, demographic, economic, technological, political, legal, and competitive. It is important to understand, study, and acknowledge the interrelationships that exist between each area. For example, as a result of social influence the political climate may change and result in a new law that has an impact on a given business. The new law may present an threat or an opportunity; maybe it will cause gas prices to rise due to some new requirement with how oil is refined. Some industries will see this as an opportunity, while others will experience the change as a threat to profitability.
Marketing Objectives
The purpose of this section is to state the marketing plan objectives; to establish goals. These goals will be used to evaluate the success of the marketing plan and how well the organization is implementing it's marketing strategy. Marketing objectives should follow the idea behind establishing SMART goals. The objectives should be realistic, measurable, time-bound, and based on a benchmark. For example, "Our objective is to realize a 7% return on investements for CY19 (ending December 31, 2019), with a payback on all new investments not to exceed 3 years."
Marketing Strategy
The marketing strategy component of a Marketing Plan is made up of two primary sections; Target Market Strategy and Marketing Mix.
Target Market Strategy
In this section of your marketing plan, you will want to clearly identify who your target market is. Answer the question, "Who are my consumers?" You will want to look at the attributes of your customer and put them into groups. For example, if you sell diaper's you have 3 primary groups of consumers; 1) Women that have babies still in diapers, 2) Men who have babies in diapers, and 3) grandparents that may be helping with new baby expenses. This is just a high-level example, and will need to be more clearly identified. Such as, what are the age groups of your customer, is this a high-end shopper or are they frugal, while your emphasis may be on marketing to women, maybe you want to analyze or test marketing to men. From here, you will want to identify the size of the target market and make sales projections, along with evaluating your competition in that particular segment.
Marketing Mix
The marketing mix is synonymous with the Four P's of marketing; product, placement (distribution), promotion, and price. In this section of the marketing plan you will want to fully analyze and establish a strategy for each category.
- Product: This area covers the full scope of the product, beyond just the product itself. It includes the packaging, warranty, branding, value, image, post-sale service.
- Placement: Placement refers to the physical placement of the product; the distribution. It involves the strategy of making sure the customer has what they want, when they want it, where they want to buy it.
- Promotion: This is the advertising strategy. How will you reach your customers? Will you have a public relations strategy? Sales promotions? You will answer these questions in this category of the four P's.
- Price: This area will focus on pricing strategy. This is the easiest element of your business to change, and it will vary to provide data on how price affects sales.
Implementation, Evaluation, and Control
This final section of your marketing plan will be where you establish your strategy for implementation of your plan, you will evaluate results (measure performance), and make corrective actions where necessary to ensure you are achieving your objectives.