The Importance of a Marketing Plan
A marketing plan is the initial step of all marketing endeavors.
No business should ever be started without a business plan. Along the way, all businesses will engage in marketing efforts to increase their clientele and generate revenue. At the inception of this marketing journey, there has to be a well written, well understood marketing plan.
A well written marketing plan is a dynamic document that should be optimised based on the conditions and changes in the market. Let’s take as an example the circumstances of the present pandemic – all businesses, regardless of their domain, had to amend their marketing approach, as well as many other aspects of their organisation. Having a good marketing plan that is updated accordingly when necessary can help your business stay on top of the competition and various external influences such as black swan events.
The components of the marketing plan
There are a variety of approaches to writing a marketing plan, however, the majority will contain the following components, which are truly fundamental to any company:
- Executive Summary
- Tactical Phase
- Implementation Stage
- Financial Assessment
It should be noted that developing the marketing plan requires times, discipline, research, analysis and financial projections.
1. Executive Summary
The Executive Summary is a critical part of your Marketing Plan, as it connects all parts or departments of your business under the same principles and overall vision. It is very likely that your business already has these concepts and you should make use of them. If not, then you should work with your advisors or senior leaders to develop them.
Your Executive Summary should contain the vision, mission and scope of your enterprise. A mission statement defines the company’s nature of business, its objectives and the approach(es) to reach them. A vision statement typically describes the desired outcome for the company.
The scope of your plan describes what specific parts of the business – products or services, are you writing a marketing plan for. You can write a plan for one specific product or service, a collection of products or services, or for the company’s entire family of products and services.
The scope of your marketing plan depends on how your brands are organized – your brand architecture. You can write marketing plans around each brand given where they are structured in the overall architecture. For example, if each brand is defined on it’s own, in a house of brands structure, then each individual brand gets their own marketing plan.
If instead your company has a branded house, meaning one master brand for the whole company, then your marketing plan should address that level of products and services.
The ultimate purpose of the Executive Summary is to align all employees under the same business philosophy, goals brand image and culture.
2. Market Research
Knowing your market is an indispensable feature of your marketing plan – without knowing your market, you will be pretty much rolling the dice, making decisions based on subjective instincts, beliefs or interpretations and not via objective reality.
- Market size
- Market shares
- Economic influences
- Regulatory influence
- Their products and services
- Price points
- Value propositions
A market analysis starts with determining the Total Addressable Market (TAM) – which is the total sales of all companies in your industry, including the potential sales from any qualified customer who has not yet purchased any products in the category.
Theoretically, the TAM represents the maximum sales opportunity. The easiest way to measure the TAM is to take the total industry sales and divide that number by total addressable market. The result of this equation is called Market Penetration (the total market that has been reached). A low number is actually good because it means that there’s potential for growth. After this, you can take your company’s total sales (of products and services) and divide the number by the total market sales to get your revenue market share.
The people that qualify to be part of the TAM are qualified customers that have not yet bought a product or service similar to those you offer, current loyal consumers of such products or services, customers that buy from you and your competitors and customers that are exclusively buying from competitors.
Competitor analysis is another important step, as part of your research stage, in your marketing plan. Knowing your competition’s strengths and weaknesses can help you determine where your business stands in comparison to your opponents – this will help you select the right strategy to win.
Competition can be very dynamic – direct, indirect or substitutes.
- Direct competitors sell the same products and services as your company, with similar benefits.
- Indirect competitors sell similar products or services as your company but with different benefits.
- Substitute competitors are selling products or services that can be used instead of the ones your provide (ex: a motorcycle producer convinces a customer to purchase a motorcycle rather than a car – your business being the car seller).
Some of the most useful ways to analyse competition is with a Competition Matrix or a SWOT analysis.
Finally, the customer analysis, helps you determine who and where are your potential customers – understand how they think, what they want, what they like and how to approach them with the adequate messages that will convert at the highest rates. A good approach would be to create your client persona, a hypothetical customer where you determine it’s wants, needs, attitudes and demographics. Finally, you will need a clear description of the major benefits that the customers are most likely to seek when considering purchasing products or services such as the one you sell.
Once you conduct your Market Research, understand your market, competitors and customers, you are then ready to optimise your products and services, as well as the business’ image and model, in a way that is set to achieve its goals. But in order to achieve this, you will need a strategy.
The heart of any marketing plan is, of course, the strategy – this describes how you plan to win and reach your business objectives. The strategy section typically has 3 parts:
Grouping customers around a particular benefit they seek, wants, needs and persona.
Choosing which customers in your segment you are going to want to convert.
How you will reach your targeted audience and what message will you use to convert them.
Once you have developed your marketing strategy, it is time to determine your tactical phase.
4. Tactical Phase
Your marketing strategy comes to life only when your company takes action. In the tactical phase, you will have to describe your products or service selling programs, your pricing, the places (you are advertising) and the promotion (how you are advertising), as well as the design and branding of your company and its items.
In marketing, this notion has been characterised as the 4 P’s. New concepts, such as the 7 P’s of marketing, or 15 P’s have emerged. But for the sake of saving time, let’s keep it simple.
What you sell. Could be a physical good, services, consulting, etc.
How much do you charge and how does that impact how your customers view your brand?
Where do you promote your product or service? Where do your ideal customers go to find information about your industry?
How do your customers find out about you? What strategies do you use, and are they effective?
After determining your 4 P’s, you will want to bring all of these attributes into one context by creating your Value Proposition – the way (pitch) you will communicate all of these aspects to your customers.
5. Implementation Stage
A good marketing plan provides an in-detail layout of the steps your will take to put your marketing efforts in motion.
The implementation stage of your marketing plan requires careful scheduling, time and prioritisation of your marketing operations – how will you start, which campaign will you use, when will you start, who will be entrusted with which tasks and what are the deadlines? These questions need to be answered accurately and your actions need be executed on time, in order to efficiently implement your marketing plan, and generate satisfying results.
The last part of your implementation stage, is to designate your metrics, also known as Key Performance Indicators (KPIs), in order to measure the progress of your marketing campaigns.
6. Financial Assessment
It is no secret that marketing will cost you time and money, therefore it is vitally important to develop a budget and a forecast of your financial expectations.
A good budget will help you allocate the right amount of capital into the right marketing endeavors, in order to achieve the maximum impact.
Marketing Plan writing tips
Start off with a PowerPoint presentation – write the main components of the plan, record key information, date your drafts and aim to complete the document with the appropriate information and steps that you are to going to take.