Marketing Plan
A marketing plan should answer questions about who will buy your product or service and how you expect to reach those customers. You want to describe what your customers will expect and need from you and how you plan to meet those expectations and needs. In short, you should cover the four “Ps”: Product; Pricing; Placement (or how you're going to provide your product to the customer); and Promotion.
Just like the overall business plan, a marketing plan can be long and complex or short and simple: it just depends on what your business needs. But it should indicate how you're going to reach and retain your customers, whom your competition will be, and how you plan to make the customers come to you instead of the competition. You'll also be looking at how big the market is overall, and what portion of it you can expect to capture.
Elements of a marketing plan can include:
Overall Market Analysis
Goals
Target Market Analysis
Competitive Analysis
Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis
Marketing Strategies
Just pick and choose the elements that you feel make sense for your business. And be sure to refer to your plan frequently, checking off each step of your plan as it's accomplished and reviewing your assumptions and projections.
Overall Market Analysis
In this section, you'll describe your surrounding economic marketplace. Which sectors are doing well, and which are in an economic downturn or perhaps threatening to fail? Which part of the overall market will you be targeting, and what is the regulatory framework involved — which licenses and permits do you need, which regulations do you need to comply with, and will you be collecting sales tax?
Goals
It's essential to write down clear and concise descriptions of your business goals. Depending on your situation, you might want to describe them in terms of annual sales, market share (or the number of customers you want in your database at certain points in time), or the annual salary that you want to draw from the business. Simply choose a reference point that makes sense for your business and for the reasons that you're launching a home-based business. You can also add less tangible goals that are important to you such as giving a certain percentage of your net profits (after expenses) to a nonprofit or charitable organization.
Target Market Analysis
This section comes from the market information you collected about your customers in Chapter 4. It will describe who your customers are; where they are located; and which characteristics define them. This could include demographic information for individual consumers (such as age, income, family size, and education), or it could cover defining characteristics for businesses or government clients (business or office size, location, customers, and services provided).
Customers tend to be moving targets — their interests and needs change over time, sometimes very quickly. The key is to constantly refine your knowledge of the market and become more accurate over time about how the business will grow. That way, you'll recognize market changes and can adapt quickly to new customer demands.
The target market analysis also includes factors such as the number of customers in your area, and their purchasing decisions — how often they'll buy the product or service that you're offering, for example. Your intention here is to clearly describe what your customers will expect from your product or service, and how you'll deliver on those expectations.
Competitive Analysis
This is also where you'll use the research described in Chapter 4. You'll list who your competitors are; where they're located; how they're structured; how successful they are; and how long they've been in business. Also assess what you like or dislike about their operation — what seems to be working for them and what doesn't?
You also need to describe who their customers are, where they're drawing those customers from, and why the customers are choosing them (their USPs, for example). What's their pricing structure? Are they offering benefits or services to their customers that go beyond good prices? This analysis gives you a chance to establish what your USP will be in comparison to your competition and how your business will compare in terms of pricing and structure.
SWOT Analysis
In this section, you'll assess your business's strengths, weaknesses, opportunities, and threats (SWOT). This will help you to quickly take advantage of opportunities for growth, and should help you prepare for problems, thus reducing their impact on the business.
When you look at your strengths, consider what you have going for you. How do your products or services meet your clients' needs? It could be that you deal well with other people, making your customers feel comfortable in your store and thus bringing them back again and again.
Conversely, what are your weaknesses? For a sole proprietor, this often involves personal limits — there's a finite number of hours that you can work each week before your family life suffers and your stress level rises. In addition, assess your products or services: Are they fully meeting your customers' needs and if not, why?
You may not be ready to take advantage of the opportunities that you identify in this analysis, but knowing that they're there always gives you options. Are there ways that you can establish new client bases for example, or add a related service or product area to build on existing ones?
You also need to consider the threats to your business. Many will come from your competition — undercutting your prices, perhaps, or expanding into your geographical area. But threats also come from inside the business: Not keeping current with the marketplace, a lack of time to follow up with clients, or a failure to protect your ideas (your intellectual property) can cost you money or clients. Do you have a contingency plan that will handle equipment failure and even weather-related problems?
Marketing Strategies
Based on your USP and the customers you're trying to reach, you need to determine how you're going to reach them. This might include strategies such as purchasing advertising in various media (from newspapers to television), and generating media interest in your business to achieve free, positive publicity.
If you want to increase your market share, you could list all of the local media outlets that reach the people you've identified as part of your target market. Include how much each outlet charges for its advertising and when spending that money would be most effective.
Once people know that you exist, how are you going to get your product to them? If you're going to be distributing your product through other salespeople, perhaps through consignment stores, for example, this is the place in the business plan to show how you'll do it.
Essentially, you're going to take each of your goals for placement and promotion and list the strategies that you're going to employ to achieve them. Maybe you could obtain testimonials from customers that you can use in your advertising, for example. Remember the Internet, too. Although not every business benefits from a Web site, an increasing number of customers are expecting to at least check you out online, if not actually make the purchase over the Internet.
Don't forget that you need to review your plan and evaluate your progress and performance. How often should you review the plan to check reality against your predictions? (Weekly or monthly, perhaps.) Are you achieving your goals? If not, what are the problems that you're encountering? Do you need to change your strategies?
Listing your marketing goals and strategies isn't enough to make them happen. Depending on how complex your plan is, you may want to break out the steps involved into an implementation plan, where you list individual tasks and when you're going to do them. This provides a very clear road map, which might help if you're feeling unfocused because there's just so much to do at once.
