HOW TO WRITE A MARKETING PLAN (part1)

The Marketing Plan is a highly detailed, heavily researched and, hopefully, well written report that many inside and possibly outside the organization will evaluate. It is an essential document for both large corporate marketing departments and for startup companies.  Essentially the Marketing Plan:

• forces the marketing personnel to look internally in order to fully understand the results of past marketing decisions.
• forces the marketing personnel to look externally in order to fully understand the market in which they operate.
• sets future goals and provides direction for future marketing efforts that everyone within the organization should understand and support.
• is a key component in obtaining funding to pursue new initiatives.

The Marketing Plan is generally undertaken for one of the following reasons:

1. Needed as part of the yearly planning process within the marketing functional area.
2. Needed for a specialized strategy to introduce something new, such as new product planning, entering new markets, or trying a new strategy to fix an existing problem.
3. Is a component within an overall business plan, such as a new business proposal to the financial community.

There are many ways to develop and format a marketing plan. The approach taken here is to present a 6-Part plan that includes:

1. Purpose and Mission
2. Situational Analysis
3. Marketing Strategy and Objectives
4. Tactical Programs
5. Budgets, Performance Analysis and Implementation
6. Additional Consideration

This plan is aimed at individual products and product lines, however, it can be adapted fairly easily for use in planning one or more strategic business units (SBU). The page length suggested for each section represents a single-spaced typed format for a plan focused on a single product. Obviously for multi-product plans lengths will be somewhat longer.

It is assumed that anyone developing a Marketing Plan possesses a working understanding of marketing principles.  If you do not, it is suggested you spend considerable time learning about basic marketing through the previous sections of the Principles of Marketing Tutorials.

Note, throughout the plan the word "product" is used. However, the information presented in the Marketing Plan tutorials applies to both products and services. 

Part 1: Purpose and Mission

Part 1 of the plan is designed to provide the reader with the necessary information to fully understand the purpose of the marketing plan. This part also includes organizational background information, which may be particularly important if the audience for the plan is not familiar with the company, such as potential financial backers. Some of the information, in particular the mission statement, may require the input of upper-management. The information in this part will prove useful later in the plan as a point of reference for material that will be introduced (e.g., may help explain pricing decisions). In cases in which there are separately operated divisions or SBU, there may also be mission statements for each. (Length: one page or less)

1. Purpose of the Marketing Plan

• Offer brief explanation for why this plan was produced
  • e.g., introduce new product, enter new markets, continue growth of existing product, yearly review and planning document, etc.
• Suggest what may be done with the information contained in the plan
  • e.g., set targets to be achieved in the next year, represents a departmental report to be included in larger business or strategic plan, etc.

2. Mission Statement
For larger firms this may already exist in a public way (e.g., found in annual report, found on corporate website) but for many others this may need to be formulated.
The mission statement consists of a short, finely-honed paragraph that considers the following issues:

• Identifies a stable (i.e., not dramatically changing every year), long-run vision of the organization that can answer such questions as:
  • Why is the company in business?
  • What markets do we serve and why do we serve these markets?
  • In general terms, what are the main benefits we offer our customers?
    • e.g., a low price software provider may state they offer “practical and highly affordable business solutions”
  • What does this company want to be known for? 
  • What is the company out to prove to the industry, customers, partners, employees, etc.?
  • What is the general corporate philosophy for doing business?
  • What products/services does the company offer?
• In developing the vision presented in the mission statement consider:
  • Company History
    • How company started and major events of the company, products, markets served, etc.
  • Resources and Competencies
    • Consider what the company currently possesses by answering the following:
      • What are we good at?
      • What is special about us compared to current and future competitors (in general terms do not need to mention names)?
      • What do we do that gives us a competitive advantage?
    • Consider the questions above in term of:
      • people, products, financial position, technical and research capabilities, partnership/supply chain relations, others
  • Environment
    • Consider the conditions in which company operates including:
      • physical (e.g., facilities), equipment, political regulatory, competitive, economic, technological, others

Part 2: Situational Analysis

The situational analysis is designed to take a snapshot of where things stand at the time the plan is presented. It covers much of the same ground covered in the Preparing Market Study Tutorial, so those preparing a Marketing Plan should check this out as well.

This part of the Marketing Plan is extremely important and quite time consuming. For many, finding the numbers may be difficult, especially for those entering new markets.  Anyone in need of numbers should look the Finding Seconday Research Tutorial, which may offer ideas for locating the numbers Marketing Plan writers may need.

The situational analysis covers six key areas: product, target market, distribution, competitors, financial and other issues.

1. Current Product Analysis
(May be able to skip this section if plan is for a new product and no related products exist.) Provide detailed analysis of the company’s product(s). (Length: 1-2 pages).

• Describe the company’s current product(s) offerings in terms of: 
  • Product Attributes
    • Describe the main product features, major benefits received by those using the product, current branding strategies, etc.
  • Pricing
    • Describe pricing used at all distribution levels such as pricing to final users and to distributors, incentives offered, discounts, etc.
  • Distribution
    • Describe how the product is made accessible to final users including channels used, major benefits received by distributors, how product is shipped, process for handling orders, etc.
  • Promotion
    • Describe promotional programs and strategies in terms of advertising, sales promotion, personal selling and public relations, how product is currently positioned in the market, etc.
  • Services Offered
    • Describe support services provided to final users and distributors before, during and after the sale

Part 2: Situational Analysis

2. Describe the Current Target Market(s)
Examine in detail the company’s current target market(s). Obviously to do this section correctly takes a great deal of customer-focused research. (Length: 2-3 pages).

• Describe the target market approach:
  • What general strategy is used to reach targeted customers? Generally approaches include:
    • mass market – aim to sell to a large broad market
    • segmentation approach – aim to selectively target one (niche) or more markets
• Describe demographic/psychographic profile of the market:
  • Profile criteria may include:
    • gender, income, age, occupation, education, family life cycle, geographic region, lifestyle, attitudes, purchasing characteristics, etc.
• Describe the following characteristics of targeted customers:
  • Needs/benefits sought by market
  • Product usage
    • Consider answers to these questions related to customers using the product such as:
      • who is using the product?
      • why do they use the product?
      • when do they use the product?
      • how is the product used?
  • Product positioning
    • Evaluate how customers perceive the product in relation to competitor’s products or to other solutions they use to solve their problems
  • Attitudes
    • What is the target market’s attitude regarding the company’s product?
    • What is the target market’s attitude regarding the general product category?
      • i.e., exam the general attitude regarding how products from all companies serve the target market’s needs
• Describe the purchasing process:
  • How does the target market make their purchase?
    • What does the decision-making process involve?
    • What sources of information are sought?
    • What is a timeline for a purchase (e.g., impulse vs. extended decision-making)?
  • Who makes the purchase?
    • Does user purchase or is other party responsible (e.g., parent purchasing for children)?
  • Who or what may influence the purchase?
• Provide market size estimates:
  • Keep in mind these are estimates for the market not for a specific product
    • Provide size estimates for the potential market
      • What is the largest possible market if all buy?
    • Provide estimates of size for the current target market
      • What percent of the potential market actually purchased?
    • Provide estimates of future growth rates
      • At least through the timeframe for the plan (e.g., 1 year) but most likely longer (e.g., 3-5 year projections)

Part 2: Situational Analysis

3. Describe Current Distributor Network (if appropriate)
Evaluate how the company’s product(s) is distributed. Clearly marketing plans for a service company may not have much detail here but this section will most likely have some relevance even for service firms (e.g., package delivery services, online legal service, etc,). (Length: 2 pages).

• Describe the channels/supply chain employed to sell and deliver the product: (Note: internal sales force discussion should appear under company promotion in Current Product Analysis above.)
  • Options may include:
    • direct to customer
    • indirect via a distributor
    • combination of both
• What are the needs/benefits sought by distributors?
• Describe the product’s role within the distributor network:
  • How is this product used within the distributor’s business?
  • How important is product within the distributor’s strategy?
  • How is product positioned?
    • e.g., how does distributor view product in relation to competition
  • Attitudes and perceptions about company's product(s)
• Purchase process
  • How does distributor network make their purchase?
  • Who or what influence distributor’s purchases?
• Demographics
  • Who makes up the distributor network?
    • types
    • size
    • geographic region
    • markets served

TO BE CONTINUED.......................................