Every start-up venture needs a business plan, yet many entrepreneurs don't realize a marketing plan is equally vital.
Unlike a business plan, the marketing plan focuses on the customers. A marketing plan includes numbers, facts and objectives, but it is not primarily numerical; it is strategic. It is your plan of action-what you will sell, to whom you will sell it and how often, at what price, and how you will get the product to the buyer. Here's a closer look at putting together a marketing plan that works.
Step One: Define your product. The first part of the marketing plan defines your product or service and its features and benefits in detail, then shows how it is different from the competition's. The more clearly and succinctly you describe your product in your marketing plan, the better you'll communicate with your target customer.
Markets and products have become extremely fragmented. There are hundreds of special-interest magazines, for example, each targeted to a very specific market segment. It's the same with restaurants, cars and retail clothing stores, just to name a few industries.
Positioning your product competitively equires an understanding of this fragmented market. Not only must you be able to describe your product, you must also be able to describe your competitor's product and show why yours is better. Positioning your product involves two steps. First, analyze your product's features, and decide how they differentiate your product from its competitors. Second, decide what type of buyer is most likely to purchase your product. Pricing and placement are critical to competitive positioning. In today's marketing culture, pricing cannot be separated from the product.
Take grocery stores, for example. The full-service supermarket is still the most popular form of grocery distribution. But today, busy families want faster service and more convenience, even if it means higher prices. As a result, convenience stores, home delivery services, personal shoppers and takeout restaurants have proliferated. At the same time, warehouse grocery retailing has also increased. Warehouse stores cater to customers who prefer low prices to convenience.
Service, distribution and price are the essential elements of the products offered by supermarket, convenience and warehouse stores. To develop a successful marketing plan, you need to analyze how these same elements fit into your business. What are you selling-convenience? Quality? Discount pricing? You can't offer it all. Knowing what your customers want helps you decide what to offer.
Step Two: Describe your target customer. Developing a profile of your target customer is the second step in an effective marketing plan. You can describe customers in terms of demographics-age, sex, family composition, earnings and geographical location-as well as lifestyle. Ask: Are my customers conservative or innovative? Leaders or followers? Timid or aggressive? Traditional or modern? Introverted or extroverted? How often do they purchase what I offer? How much of it at a time? Are there peak buying periods or times of the year when people won't buy my product or service?
Step Three: Create a communication strategy. Your target customer must not only know your product exists but must also have a favorable impression of its benefits. Communication includes everything from logo design and advertising to public relations and promotions.
Find out what your target customers read and listen to. You need to know this to get their attention. In addition to where to place your message, consider how frequently customers need to receive it. This part of the marking plan should spell out your promotional objectives. What do you want to achieve? Do you want people to recognize your company name? Know where you're located? How much money can you spend to get your message across? What media are available, and which will work best? Finally, how will you evaluate the results?
Ask yourself the right questions and analyze your answers, and you'll come up with a marketing plan that will help you achieve your goals.
Excerpted from Start Your Own Business: The Only Start-Up Book You'll Ever Need, by Rieva Lesonsky and the Staff of Entrepreneur Magazine, © 1998 Entrepreneur Press