Write a Marketing Plan to Take Your Product From Good Idea to Profits
By Jacquelyn Lynn
Your marketing plan doesn’t have to ever make the best-seller list, but it does have to be written well enough that you have a clearly-drawn map to guide the marketing side of your business. It’s an integral part of your overall business plan, an essential component to taking your company from a “good idea” to a profitable operation, and evidence to funding sources–both lenders and investors–that you have thought through how you will ultimately sell your product or service and make money doing it.
No two marketing plans are exactly alike, but the ones that work all contain the same fundamental elements. Follow this basic structure:
Define your product. You need to know precisely what your product or service is and what it will do for your customers. Be very specific. Successful marketing requires a solid understanding of the features and benefits of every aspect of your product.
Identify your customers. Who will buy your product, and why? Again, be specific. Where do these people live and work? How much money do they make? How often will they buy? Understand various buying sensitivities, such as the importance of brand, location, guarantee and price.
Identify your competition. Know your competition as well as you know yourself. Who else sells what you sell? Where are they? How do they market? How similar are their products? What are the comparative advantages and disadvantages between what they do and what you plan to do? What is their pricing structure? What do their customers like and dislike about them? What would make their customers buy from you instead?
You may believe you don’t have any direct competition–that is, no one else in your market is doing exactly what you do. But if that’s the case, how do you know there’s a need for your business? And how are your prospective customers getting that need met currently?
Set your prices. How much you charge affects both your profitability and your position in the market. Understand what your costs are, what competitors are charging, and how your price relates to your overall marketing strategy.
Explain how you will interact with your customers. This includes the general promotion of your business as well as the actual sales process. How will prospective customers learn about you? What will drive them to you? Will you advertise? Make personal calls? Put up clever signs? Use the internet? Will you have a retail store front, be in an office complex or industrial park, or are you going to be home-based? Once a potential customer becomes aware of what you have to offer, how will you convert them from prospect to buyer? How will they actually receive the product–will they come to you, or will you deliver?
Develop a very specific plan and plot it out at least one year in advance. Incorporate what you’ll do for holidays and other special dated events, such as trade shows. Consider necessary lead time; for example, if a Yellow Page ad or special directory ad is important to your overall marketing plan, what is the deadline for placing the ad and when will the new directory be distributed?
Along with what you’re going to do, calculate what it will cost and what you expect the outcome to be. Though you can’t always accurately predict results, you should have a sound rationale for spending money before you do it. The cost of marketing will vary by industry, but a general average is five percent of sales. Regardless of how much you spend, spend it on the methods that will give you the biggest return on your marketing investment.
As you develop your plans, keep in mind that this is not a linear process. For example, you may begin with a particular product, then as you study the demographics of your market, realize that you can capture a greater share of that market with a few product adjustments. It’s possible that what you learn by studying your competition may prompt you to make changes in your plans for interacting with your market. You need to also incorporate your production capacity into your marketing plan–do you have the capability to produce a sufficient amount of product to meet your sales projections?
This is why you should give yourself a lot of physical room as you develop your marketing plan. Even if you’re using a business plan program on your computer, make notes on large sheets of paper and paste them up on the wall so you can easily see how each portion of the marketing plan interacts with the other. Though these software products vary in depth and quality–many are excellent–the basic physical limitations of a computer monitor force you to focus on one element at a time and don’t allow you to see the overall picture without printing out your plan.
Jacquelyn Lynn is the editor of Flashpoints newsletter. Flashpoints is a comprehensive information resource for business owners and managers who want to take their operation to the Flashpoint. Visit http://www.theflashpoints.com to sign up for a free subscription to Flashpoints newsletter plus an extra free gift: The Mindset of High Achievers by JK Harris and Jacquelyn Lynn.
In addition, Jacquelyn Lynn is the author of more than 20 books, including Entrepreneur’s Almanac; Online Shopper’s Survival Guide; Make Big Profits on eBay (with Charlene Davis); In Search of the Five-Cent Nickel (with Don Abbott); and 11 titles in Entrepreneur Media’s StartUp Guide series. Visit http://www.jacquelynlynn.com for more details.
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