Planning Success: 5 Critical Steps To Creating A Marketing Plan

Effective Market Plan OutlineIs your sales team expert at getting around, through or under the walls customers put up? Marketing can help identify and guide the sales team to the best walls to attack. Plus help supply the tools to be even more effective in winning the customer’s attention and, ultimately, their business.

Having a marketing plan forces you to take the time to understand and identify those customers and tools that will have the greatest return – as well as understand the resources necessary for success.

Effective marketing plans are very detailed. They force you to stop and take a snapshot of the marketplace, your customers, competitors and products. With that starting point, they help you define your goals and the path to achieving them.

This guide is an outline to help you put together a comprehensive, strategic and effective blueprint for your business.

Planning for success: your guide to preparing an annual Marketing Plan

There are many steps and details involved in fleshing out a comprehensive and compelling marketing plan, so here are some general guidelines to think about as you get started.

The first step to Marketing Plan success is fully understanding the Situation Analysis

The path to an effective Marketing Plan starts with knowingwhere you are goingThis is an analysis of where we are (ourselves, our competition, our market, our distribution) and how we got there. It should be factual and objective. If possible, your data should reach back at least three to five years. The further back in time your data goes, the more meaningful will be your trend lines. Select what is most meaningful, focusing on those areas where your patterns differ from your competition.

  • The size, scope and share of the market
    • Sales history of yourself and competitors, and share of the market, in dollars and units
    • Market potential and major trends in supply and demand of this and related products
  • Sales, costs and profits of your product
    • Sales history, by sizes or models, by sales regions
    • Cost history, including cost of goods delivered, selling, advertising, administrative, and all other expenses
    • Profit history (not profit on sales and on investment), including competitors if known
  • The distribution channels
    • Identification of principal channels, with sales history through each type including competition if known
    • Buying habits and attitudes of principal channels, your product vs. competitors
    • Your selling policies and practices, in comparison with competitors
    • Trade advertising, literature, samples and displays
  • The consumer or end user
    • Identification of person making the buying decision
    • Consumer attitudes of your product vs. competitors, on quality and price
    • Consumer purchase habits including factors as time of purchase
    • Consumer use habits
    • Your marketing, packaging, promotional and advertising history
    • Website, social media, PR and other educational influences
  • The product
    • Story of your product – quality development, design, sizes or models, delivery and service
    • Comparison with competition and evidence of performance
    • Product research and product improvements planned

The next step to building an effective Marketing Plan is identification of problems and opportunities

  • What are the major problems that are restricting your profit or impeding your growth?
  • What opportunities do you have?
    • Overcoming the above problems?
    • Modifying products, streamlining the product line, or adding new products?
    • Increasing your market penetration or developing new markets?
    • Improving the efficiency of your operations?

Now it’s time to think through where you want to go by creating objectives for your Marketing Plan

  • Creating an Effective Market Plan OutlineYour assumptions for future conditions
    • Level of economic activity
    • Favorable/unfavorable legislation
    • Level of industry activity (market forecast)
    • Activities of competitors: product innovation, marketing strategy, pricing, etc.
    • Changes in customer needs for your products
    • Changes in distribution
    • Changes beyond your control in your own cost of product and sales
  • Your primary objectives
    • Sales and share of market objective
    • Profit objective
    • Turnover objective
    • ROI objective
  • Overall strategy for achievement of primary objectives
    • Sample statement strategy: Shift sales emphasis from product line A to product line B. Emphasize penetration of key market areas X, Y and Z. Reduce capital employed by bringing accounts receivable back to standard P.
  • Functional (departmental)objectives
    • Sales objectives by product and by market
    • Distribution objectives
    • Advertising and promotional objectives
    • Customer service objectives
    • Pricing objectives
    • Product modification objectives
    • New product objectives
    • Product deletion objectives
    • Expense control objectives
    • Manufacturing objectives (plant additions, capacity utilization, unit costs, etc.)
    • Personnel training objectives

Understanding how you are going to get there is the role of action programs in your Marketing Plan

Put Your Marketing Plan Into ActionHere you will detail the specific action steps, priorities and schedules relating to each of the functional objectives. If, for example, one of your objectives for sales was to “increase sales of product X,” now is the time to pinpoint specifics from what will be done, by who, to increase sales with specific customers.

If one of your objectives was to “introduce a new product by X date,” now specify development cost and deadlines, production planning, schedule, market introduction plans, advertising and promotional support, sales and service training needed, etc.

Most of this programming should be delegated and worked out “from the bottom up” rather than from the top down.

Don’t skip the control and review procedures step in creating your Marketing Plan

How do you determine your pricing?  It’s probably a rigorous process, but is it science or art?Decide how you will monitor the execution of your plan once it is set in motion.

  • What kinds of “feedback” information should be rendered periodically to each responsible person so that actual progress can be evaluated against the plan expectations?
  • How frequently should each element of control be reviewed?
  • How should the carious elements of control information be “packaged” so that they:
    • Can readily understand them
    • See important pieces of information simultaneously and in their relationship to each other, so as to determine what corrective action should be taken?
  • Set a date for a full scale review of progress vs. plan

While creating a marketing plan is never a simple task, the process will force you and your team to evaluate the opportunities – and challenges – that your business faces. And because the marketplace is never static, this should be a living document, periodically being reviewed and updated. It never should become a binder sitting on the shelf.

Good Selling!

 

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Are You Pricing with Your Customer’s Profitability in Mind?

Are You Pricing with Your Customer’s Profitability in Mind?How do you determine your pricing?  It’s probably a rigorous process, but is it science or art?

Do you start with your profitability and go from there? Or do you start with the market price and let your profitability fall wherever it may?

Neither approach alone will help you win in the marketplace. Because neither approach puts your customer‘s profitability into the picture.

Use a pricing strategy that considers your customer’s profitability

Use a pricing strategy that considers your customer’s profitabilityDelivering a market price to your customer will certainly be geared toward improving your top line. Here the logic is that your customer will be looking closely at a few high volume, highly competitively priced products to evaluate your overall pricing proposal.

If you price those product “footballs” correctly, everyone seems to wins. You get the business and they get the pricing they need to be competitive in the marketplace.

But that strategy embodies the whole point of pricing – that your customer is competitive in the market. If they are making the money they need to be successful, you will stand out.

But are you making the money you need to stay in business?

Take a P&L approach to pricing

Take a P&L approach to pricing

It’s no surprise that there’s no one sure way to approach pricing. It really is part science and part art.

But do you approach the science part with a fact-based strategy? To do that, you need to be able to answer a few simple questions:

  • What is the product’s market price?
  • What is the customer’s margin % expectations
  • What can we make?

As one senior leader recently commented to us about pricing: “If you manage pricing from only your profitability – you’re going to be dead.”

Which is why pricing is art as much as science.

Inside of a company, pricing is really a continuum

How do you determine your pricing?  It’s probably a rigorous process, but is it science or art?The sales team is, understandably, all about making the sale. They want a price that will help them achieve that goal.

On the other hand, the product marketing team is looking to get credit for the innovation they are bringing to the marketplace. They want to get paid a premium.

Straddling both sides of the fence is channel marketing (also called trade or customer marketing depending on the company). Channel marketing sees both sides of the fence, is grounded in reality, and keeps perspective throughout the process.

Having a group like channel marketing manage your pricing is the secret sauce. They have perspective, collect all the facts, and keep the customer’s profitability balanced with your own profitability.

For other Channel Instincts posts on pricing, see What Does “Your Price Is Too High” Really Mean?, Is Pricing Making You Go Bananas? and Are You Pricing for Volume or Profit?

Good Selling!