The need for a marketing
plan grows as a business develops new products, enters new markets and
refines how it attempts to position and sell its products. The structure
of a marketing plan is similar to a business plan, but focuses more on
how specific products and the operations surrounding those products instead
of the entire business as an entity.
A marketing plan can
serve as the tool to evaluate the potential for products, a guideline
for the rational development of new products and as a way to decide on
marketing strategies and tactics for specific products. Components of
the marketing plan may be incorporated into the business plan and together
they can serve as valuable tools in the short-term and long-term managing
To prepare you marketing
plan, you may want to initially organize it in a three-ring binder with
each of the numbered items as separate sections. Your marketing plan should
be a "living document" that is reviewed often and modified as
needed. Using a binder will enable you to easily make changes. You can
always print the current plan for formal presentations.
1. Executive Summary
This section should summarize the entire marketing plan. Any reader of
the plan will read this section first and it should enable the reader
to put each of the following sections into an overall perspective. It
- Concise description
of your product.
- Explanation of
how your product is different (better) than those of your competitors.
- Your product's
- Your objectives
for the product.
- Financial implications,
including capital needed and expected sales and profits from the product.
This section will
probably be the most memorable part of the entire document so must be
accurate, well constructed and persuasive. While it should be at the beginning
of your plan, it should probably be the last part written.
2. Product Description
In this section you want to start building the case for your product.
It should include enough specific information on the product so the reader
has enough information to understand why your product is a valid opportunity
for your business. A paragraph on product details and another paragraph
summarizing the opportunity will probably be enough. This section really
just lays the groundwork for the following detailed descriptions of the
market opportunity, the competitive challenges, how the product will fit
into the rest of your operations, what you intend to accomplish with the
product and how you intend to reach your financial objectives.
3. Market Analysis
This section is probably the most important part of the plan. The information
you provide should illustrate the size of the overall product category
and potential for your product, justify why your product should be considered
as an opportunity within that category, describe the scope and characteristics
of the potential market and identify the key factors buyers consider when
making a purchase decision.
When describing the
overall market, try to use market statistics from reputable and recognizable
sources. Industry studies from trade associations are often available
and they may include historical and projected market trends that will
add credibility to your plan. After describing the overall market, you
then need to justify why you will be able to gain a position within the
market and estimate how large of a share is possible.
The description of
your target market should include any geographic or other barriers you
may face and how you will address those challenges. Describe the potential
buyers of your product as completely as you can. This includes the ages,
cultural specifics, income categories, sex and martial status of the buyer,
education level, household characteristics, occupational characteristics
and any other information that demonstrates that you fully understand
who the buyer of your may be.
You then need to describe
the decision making process of your potential customers. Is your product
a necessity or a luxury? How often is the product purchased? Are potential
customers most influenced by price, quality of the product or the service
they receive when buying?
You must also address
the potential for outside factors to have an impact on sales of your product.
Are sales influenced by general economic conditions? Can your product
become obsolete easily? Are there legal or regulatory issues to be considered?
This section should deal with the competitors you will face in the market.
Along with just identifying competitors, you should identify their strengths,
weaknesses and how they operate in the market. Also, be sure to rank them
in the order of how you perceive their strength in the market and also
identify any potential competitors that your foresee entering the market.
You should use this section to demonstrate your competitive advantage,
or why your efforts will be successful in light of the competition.
The process of determining
the strengths and weaknesses of your competitors will be extremely helpful
in determining your overall marketing strategy (how you position your
product in the market) and the specific tactics you will use to implement
your strategy. You will identify ways to combat the strengths of your
competitors and take advantage of their weaknesses. In addition, by understanding
how they attempt to sell into the market, you can learn what works and
what does not work.
Establishing a foothold
in a new market or gaining share means that you must take business away
from your competitors. If competitors have used a specific marketing tactic
successfully, consider copying it. If several competitors have tried a
tactic and it has not worked, learn why it was unsuccessful. If there
was a flaw in it, you may be able to implement the same tactic without
the flaw and find success. However, if their tactic was well executed
and still unsuccessful, be very wary of trying it again. Why would you
be successful if they were not?
5. Product Development
This section should provide details on how your product will be developed
or enhanced to better compete. Include a description of the current status
of your product and your plans for its ongoing development. Timelines,
costs, personnel needed and details on how the product will come together
will enable the reader to put this product into the broader context of
your company's operation.
If this product represents
your entry into a new market or an entirely new type of product for your
company, identify the risks associated with its development. If you anticipate
that timeline will be long or that the product may not ultimately be able
to be produced, be sure to identify how and when a decision to abandon
the product would be made. If the costs and efforts of developing the
product risk the ongoing viability of your company, you should be ready
to make the necessary decisions.
This section will describe how this product will fit into the overall
operations of your company. Be sure to address the following issues:
- Is it an extension
of an existing product line or something entirely new?
- Will you need additional
personnel with specific skills and are they available?
- Will you need additional
space or a different location?
- Do you have the
management staff in place to handle the development, marketing and ongoing
support of the product?
- How much will it
cost and do you have the financial resources to handle the new product?
7. Goals and Objectives
Detailing your aims for this product is important for several reasons.
- The financial goals
for all of your individual products will identify your plans for the
financial growth of the company as a whole.
- The financial goals
for the specific product should demonstrate the economic viability of
the product individually and hopefully how this product can provide
a positive synergistic benefit to the company. For instance, if the
new product opens an entirely new market, perhaps that new market could
be an outlet for other products as well.
- The developing
of the new product may strengthen the company by adding capable personnel
whose skills can be utilized throughout the company or by utilizing
- There can be non-financial
benefits associated with developing a new product and you should be
sure to spell them out in this section.
The quantifiable goals
and objectives to include in this section should include the anticipated
costs to develop the product, your expected sales of the product and if
possible your estimates on the share of market you expect to achieve with
the product. These financial goals and estimates should be built into
a timeline. That way you can track your progress as the product is developed
8. Marketing Tactics
With the work you have done up to this point, you will have probably already
identified many of the specific tactics you intend to use to introduce
the product and promote it on an ongoing basis.
Mapping out and deciding
on your marketing tactics requires you to consider several issues:
- Introductory versus
ongoing efforts. Introducing a new product can take different types
of activities than are needed once the product has established a foothold
and is well known by potential buyers.
- Positioning of
your product. How are you going to differentiate your product from those
of the competitors? What is your competitive advantage and how are you
going to make potential customers aware of it?
- Pricing. Determining
a price can be difficult, especially if the product is substantially
different from those of your competitors. Your pricing decisions will
also be influenced by your long term goals for the product and your
company. Initial pricing, price adjustments, volume discounts and profitability
must all be considered.
- Distribution channels.
Who exactly is going to sell your product and how are they going to
Have you identified the major distributors and determined if they
are willing to represent your product? How will you educate or train
these distributors or representative?
Internal sales force. Do existing sales representatives
have the time, expertise and contacts to be successful? How will the
new product be integrated into their compensation system? This becomes
very important if you plan to provide an additional incentive for this
product and try to ensure that other product sales are not neglected.
Retail distribution. If you already have existing sales
locations, have you planned on space and promotional displays to introduce
Direct distribution. How will you make potential buyers
aware of the product?Have you considered the need for direct mail, advertising
and Internet efforts?
- Corporate driven
activities to market the product. Using advertising and public relations
efforts can be effective for new product introductions. If you plan
on these, have you identified the agencies that will do the work or
are you going to handle them internally?
9. Financial Information
This section will be reviewed very closely, especially if you plan to
use the marketing plan to secure financing. At a minimum, you will want
to want three year projections for the product, including volume projections
(dollars and quantities), net income projections for the product and cash
flow projections. You may even want to break down your projections on
a quarterly or month-by-month basis.
Conclude your marketing plan by highlighting the product's potential,
the competitive advantage your product has compared to the competitors'
and the positive impact it will have on your company. The summary does
not have to be long. Two or three paragraphs may be enough.