Marketing Plan
A marketing plan is a document that lays out the marketing efforts of a business in an upcoming period, which is usually a year. It outlines the marketing strategy, promotional, and advertising activities planned for the period.
Elements of a Marketing Plan
A marketing plan will typically include the following elements:
Marketing objectives of the business: The objectives should be attainable and measurable – two goals associated with SMART, which stands for Specific, Measurable, Attainable, Relevant, and Time-bound.
Current business marketing positioning: An analysis of the current state of the organization concerning its marketing positioning.
Market research: Detailed research about current market trends, customer needs, industry sales volumes, and expected direction.
Outline of the business target market: Business target market demographics.
Marketing activities: A list of any actions concerning marketing goals that are scheduled for the period and the indicated timelines.
Key performance indicators (KPIs) to be tracked
Marketing mix: A combination of factors that may influence customers to purchase products. It should be appropriate for the organization and will largely be centered on the 4Ps of marketing – i.e., product, price, promotion, and place.
Competition: Identify the organization’s competitors and their strategies, along with ways to counter competition and gain market share.
Marketing strategies: The development of marketing strategies to be employed in the coming period. These strategies will include promotional strategies, advertising, and other marketing tools at the disposal of the organization.
Marketing budget: A detailed outline of the organization’s allocation of financial resources to marketing activities. The activities will need to be carried out within the marketing budget.
Monitoring and performance mechanism: A plan should be in place to identify if the marketing tools in place are bearing fruit or need to be revised based on the past, current, and expected future state of the organization, industry, and the overall business environment.
A marketing plan should observe the 80:20 rule – i.e., for maximum impact, it should focus on the 20% of products and services that account for 80% of volumes and the 20% of customers that bring in 80% of revenue.
Purpose of a Marketing Plan
The purpose of a marketing plan includes the following:
- To clearly define the marketing objectives of the business that align with the corporate mission and vision of the organization. The marketing objectives indicate where the organization wishes to be at any specific period in the future.
- The marketing plan usually assists in the growth of the business by stating appropriate marketing strategies, such as plans for increasing the customer base.
- State and review the marketing mix in terms of the 8Ps of marketing – Product, Price, Place, Promotion, People, Process, Physical Evidence, and Performance.
- Strategies to increase market share, enter new niche markets, and increase brand awareness are also encompassed within the marketing plan.
- The marketing plan will contain a detailed budget for the funds and resources required to carry out activities indicated in the marketing plan.
- The assignment of tasks and responsibilities of marketing activities is well enunciated in the marketing plan.
- The identification of business opportunities and any strategies crafted to exploit them is important.
- A marketing plan fosters the review and analysis of the marketing environment, which entails market research, customer needs assessment, competitor analysis, PEST analysis, studying new business trends, and continuous environmental scanning.
- A marketing plan integrates business functions to operate with consistency – notably sales, production, finance, human resources, and marketing.
Structure of a Marketing Plan
The structure of a marketing plan can include the following sections:
Marketing Plan Objectives
This section outlines the expected outcome of the marketing plan with clear, concise, realistic, and attainable objectives. It contains specific targets and time frames.
Metrics, such as target market share, the target number of customers to be attained, penetration rate, usage rate, sales volumes targeted, etc. should be used.
Market Research – Market Analysis/Consumer Analysis
Market analysis includes topics such as market definition, market size, industry structure, market share and trends, and competitor analysis.
Consumer analysis includes the target market demographics and what influences their buying decisions – e.g., loyalty, motivation, and expectations.
Target Market
This defines the target customers by their demographic profile, such as gender, race, age, and psychographic profile, such as their interests. This will assist in the correct marketing mix for the target market segments.
SWOT Analysis
A SWOT analysis will look at the organization’s internal strengths and weaknesses and external opportunities and threats. SWOT analysis includes the following:
- Strengths are the organization’s competitive advantages that are not easily duplicated. They represent the skills, expertise, and efficiencies that an organization possesses over its competitors.
- Weaknesses are impediments found in the operations of an organization, and they stifle growth. These can include outdated machinery, inadequate working capital, and inefficient production methods.
- Opportunities are prospects for growth in the business through the adoption of ways to take advantage of the chances. They could include entry into new markets, adopting digital marketing strategies, or following new trends.
- Threats are external factors that can affect the business negatively, such as a new powerful competitor, legislative changes, natural disasters, or political situations.
Marketing Strategy
The marketing strategy section covers actual strategies to be included according to the marketing mix. The strategy centers on the 8Ps of marketing.
However, firms are also at liberty to use the traditional 4 P’s of marketing – product, price, place, and promotion. The 8 P’s are illustrated below.
The correct marketing mix is determined by the target market. The most expensive options are advertising, sales promotions, and PR campaigns. Networking and referrals are less costly.
Marketers also need to pay attention to digital marketing strategies that make use of technology to reach a wider market and have also proven to be cost-effective.
Digital marketing channels, which became popular in the early 21st century, may eventually overtake traditional marketing methods. Digital marketing encompasses trending methods, such as the use of social media for business.
Other strategies within the marketing strategy include pricing and positioning strategy, distribution strategy, conversion strategy, and retention strategy.
Marketing Budget
The marketing budget or projection outlines the budgeted expenditure for the marketing activities documented in the marketing plan. The marketing budget consists of revenues and costs stated in the marketing plan in one document.
It balances expenditures on marketing activities and what the organization can afford. It’s a financial plan of marketing activities to be carried out – e.g., promotional activities, cost of marketing materials and advertising, and so on.
Other considerations include expected product volume and price, production and delivery costs, and operating and financing costs.
The effectiveness of the marketing plan depends on the budget allocated for marketing expenditure. The cost of marketing should be able to make the company break even and make profits.
Advertising Costs
Media spend: Obviously, media spend is a very big one. The money that you’re spending with the different media outlets in order to put your message out in order to reach out to your target consumers.
Digital content spend: Clearly in the digital age though, digital content spend has become much greater. Again, time was 20 years ago, you would make a television ad, you would make a radio ad, that would be your production cost and you’re done.
In digital, you’re spending far more money, you’re spending far more time developing content, relevant content, engaging content, content that changes, that may be updated on a very regular basis.
And so a significantly greater amount of money is now going into the production of digital content. And that’s something you have to factor into the plan.
Systems: Clearly, you’ve got to have systems that support that.
So not just your overall IT infrastructure systems, but are there systems that you need to utilize in order to reach out and deliver, for example, automated email programs, in order to deliver social media programs? So that kind of system spend is an important component.
People: Are those people, people within your organization? Are they people who are agencies? What resource are you going to need to be able to deliver your marketing plan?
Human Resource Costs
Social media updates: You want to be delivering these on a regular basis, so there’s going to be time spent, there’s going to be people time spent in order to be able to continue to develop those social media updates.
Keyword research: Keywords continually change over time as one does search engine optimization; trying to ensure you got the right keywords, trying to ensure that your bidding on the right keywords with AdWords, for example; doing that research, understanding what those best options are, is an important part of the human cost of time.
Management and iteration: There’s overall management and iteration time, so review meetings, preparation meetings, ensuring that the overall plan is working correctly, or takes up time of the team,
Analysis: You can’t get anywhere if you haven’t analyzed the results of what’s being delivered and been able to do that in a way which is meaningful enough to be able to make decisions.
So don’t underestimate the human resource costs that sit along what many people consider to be the more traditional advertising costs.
Maximize the ROI
It’s also important to identify methods to maximize the ROI. And this is really about continual monitoring and continual adjustment. Again, marketers today are working in a much more fast-moving environment than they were even 5, 10, 15 years ago.
How can you do this?
- Monitor and adjust the spending and to ensure that a campaign is being effective.
- Monitor what competitors are doing
- Listen to customer feedback.
Not everything you do is going to work, and in a digital environment, you’re going to find out relatively quickly what’s working and what’s not working.
So your ability to adjust and adapt – pull spending away from certain areas, increase spending in other areas – is probably one of the most important things to do in order to maximize ROI.
In the pre-digital age, you could set your marketing plan and you could basically go away and come back six months later and see what results had been achieved.
Now, you really can’t do that. You need to be monitoring it on a daily, sometimes even hourly basis, in order to see what metrics are coming back, how you need to adapt, how you need to adjust to get the most out of it.
Measuring the ROI
You can you maximize that return on investment?
Determine benchmark
So determining benchmark data before the campaign starts is really important. What are you expecting to get? What have you got in the past? What have other people delivered in the past? What do you think? What does success look like before you actually start the campaign?
So you actually have something to compare your results to. If your number of acquisitions has gone up by 5% as a result of running a campaign, is that a good number? Do you know if that’s a good number?
Is it a good number compared with history? These are the kind of questions that senior management are going to want to ask and the questions that you need to have thought about in terms of your success rates before you get started.
Measure reach and impact
How many people are you actually reaching and what kind of impact are you having on those people with the marketing activities that you’re implementing? Who are you reaching?
Analyze audience composition
So what is that audience composition and what is that size? If you’re reaching a very large number of people but they’re not people who are in your target, that’s going to affect your conversion rate, that’s going to affect the number of people who are going to come into your business.
Identify the traffic sources
So where is the traffic coming from? Are there really critical referring sites? Are people coming to you through natural search? Are they coming to you through referral sites? Are they coming to you through blogs? Are they coming to you through social media?
Really important, because that shows you which channels you want to be continuing to invest in or increasing your investment in or pulling your investment away from, in order to try and ensure that you’re bringing the right kind of consumers to your site.
Calculate the conversion rate
So what proportion of people are you reaching, what proportion of people are coming to your site or your portal, what proportion of people are ultimately buying something from you?
What level of conversion rate are you delivering? Is that differing by channel? Are you getting more through social? Are you getting more through research?
Because that will help you understand not only the overall ROI that you’re achieving, but where is that ROI being most effective. And as we were saying before, you can then adjust much more effectively in order to ensure you’re getting the most out of your budget.
