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The Importance of a Marketing Plan
A marketing plan clarifies the
key marketing elements of a business and maps out directions, objectives
and activities for the business and its employees.
The marketing plan draws on the broader perspectives outlined in a
firm's business plan. The business plan states how a company will take a
product idea and transform that into a commercially viable proposition.
The marketing plan focuses on issues related to the four Ps: product,
price, promotion and place.
Addressing these issues and putting them into written form can be useful
for a business owner, in that it forces them to analyze their business.
It can be good for employees, as the marketing plan can provide them
with essential orientation and be a source of motivation.
Product
The marketing plan identifies the 'hook' for a product or service. Who
will buy it and why? How is it better than its competitors?
Price
What pricing strategy will the company follow for this product? Is the
plan to sell large volumes so that economies of scale can keep the price
low? Or will it be marketed to a niche at a high price?
Promotion
What is the advertising strategy? How will the product be packaged? What
will its marketplace positioning be?
Place
How will the product be distributed? Will it be sold by retail stores or
by direct marketing?
The business should also be assessed with SWOT analysis - in terms of
Strengths, Weaknesses, Opportunities and Threats.
SWOT analysis evaluates a company's competitors and identifies areas of
opportunity that can be exploited and possible commercial threats. It
analyzes a business and how it will fit into the marketplace.
Part of the analysis will focus on internal issues. For example, is a
company hampered by a lack of worker training?
Other analysis will be external. For example, will a company's location
give it any distribution advantages?
The analysis should assess the cost and effectiveness of using a variety
of distribution channels.
It should evaluate geographical issues. Would a product be best marketed
locally or could it be a competitive export? How big a share of the
market does the product need to win? At what point will projected sales
volumes cover production costs?
How will competitors react to the product? Will they try to undercut its
price? What kind of advertising would effectively distinguish a product
against its competitors?
A marketing strategy forms part of a marketing plan. It explains how a
product will be distinguished from its competitors. A sales plan should
then give details of promotional events and campaigns that will deliver
the strategy.
This kind of analysis can't be done on the back of an envelope. Small
business owners could usefully seek advice on all these issues, although
they need to make final decisions, as they have the best understanding
of their product and business.
Useful websites include:
www.sba.gov
www.bplans.com
marketing.about.com
www.canadaone.com
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