The first step is to define what
business you are in. This can be done in many different ways.
Vision is an important part of defining
what business you are in. For example it opens opportunities to say you
are in 'consumer beverages' than in 'fruit
juice' or in 'business communications equipment' and
not 'fax machines'. The next step is to write a mission
statement. This is a statement of the business's reason for
existence, what it wants to accomplish and be recognized for. The business definition and mission
statement make it much simpler to select and evaluate appropriate
long-term goals for your business.
Mission statements do not bind your hands. They liberate you from continually grappling with day-to-day strategic decisions. The mission statement should include self, community and employee values, benefits, and not just plain commercial goals. A mission statement says what your company 'stands for' in the marketplace and the broader community. Well-chosen and relevant words create a mental image that provides a sense of direction, a purpose and energy to what the enterprise does.
Target Markets
Definition: A target
market is a well defined set of customers whose needs you intend to
satisfy>
You can break your market up
further by defining target markets within market segments and sub
segments. For example, you could refine customer profiles by age,
gender, income groups, and other demographics. But first you need to understand who your current customers are:
You can't specify target markets without detailed knowledge
about your current customers. Target marketing is an ongoing process. Who is most likely to buy from you? These people are at the centre or
bull's-eye of your target market. They should be defined by
the following criteria:
Geographics : The location,
size of the area, density, and climate zone of your customers. Demographics : The age,
gender, income, family composition and size, occupation, and education
of your customers. Psychographics : The general
personality, behaviour, life-style, rate of use, repetition of need,
benefits sought, and loyalty characteristics of your customers. Behavioural : The needs they
seek to fulfil, the level of knowledge, information sources, attitude,
use or response to a product.
Business markets : Type
(manufacturer, retail, wholesale, service), industry, size of business,
financial strength, number of employees, location, structure, sales level, special requirements, distribution patterns.
You could take this further by
identifying the factors that influence them to buy particular specific
products such as safety, comfort, prestige, performance, and other
lifestyle considerations. When you have done this, you have a clearer perspective as to how you
can efficiently reach and appeal to these groups through personal
selling, advertising or promotions. Target marketing can be compared with going hunting with a rifle
(accurately targeted) as opposed to a shotgun (does the job but with
extensive overflow).
Always aim for the
bullseye of your target market for the most effective marketing results.
One of the best ways to identify
your target market is to look at your existing customer base. Who are
your ideal clients? What do they have in common? If you do not have an
existing customer base, or if you are targeting a completely new
audience, speculate on who they might be, based on their needs and the
benefits they will receive. Investigate competitors or similar
businesses in other markets to gain insights.
Marketing Objectives
Marketing objectives
define what you want to achieve in the market
You need to think carefully
about what your marketing objectives should be. Remember these are marketing objectives
not
sales, advertising or profit goals.
Marketing objectives need to be
defined in terms of what you want to achieve in the market overall .
Everything else in the plan flows from the objectives you set.
Each strategy you devise in the
plan will be based on achievement of the marketing objectives you set.
Increasing market share,
expanding into new geographical markets or product segments,
introducing new products, attracting new users, increasing your brand
awareness or changing your brand image, are all typical marketing
objectives.
Marketing objectives should be
easy to understand, quantifiable and set within given time frames so
that progress against the objectives can be easily measured. They
should be realistic and achievable while stretching your resources
within reasonable limits.
The more specific your
objectives are – the better.
Most marketing objectives fall
into four broad categories.
The template below may help you
to identify the type of objectives it would be sensible to set.
The matrix above provides a
framework
in which marketing objectives can be developed and indicates potential
opportunities in four main categories:
Sales and profit goals
This is a summary of your individual
products or services showing a break down over the next three to five
years by your forecasts showing:
Turnover
Contribution to overheads
Gross profit (or loss)
The schedule is a flow-on from the
conclusions you have drawn and the strategies you intend to follow. It
indicates where you will be directing your efforts in terms of
investment and development.
What has occurred in the past is
always the most logical starting point. It is always better to err on
the conservative side with your estimates while remaining in keeping
with the resources you have allocated.
You may need to constantly
'revisit' the goals you have set as market conditions
improve or deteriorate. This may lead you to changing or fine-tuning
some of the strategies you have previously developed.
Remember the plan is a flexible changing document with each part interactive with all or some of the others.
Market research
'Most people use statistics the way a drunkard uses a lamp post, more for support than illumination'.
Mark Twain
Marketing professionals maintain that marketing plans should begin and end with market research. First you research what you should be doing. Then after implementation you research to determine if you have achieved what you set out to do.
You cannot know too much about your customers and prospects.
This calls for market research. Facts
and figures are much better than guesses and estimates. There is no
substitute for hard data although where these are not available,
informed estimates are much better than nothing at all.
You have to know how your customers
and potential customers perceive the value of your products and
services to make good marketing decisions. If you don't know how
your company and its products are perceived, you will waste time and
aim the wrong products at the wrong markets at the wrong time.
There are many forms of market
research. It can be as simple as analyzing your internal sales records
by geographic area, average prices obtained, revenue by product group,
etc.
You could undertake a survey among existing customers to determine the level of satisfaction with your products/services.
qualitative
You could engage the services of a market research firm to conduct statistically valid qualitative
Market research provides answers to questions such as:
Information about the buyer
Information about the product
Information about the competition
Market research provides objective
answers to consumers' reactions to product concepts, packaging,
advertising and promotion, pricing and almost any other aspect of your
marketing programs.
You should start your market research
by asking questions of your customers, sales force or suppliers. Anyone
who has an interest in your products or services may have valuable
information to contribute.
Market research is as close as
marketing gets to being a 'science' however it should
always be used judiciously as a source of clarification – never
as a substitute for executive judgment and decision-making.
Strategies
All strategies employed in the plan should be complementary and synergistic
This sets out how you are going to
achieve your goals. It includes definitions of your objectives and
which elements of the marketing mix you have selected to achieve your
sales and marketing goals.
Marketing strategies can be broadly classified as 'above the line' or 'below the line'.
'Above the line' relates
to media advertising such as in newspapers, magazines, TV, radio,
outdoor or transportation.
'Below the line' refers to
all other promotional activities including price oriented special
offers such as 'two for the price of one', deals and
allowances in which consumers are offered discounted prices for a
limited period, point-of-sale advertising, competitions and contests,
customer promotions in which floor space is negotiated for special
displays, and direct (or data base) marketing.
As a rule of thumb fast moving
consumer goods (FMCG) marketing budgets are often allocated 50/50 above
the line/below the line. Industrial and business-to-business products
(B2B) and services may weight the split more heavily to 'below
the line activities – possibly as much as 10/90 above/below the
line.
As a conductor directs an orchestra,
part of the secret of a successful marketing plan is to get all of the
components of the plan in synergistic harmony. For example, pricing,
advertising, sales promotion and packaging should all be making the
same statement about your product or service.
Strategies can be broken down into one
of four categories known as the 4 P's of Marketing. The
4P's constitute 'the marketing mix' as described in
the following section.
Product Life Cycles
Before framing your strategies, consider where your product is in its life cycle
Before starting out to frame your
strategies under the 4P's, you should first consider where your
product or service is in its life cycle. When exploring what mix
is most appropriate think about which of the following phases best fits
your circumstances.
Introductory Phase
Growth Phase
Maturity Phase
Decline Phase
