Marketing plan

A marketing plan is a long-term planning document that outlines, typically over a period of one year, business goals and objectives as well as the time and money one is expected to spend to achieve those goals. Marketing plans typically lay out the activities and tactics involved in accomplishing specific objectives, such as increasing revenues or acquiring new customers. It typically involves a fair amount of analysis, both internal and external, to determine the strengths and weaknesses of a given business and measures those things against competitors. Good marketing plans view the businesses they support from the perspective of the end user, or consumer, to try to determine what their customers really want and need.

Marketing plans utilize information the business has gathered about itself and its customers, competitors, and target markets over time to come up with measurable goals. Business executives then plan and implement the marketing and sales tactics, taking into account budgetary and financial matters, to help their firms to achieve or surpass goals. Success is measured periodically and the marketing plan is designed to be an ongoing tool to help a business compete effectively. Marketing plans are meant to be revisited, reworked, and recreated as often as necessary.

Background

Marketing itself is a very young discipline. It did not really emerge until about 1900. In the early days of industrialization and mass production, companies did very little to create demand. This philosophy, known as the production concept, was prevalent until the 1920s. Manufacturers believed that a steady supply of affordable products would in itself create demand, so they spent very little time and resources actually analyzing customer needs. Beginning in the 1930s, when demands for products and services were largely met, companies started to promote their products through advertising and personal persuasion. This became known as the sales concept. Producers still did not care whether a product actually fulfilled a need; their goal instead was simply to beat the competition.

As disposable incomes increased in the years immediately following World War II, the newly empowered consumer could suddenly afford to be selective about purchases. Under the marketing concept, a philosophy implemented about this time, producers began to ask what their stakeholders wanted and then set out to develop the products they thought would fulfill those desires. This was the birth of marketing.

Marketing was largely developed because of a need to create competitive advantage by better understanding the relationships between sellers and buyers. After extended academic studies conducted by major universities, sellers of goods and services realized they could significantly improve their relationships with their customers by adopting certain tactics and strategies, rather than focusing solely on moving as much product as possible. Consequently, little attention was paid to relationship building to secure customers for the long term. But as times changed, consumers began to grow tired of traditional selling strategies. With increased competition across a multitude of industries, organizations looked to potential buyers to find ways to improve. What they discovered was that the most successful marketing plans were the ones that actually accounted for the customer's needs and wants.

Overview

Many marketing plans begin with the marketing team taking the time to identify a business's strengths, weaknesses, opportunities, and threats; this is known as a SWOT analysis. Inc. magazine defines four specific threats to any business operation: direct competition, indirect competition, market contraction, and self-inflicted wounds. In the case of direct competition, a known competitor might adjust its pricing or a new competitor might be undercutting existing prices. Additionally, a new purchasing manager for a long-time client might begin to direct contracts to other suppliers. Indirect competition arises when new technology emerges that can threaten an existing business, and external market forces may cause general shifts in a target audience's spending habits, which may lead to market contraction, or slowing demand. These challenges may be self-inflicted if a business's internal standards change and customers are left unsatisfied, or if the products and services they provide use old technology.

Once a thorough competitive analysis is completed, marketers can then come up with specific, measurable, attainable, relevant and time-bound (SMART) objectives that will help a business reach a goal such as increased revenue or market share. Examples of measurable SMART goals include a 10 percent increase in revenue, or landing a specific number of new customers in the next twelve months. Other SMART goals outlined in a marketing plan might be to increase the value of the average customer order by a predetermined amount of money. The plan will then proceed to outline the marketing strategy, which will determine which channels a business will use—such as print and broadcast media, press releases, trade shows, and online and social media advertising—to reach its stakeholders. It will also spell out the metrics that will be used to define success and will include a timeline to determine when tasks will be completed, and who will be responsible for them.

Some marketing goals, such as the effectiveness of sales brochures or the placement of certain advertisements, are difficult to measure. Most marketing plans account for such concerns and also consider what would happen if resources were no longer allocated to those strategies.

In many organizations, particularly larger ones, the marketing plan is an essential document that is shared at all levels of an organization. It functions as a company roadmap. The marketing plan is used to determine which products and projects get funded and where company resources are to be allocated over a fixed period of time.

Managers at resource-strapped entities, such as small businesses, might not believe a formal marketing plan is a good use of resources, or they may view it as an unnecessary formality—especially if it pulls resources away from other areas that might make a more immediate financial impact.

Bibliography

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