Writing A Business Plan: Lesson 4
Marketing For Your Business Plan
Kate Nicewicz, the Director of Graduate Programs for the Tennessee Tech University: College of Business, will be covering the components of marketing that should be included in your business plan.
Test Your Knowledge
To receive credit for taking this course through TSBDC, watch the video and take the quiz that will appear below to demonstrate your knowledge.
Video Lesson Topics
- 5 Basic Steps
- Analyze the Market: The first step is to analyze your customers, competition, and the market condition which is called a situation analysis.
- Strategy: How will you position your products and services within the marketplace?
- Identify Your Tactics: Identifying the consumers, the costs of products and services, the convenience of the products and services, and how will you communicate those products and services to customers.
- Implement Your Market Plan: Which means deciding who you want your message to reach, what you want your message to say, when you need this message to reach them, and where it is going to reach them.
- Budgeting and Forecasting: Budgeting and forecasting future revenue and business goals for your products and services. This also includes describing the measures of success you will use to determine which edits you will need to make to your marketing plan.
- Assembling a Team
To write a market plan, you will want to assemble a team that clearly knows their roles to help you do so. A finance person will be able to allocate budget, measure results, and improve the return on your marketing investment. Someone to assist with market research, would be a great addition, who can also provide customer insights. Make sure to include technical team members such as scientists, engineers, and software developers who create the products and services.You will also need people to represent your design team who will ensure that the intended user experience is delivered. Sales people who will have insight on customers and the competition need to be included. Lastly, you can consider including colleagues in manufacturing and operations or external partners, such as advertising or branding agency or even marketing consultants.
- Data Types to Include
- When writing your market plan you will include important data but you may not have it all at once. This is normal and important assumptions may have to be made, that will be documented in the appendix of your market plan.
- Market Data: Size, fluctuations, trends, economic conditions and regulations that are currently affecting the market
- Market Shares: For your company and competitors and how they are changing
- Competition: What do they offer, how is it priced, how are they promoting it, and what is their unique selling or value proposition
- Analyzing the Market
– Market Analysis: This will give people a sense of how much revenue is at stake. Include information about the total addressable market, which is the total sales of all the companies in your industry and any potential sales to prospective customers. You will also want to detail the theoretical maximum sales to your current and potential customers. By dividing the total industry sales by your total addressable market, you will learn the percentage of total market that has already been reached. A low number is good because that means there is market share to be gained.
– Revenue Market Share: Your company’s total sales for products and services, that you are writing the market plan for, divided by the total market sales equals the revenue market share.
1. Qualified Customers that have not bought anything from you so far.
2. Current local exclusive customers.
3. Customers that are buying from you and your competitors.
4. Customers that buy exclusively from your competitors.
– Competitive Analysis: Your competitors include direct competitors, sell the same product and deliver the same benefits, indirect competitors, sell similar products with different benefits, and substitute competitors, sell unrelated products and have unrelated services that could possibly substitute for yours. To write this analysis compare your company’s size, market shares, strengths, weaknesses, value propositions, and other resources that your company has in comparison with others.
– S.W.O.T. Analysis: Which stands for strengths (the things that your company does well), weaknesses (areas that need improvement), opportunities (favorable situations that can bring in a competitive advantage), and threats (unfavorable situations that threaten your market share) analysis.
– Customer Analysis: This should include a description of your customer including what you know about them, where can you find them, and how many customers do you have.
- Writing Your Strategy
The strategy of your market plan is the description of how you plan to win in the marketplace. Segmentation is an important part of your strategy which will be the grouping of customers around a particular benefit that they all see in your product or service. Then you will include targeting, which will be the customers you will be going after first. Once you have found your target market, you will need to create positioning in your plan, which is what will convince them to buy your product or service. This will be done through a claim or a value proposition that convinces customers to purchase from you and not one of your competitors.
- Tactical Portion of the Plan
The tactical portion of your plan brings the marketing strategy to life. You will want to include changes or improvements that you want to make using your product and service analysis. Pay attention to gaps in performance so that you can write strategies on how to fill those gaps. List any other assets or activities that go into supporting your products or services. Then you will want to identify any other supplemental parts or services such as accessories or parts that need to be available. Having a return policy or not needs to be decided and how you will implement that process.
You will then want to determine your pricing strategy while taking into consideration your target market and positioning. Comparing yourself to the competition, is your pricing strategy higher, lower, or the same? If it is different than your competition, explain why. Include a price list with additional costs or discounts that pertain to your products or services. This list should be coordinated with your finance and sales team. Other things to include in your pricing strategy are how, when, and where will your prices be communicated.
Next you will write a plan for promoting your product or services by telling customers all the ways that they can learn about them. First determine who you are promoting to or your target audience, then describe your communication approach. Will you implement traditional advertising or digital assets? Social media platforms offer multiple touch points with your customers, and each platform can communicate the same message in a different manner. Be sure to include a schedule of when you want to run each advertisement.
Finally you will want to write a distribution plan in this section, which is the pathway to get your products and services to your customers. Consider the length of the distribution channel and how many intermediaries exist between you and the customer. When writing this section you should also consider are you selling directly or indirectly, how much of the distribution channel do you own, and how many partners will you need to help with the distribution process.
- Implementation Plan
The implementation plan details your marketing plan rollout. It will include a dedicated communication outline, it lists and invites important personnel to the rollout, it outlines your marketing program and the responsibilities of each person involved, and denotes implementation timelines. These timelines should include details about where and how your marketing team will implement your program.
Within your implementation plan you will want to set up KPIs, or Key Performance Indicators, to help you keep track of your overall strategy. Each KPI should have a target and a high or low number around that figure. Good marketers reach their goals and also know how they achieved them.
- Budgeting and Forecasting
Including a budget and forecast section within your marketing plan, will help you allocate the right amount of resources to the right marketing programs, in order to make the most impact. The Top Down Approach to developing a budget, is by figuring out how much you can spend for marketing and allocating different amounts to different teams and programs. The Bottom Up Approach is to combine all of the marketing teams forecasted needs and allocate accordingly. Forecasting involves what you expect to achieve from your marketing, including potential revenue, number of units sold, or the number of new customers acquired.
Topics & Lessons
Each Below Topic Contains a Video Lesson and Helpful Downloadable Information
Why Write a Business Plan?
Business Plan Format/Templates
How To Develop a Business Plan
Marketing For Your Business Plan
Financial Projections for Your Business Plan
Writing A Business Plan For Your Existing Business
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