The Marketing Department

If you’re ready to expand your business or product line or have never formalized your marketing strategy then it’s time to develop your marketing plan.  And let me save you some time, a marketing plan is not something you can buy off the internet or have software automatically generate for you.  But don’t worry about that because I’m going to walk you step by step through the basics of everything you need to do to develop your own marketing plan using simple, easy to understand terms.

- This is the first of a series of five articles.

A marketing plan has eight sections:

1. Executive summary and table of contents
2. Current marketing situation
3. Opportunity and issue analysis
4. Objectives
5. Marketing strategy
6. Action programs
7. Projected profit-and-loss statement
8. Controls

Today we’ll focus on the first two sections, the executive summary and table of contents and the current marketing situation. The executive summary is meant to give senior management or key investors a brief summary of the plan’s main goals and recommendations.  This isn’t the place to talk about “leveraging synergies of economies of scale that will renew our corporate vision and strategic focus while adding value to our target market segments…”  Instead, focus on getting the main message of your marketing plan across as quickly and with as few words as possible.  DO NOT DO THIS STEP FIRST – as tempted as you might be to give someone a preview of your plan before its complete the executive summary should be the LAST THING YOU DO.

Imagine you’re on an elevator with ten floors to go and the doors open and in walks a potential investor/senior manager you’ve been trying to get a meeting with for weeks.  If the elevator is averaging three seconds between floors you’ve now got a captive audience for the next 30 seconds.  How do you get your idea across to him/her before the doors open again?  Your executive summary is the equivalent of this 30 second elevator pitch; don’t waste your or their time with any unnecessary information at this point.  Explain your business opportunity, the financial and marketing objectives, and briefly explain your marketing strategy.  The key is to catch their attention, demonstrate you have a well thought out and researched plan, and more importantly a marketing strategy that will make money.  Do this well and you’ll have plenty of opportunity to explain the details; do this poorly and you’ll lose their attention and interest.

The current marketing situation will require you to do some homework.  In this section you’ll provide background data on sales, costs, profits, the market, competitors, distribution, the macroenvironment, and your favorite episode of Gilligan’s Island (just checking to see if you were still with me).  We’ll discuss each of these individually:

Market Situation. You’ll need to know the size and growth of your target market for the last 2 – 3 years, preferably broken down by market and geographical segments.  If you work for a large company or corporation this information would come from the product manager.  If you’re not lucky enough to have someone hand all this information over then you’ll need to gather as much data as you can and make some educated guesses.  For example, if you operate an online skate board accessories store out of your home and business is going so well you would like to open up a local brick and mortar store you’re not going to have this information at your fingertips.  But you should have records of all your sales, and if you don’t know already you could do a statistical polling of your past customers (maybe bribe them with a discount coupon) and ask their age, sex, general income level, education, and anything else you think would be useful to know.   If you learn your products are popular with 15 – 25 year old males with a high school education and a disposable income of $10k – $25k your next step would be to look up the demographics for the geographical area where you intend to set up shop.  The US Census Bureau would be a good place to start looking, and it would be good to know if the number of males in this age group for your area has been increasing in recent years.

Competitive Situation. Other good data to have would be the number of skate parks in the surrounding area, the number of other stores you would be competing with for customers, and how likely potential customers would be to buy products from a brick and mortar store versus an online store.  If you don’t have answers to these questions you could survey potential customers at the skate park (don’t forget to bribe with coupons).

Distribution Situation. You’ll need to have a plan for how you are going to physically distribute your products.  If you were drop shipping your internet orders, are you going to keep an inventory of products in your proposed store?  And if so, how much inventory do you estimate you’ll need to meet demand?  In the beginning this will be based on a lot of educated guesses but over time as you track your sales you’ll develop a better plan for maintaining inventory levels.

Macroeconomic Situation. This is where you consider broad macroenvironmental trends like demographic, economic, technological, political-legal, social-cultural trends and how they might affect your product line’s future.  In the example of our skate board store a positive macro trend would be Tony Hawk’s recent visit to the White House, and the growing popularity of the sport.  A negative political-legal macro trend might be a growing number of areas where skate boarding is prohibited and skaters are generally considered a nuisance.

Product Situation. This is where you will discuss sales, prices, contribution margins, and net profits.  This is a big enough topic that I think we’ll save it for the next article.

Next time we’ll finish discussing pricing and move on to opportunity and issue analysis.  If you have any questions about the topics we’ve covered or would like some specific questions answered please shoot me an email at Dave at MBAbriefs dot com or fill out a comment form.

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You might also like to read:

1. Develop your own marketing plan – part 2
2. Develop your own marketing plan – part 5
3. Develop your own marketing plan – part 3
4. Develop your own marketing plan – part 4
5. Small business marketing on a shoestring budget