Essentials Of A Good Marketing Plan
The essentials of a good marketing plan has the main purpose of developing a marketing plan. It aims to describe in detail the resources and actions necessary for achieving our business marketing goals and objectives.
Once the plan has been prepared and implemented, it needs to be evaluated regularly to determine its success in moving your business towards its objectives.
Marketing plans vary, but this plan focuses on market segmetation, targeting, positioning, and the marketing mix as a tactical strategy in the marketing planning process and how its variables help achieve the business marketing goals. These are the four essential but critical elements of a good marketing plan.
Five Key Marketing Elements:
Market segmentation involves grouping your various customers into segments that have common needs or will respond similarly to a marketing action.
Understanding the concept of segmentation is central to marketing because each customer group will require a different marketing mix strategy.
Furthermore, each segment will offer differing growth and profit opportunities so the trick is to deliver the best offer to the best segment.
Some different ways you can segment your market include the following:
- Segmentation on the basis of location such as continent, country, state, province, city or rural that the customer group resides.
- Focuses on the characteristics of the customer. For example age, gender, income bracket, education, job and cultural background.
- Involves the customer group’s lifestyle. For example, the social class they belong to, lifestyle, personality, opinions, and attitudes.
- This segment is based on customer behaviour. For example, online shoppers, shopping centre customers, brand preference and prior purchases.
- This segment is on the basis of benefits consumers expect from a product/service.
Things to do: Identify and describe the various market segments.
Once you have segmented your market based on different characteristics, the next task is to choose one or more target market segments. Developing different marketing strategies for different customer groups is very important as no one particular strategy would satisfy all customer groups with different characteristics, lifestyles, backgrounds and income levels.
There are three general strategies for selecting your target markets:
- Undifferentiated targeting
- This approach views the market as one big market with no individual segments and therefore uses one single marketing strategy. This strategy may be useful for a business with little competition where you may not need to tailor strategies for different preferences.
- An example of when undifferentiated targeting can succeed is if your business is the only one of its kind in a small isolated town where you would consider all people living in the town as your target market. However this strategy may not be effective if there are three or four competitors also in town.
- Concentrated targeting
- This approach focuses on selecting a particular market niche for targeting the marketing efforts. Because your firm is focusing on a single segment you can concentrate on understanding the needs and wants of that particular market intimately.
- Small firms often benefit from this strategy as focusing on one segment enables them to compete effectively against larger firms. Porsche for example, targets an upscale automobile market through “Class appeal, rather than mass appeal”.
- Multi- segment targeting
- This approach could be selected if you wish to focus on two or more, well defined market segments and want to develop different strategies for them. Multi segment targeting offers many benefits to firms including greater sales volume, higher profits and large market share. However this method can be costly as it involves greater input from management, increased market research, and increased promotional strategies etc.
Answer these questions to keep building your marketing plan.
- Will the target market be local, national, international, or a mix?
- Will your product/service meet the needs of the target market? If so, how?
- Describe your strategy for approaching the target market.
Positioning is developing a product and brand image in the minds of customers or developing a perception in the customers’ mind of the experience they will have from purchasing your product or service.
The business can positively influence the perceptions of its chosen customer base through strategic promotional activities and by carefully defining your business’ marketing mix.
Effective positioning involves a good understanding of the positions occupied by competing products and the benefits sought by the target market. It also requires identifying the differential advantage with which it will deliver the required benefits to the market against the competition.
Businesses which fail to implement effective positioning strategies can fail to establish a clear perception of their business in customer’s minds and hence lose ground in the market to competitors that have a clear position.
What is the positioning strategy for your product/service? Develop one!
Once you have decided on your overall competitive marketing strategy, you can then focus on planning the details of your marketing mix. A marketing mix is a set of controlled variables that formulate the strategic position of a product or service in the marketplace.
The primary goal of marketing is to optimise the marketing mix, offering the best possible combination of the four P’s to maximise the effectiveness of marketing efforts. The variables known as the four P’s of the marketing mix are: 1) Product, 2) Price, 3) Place and 4) Promotion.
- Product Strategy
Product is the mix of all the features, advantages, and benefits that you offer to your target market. It may include certain characteristics such as quality, packaging, after sales support, customer services etc.
In order to ensure that your customers are gaining the full benefits of your product, you can consider the following questions.
- What is the core benefit your product offers? For instance, customers who purchase mobile phones buy more than just a phone; they purchase the ability to keep in touch.
- What does the actual product include? This includes branding, additional features and benefits that provide differentiation and ensures that customers will purchase your product over the competitors.
- What non tangible benefits can you offer? Factors to consider at this point may include after sales service, warranties, delivery etc.
- Describe your product. How does your product relate to the market? What does your market need, want? what do they currently use? What do they need above and beyond current use? Describe the “unique” features but most importantly, benefits of your products and services.
- What goods and services should we offer to meet customers’ needs?
- What is their exact nature?
- Pricing Strategy
Price relates to the pricing strategy of your products or services. It may include discounts, trade in allowances and credit terms to adjust for the competitive situation in order to bring the price into line with the buyer’s perception of the value of the product.
Businesses may use different pricing strategies based on different situations. These are listed following:
Premium Pricing – is used where a business may feel that there is a substantial competitive advantage for its products. Such high prices may be charged for luxurious products such as rare automobiles, first class airline services etc.
Penetration pricing – may be used where a business would set a price lower than the general market price in order to increase sales and market share. Once this is achieved, the prices would be increased. Penetration pricing would normally be most suitable for products with high price sensitivity whereby a small change in price would result in a large change in demand.
Skimming Pricing – involves setting a high initial price relative to the prices of competing products. Price Skimming works best for prestigious products since buyers tend to be more prestige conscious rather than price conscious.
Due to the initial high prices, the skimming strategy may also enable the organisation to recover its product development costs at an early stage. Once the product has been in the market for a short period, most businesses tend to lower prices over time making the product available to a wider market.
Competition Pricing – involves setting prices in comparison with your competitors. This pricing strategy is one of the most common strategies used by small retail businesses as an attempt to avoid price wars and still maintain a stable level of profit.
- What level of prices should be used?
- What specific prices and price concessions are appropriate?
- Place or Distribution Strategy
Place refers to where the sales are to be made and how the products will be distributed. It includes: channels of distribution, the extent of market coverage, managing inventories, transportation and logistics. Put simply, Place involves all activities that deliver the product to your target customers.
With the rapid advancement of internet technology and increasing broadband uptake there is currently a move towards selling goods online particularly with the increased use of e-commerce technology. As the internet facilitates a geographically dispersed market, firms are now able to reach a wider audience with a low setup cost.
- What channel(s) will be used in distributing our product offering?
- What physical or virtual distribution means are needed?
- Where should they be located? Which ones to use online?
- What should be their main characteristics?
- Promotional Strategy
Promotion refers to the promotional activities that communicate the merits of your product to your target market in an attempt to persuade them to purchase it. It may include various methods of promotions such as direct marketing, advertising, personal selling, sales promotions etc.
What mix of personal selling if any, online relationship-building, advertising, and sales promotional activities is needed?
- Networking – increase visibility
- Direct marketing – sales letters, brochures, flyers
- Advertising – print media, directories
- Training programs – to increase awareness
- Write articles, give advice, training, become a known expert
- Direct/personal selling
- Publicity/press releases
Answer the following questions to complete your essentials of a good marketing plan.
- Describe your products/services.
- What makes your product/service unique?
- Describe the demand for your product.
- Describe your pricing strategy and how it lines up with your market.
- Why do you think this strategy will be effective?
- How competitive is your product/service price compared with your direct competitors?
- How will you get the product/service to the end-user and what channel of distribution will you use?
- What systems will be implemented for processing orders, shipping and billing?
Information obtained from © State of New South Wales through NSW Trade & Investment, and we have added some modifications and adapted some content.