Your Marketing Plan should ensure the...

Achievement of Your Business Objective; i.e. to

ACHIEVE YOUR FINANCIAL AND PROFIT OBJECTIVES...

Every entrepreneur faces the risk of having an ineffective and/or inefficient marketing plan...

and without a proper number of customers and sales, YOU WILL GO OUT OF BUSINESS!

Why You need a Marketing Plan

Introduction

As with a business plan, a marketing plan is a written document. However, unlike a business plan, a marketing plan focuses on marketing objectives per se. A business plan can contain a marketing plan (almost like a sub plan in a business plan) or a detailed marketing plan can be attached to a business plan. A marketing plan covers short, medium and long term marketing objectives (can be up to 5 years).

You can either use business plan software to write a marketing plan or marketing plan software.

The Importance of a Plan

In short, a marketing plan should describe how you would execute your marketing strategy (and hopefully it is a solid and sound strategy). Of course, your marketing strategy should be aligned with your business vision, mission, strategy and objectives. A marketing plan should contain the actual action plans to reach your marketing goals. It goes without saying that marketing activities should be carried out in such a way that your business objectives can be reached.

Now, what are your business objectives? This is the million dollar question...

Let us ask you, “What constitute business success to you?” Alternatively, let us phrase the question in a different way, “Why do you have a business?” As we see it, the answer should be straightforward.

To make a PROFIT!

All your backbreaking effort, strategies, plans, systems, products and services, marketing campaigns, yes everything is intended to bring you, as owner/director/manager, one benefit – a profit! Not even your well-written mission statement is your ultimate business objective (“…we strive to provide our customers with high quality… so that they may enjoy…”). You have designed your mission statement to tell yourself (and your employees) how you would make a profit – whether you did it consciously or unconsciously!

We do not underrate your good intentions to provide your customers with high quality services or products! You need to deliver high standards at all times. Your mission statement is important. In a manner of speaking, profit is not everything, though… your mission statement, marketing efforts and quality of services or products should eventually boost your profits!

If you are not in it for the profit, you are running a social welfare organization!

Profit, in simple terms, is an excess of returns over outlay. Profit is the third element in a price. To make a profit, is the ultimate test for any business – sooner or later, your business has to be profitable! You may even have a cash flow. However, be careful! What/who is the source of that cash flow? If it is your bank or investor’s money, it is not yet a profit. Some day your bank manager/investor will draw the line if you have not generated profits from sales! Eventually, your total income must exceed your total expenses. This is the bottom-line!

You need sales and customers to make a profit. You need more sales and customers to experience growth. Therefore, you need a plan to reach potential customers by making use of different marketing tactics.

Therefore, your marketing plan must be effective and efficient!

Your Risks

By browsing through our web site you would have noticed that we assist entrepreneurs in achieving success by managing their risks through sound business controls. Now, a marketing plan is considered by us as a sound control to manage your marketing risks.

What are your marketing risks? We can name a few marketing risks, but to summarize your marketing risks, we can say that any entrepreneur faces the risks of an ineffective and inefficient marketing plan and system.

With an ineffective marketing system we mean that the system (i.e. your processes, activities, methods, plans, research etc.) you use to do your marketing, doesn't achieve the objectives. What are the objectives? Bottom-line: to reach a certain number of people, turn a certain number of people into customers and ipso facto sales and profit.

With an inefficient marketing system we mean that marketing output (e.g. number of customers and sales) isn’t maximized for a given amount of input (i.e. resources, e.g. money spent, human resources used etc.), or the input is not minimized for a given amount of output so that the business can generate maximum profits in order to achieve its profit targets.

100 % efficiency for a marketing system would mean that the relationship between input and output is optimized to the full. The question for an entrepreneur is: “Can I increase my output while I use the same amount of resources (input) or should I do it by cutting the amount of resources I use without decreasing my output?”

Examples of Risks

An Ineffective Market Research System

In this case we discuss profit erosion due to lost business opportunities as a result of an ineffective Market Research System.

Ineffectiveness in this case is…

When a Market Research System does not achieve its established goal of identifying new customer needs so that the business can position itself to provide in customers’ new needs and to generate maximum profits and achieve its profit targets.

Case Study 1 (Poor control over the development of a Market Research System): A-Book-For-U.com, a small Internet business, sells books and magazines from different publishers over the Internet. The company is in competition with several other .com businesses worldwide.

During the company’s first profit protection planning (risk identification) session, the Owner, Marketing Manager and IT Manager identified and assessed the following current risk:

An Ineffective System

In this case we discuss profit erosion because of an ineffective Marketing System.

Ineffectiveness in this case is…

When a Marketing System does not achieve its established goal of sales (i.e. reaching and selling to the anticipated number of clients) in order for the business to generate maximum profits and achieve its profit targets.

For example, the Marketing Department of a company achieves only 70% of its established goal of sales. It is therefore 30% ineffective (or 70% effective). The ineffectiveness of the Marketing Department is measured by dividing the number of sales by the total of the established goal of sales for a certain period.

Case Study 2 (Poor control over the quality (value) of marketing campaigns): Helga’s Beauty, a small-to-medium business, manufactures and sells make-up. The company is in competition with several bigger manufacturers across the world.

During the company’s first profit protection planning (risk identification) session, the Owner, Managers and Marketers identified and assessed the following current risk:

An Incomplete and Ineffective Strategy

In this case we discuss ineffective marketing due to unclear and incomplete marketing objectives in the marketing plan.

Ineffectiveness in this case is…

When marketing does not reach the right target market in order for the business to generate maximum profits and achieve its profit targets.

Case Study 3 (Poor control over the selection of target markets): Lana’s Clothing, a small business, manufactures and sells different brands of clothing. The Owner is a lady, Lana, who has started the business two years ago.

During the company’s first profit protection planning (risk identification) session, Lana and her Sales and Production Managers identified and assessed the following current risk:

Lack of Market Research

In this case we discuss ineffective marketing due to the lack of a Market Research System.

Ineffectiveness in this case is…

When marketing does not reach the right target market with the right products so that the business can generate maximum profits and achieve its profit targets.

Case Study 4 (Poor control to ensure the prediction of new market trends): Let us take a look at Lana’s Clothing once again. During the same profit protection planning session, Lana and her Sales and Production Managers identified and assessed a potential risk:

The Contents

From above examples we have established clearly the fact that marketing is an area in any business that needs to be managed - especially the risks associated with marketing systems and strategies.

In order to do that, you need a...

Complete Marketing Plan!

Here are typical high-level areas that a marketing plan should or can (depending on the type and size of a business) cover (over and above the title page and important executive summary):

• External environment - e.g. the political, cultural, legal, economical, technological, supply chain environments etc.
• Market "make-up" - market analysis issues should be discussed like the type of market, the size, the current market segmentation (and how your company will fit in), current competition, market trends, market changes etc.
• Consumer information - consumer behavior, buying patterns, consumer demographics etc. should be discussed.
• Business resources and objectives - discuss the different resources available in your company e.g. people, their skills, finances and time as well as your business mission, vision, philosophy etc.
• SWOT analysis - i.e. your company's external threats (business risks) and opportunities, internal strengths and weaknesses AS WELL AS your company's competitive advantage.
• Research and strategy - covering your market research methodology, products/services, market segmentation, market share, price strategy, products/services and the promotion of them, the distribution or delivery of your products/services and finally implementation.
• Market summary - you need to discuss issues like your breakeven analysis, margin analysis, assumptions, future scenarios and an action plan for each scenario.

Online Business Guide

In order to identify your marketing risks, you need to read our business plan guide. You need to change your patterns of thought. You need to change the way you are thinking about and dealing with your business and marketing risks, the pitfalls that are threatening your company's existence, future and growth! Our business planning guide discusses techniques to identify and counteract your business and marketing risks.

Business and Strategic Marketing Planning Software

As said previously, you can either use business plan software to write a marketing plan or marketing plan software.

Thank YOU!

We would like to hear from you; your comments, ideas, recommendations AND questions! Please, send those e-mails!

Sincerely

Michiel Jonker, CISA
Business Around The Globe.com
(Kothek Business Solutions)

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