Marketing Plan, Creating A
MARKETING PLAN, CREATING A
A marketing plan is a key component of a business plan, a document written by an individual or group of individuals interested in launching a new business. Creating a marketing plan allows new business owners to understand their customer base, determine exactly how products or services will meet the needs of a customer base, and devise promotional and sales strategies to target that specific market. Marketing plans can also be written throughout the life of a business to determine appropriate strategies for things like public relations campaigns designed to raise the general awareness level of a company or advertising efforts designed to position products and services as superior to those of competitors. Although many businesses create marketing plans to detail their firm's overall marketing strategy, some use more focused marketing plans for specific brands or products.
In the late 1990s, as World Wide Web-based advertising began its surge in popularity, many traditional companies scrambled to gain a presence online. Web sites for all sorts of companies, as well as for specific brands, began to emerge. When traffic to many of these sites failed to materialize, some industry experts pointed to a lack of planning as the culprit. Companies had built the sites before establishing goals or figuring out who they were targeting. Along similar lines, many dot.com upstarts launched operations with no concrete marketing plan because speed to market was the top priority. When the stock market plummeted in 2000, and dot.com s began disappearing as quickly as they emerged, the business climate changed and surviving companies began investing time and effort in traditional business development tools like marketing plans. Fledgling firms began pulling together marketing plans to guide overall marketing strategy, while more established firms began to update their original marketing plans to include specifics on the addition of a new channel, the Internet, to existing marketing efforts.
By 2001, many firms, including automotive giant General Motors Corp., had started to view the Internet as one of many marketing channels. When creating a marketing plan, whether it will include Internet-based initiatives or not, General Motors executives first identify concrete goals for the plan before choosing a channel or group of channels, such as television, radio, and print. For example, they might decide their goal is to generate a specified number of leads for a new vehicle launch. Once the goal is in place, one of the next major planning decisions concerns target audience. For example, if the target audience of a new product—such as GM's Vibe, which was under production in 2001—is young professionals, a marketing plan can specify how the firm might best reach those individuals. If the audience GM is trying to reach is present on the Internet, the firm can then decide if that medium is going to play a major role or simply a supporting role. Because General Motors executives believe the Internet is particularly well suited to lead generation campaigns, the firm might choose Web-based marketing as the focal point of its lead generation campaign for Vibe. Television, radio, and prints ads might then be used to publicize Web-based promotions.
Telecommunications services provider Verizon also uses the Internet as one of many channels. According to Julie Weitzner, a marketing executive for Verizon quoted in the August 2001 issue of E-Commerce Times, the firm establishes specific, measurable goals for nearly all of its marketing efforts, both online and offline. It then determines if the goal is something that might be best handled via the Internet, like a lead generation campaign, or if it is something Verizon believes is better suited to more traditional mediums, such as a brand-building initiative. Having selected the channels, the firm then begins to address questions surrounding audience. "What we try to do is view [the Internet] like any other medium. We define our target audience and we usually have multiple targets, which the Web allows you to segment. For instance, with our DSL, we can focus on gamers, people who download a lot of video or music as a key target audience."
Marketing plans, even those created within a single company, can vary in scope, format, length, and level of detail; however, they typically include similar types of information. In addition, regardless of a firm's online activities or lack thereof, marketing plan developers tend to follow similar steps when creating a marketing plan.
Concrete goals are a key component of all marketing plans. Goals help to steer the development of all marketing activities, including promotions, advertising campaigns, and press related activities. Examples of specific and measurable goals include increasing market share by two percentage points over a 12-month period, doubling sales of a particular product in six months, and increasing customer retention by 25 percent from one holiday season to the next. Less specific goals might include increasing a company's visibility within a marketplace or differentiating a company from its rivals.
CONDUCTING MARKET RESEARCH
Like those preparing to write a business plan, one of the first things marketing plan developers do after establishing goals is conduct market research. Some might make a trip to the library, while others might use focus groups or purchase research from an established market researcher like Gartner, Inc. or Forrester Research Inc. Another key source of information, of course, is the Internet.
Marketing plans include extensive information about target market, such as the existing size and the anticipated growth rate of the market and the level of demand for the product or service offered. Marketing plans also quite often include descriptions of potential customers, including their gender, age, level of education, marital status, how they make purchases, and the reasons behind those purchases. When clothing retailer Lands' End began planning for its new Lands-end.com site, the firm had already determined that a large portion of its customer base owned a personal computer and was twice as likely to have online access than the rest of the population. A typical Lands' End shopper was between 35 and 54 years of age and reported an average household income of at least $60,000. Nearly 88 percent had earned a college degree, and 66 percent were employed in a professional or managerial position. Incorporated into a marketing plan, all of this information would allow executives to make a wide variety of informed marketing decisions.
Discussions of target market also provide information on the history of the market, as well as various trends within the market. While marketers planning to target an emerging market might be unable to produce historical data about that market, they might be able to make comparisons to a similar industry. For example, although Amazon.com founder Jeff Bezos was unable to research the online consumer book industry—which for all practical purposes did not exist prior to Amazon's launch—he was able to use the traditional book industry as a basis for extrapolation when analyzing his target market. In fact, it was only after investigating 20 different products that he believed could be sold via the Internet—including magazines, CDs, and computer software—that Bezos settled on books, guessing that this sizable market, with its wide range of purchase choices, would be well served by the electronic searching and organizing capabilities of the Web.
Market research also includes a thorough analysis of competition. Marketing plans require information regarding the strengths and weaknesses of rivals, as well as information about their market share, profitability, and pricing strategies. Prior to choosing books as Amazon's initial focus, Bezos analyzed his competition and realized that market share was distributed among many leading book publishers. In fact, industry leader Barnes & Noble held less than 12 percent of the $25 billion book retailing market. This market fragmentation, Bezos believed, left room for upstarts. Along with describing the competition, marketing plan writers often explain how they plan to gain a competitive advantage over rivals. In the case of Amazon, Bezos planned to wrest market share from traditional book retailers by offering a wider selection and undercutting prices by 10 to 30 percent. Online travel discounter Hotwire.com planned to compete with its well established rival, the name-your-own-price giant Priceline.com, by offering improved services to customers. For example, online shoppers who purchased airline tickets on Hotwire.com would be granted access to their specific dates of travel, their estimated number of layovers, and the exact purchase price before they actually completed a transaction. In comparison, shoppers on Priceline.com were required to commit to a purchase when they submitted a desired price or price range, should that price be available, without always knowing the exact travel dates or approximate number of layovers.
According to a July 2000 issue of Catalog Age, the market research section of a marketing plan for pure play e-commerce vendors—those without a brick-and-mortar counterpart—might also require additional information. "For instance, a print catalog selling camping supplies competes directly with other camping catalogs, and to some extent, local camping stores. But a pure-play Web site of camping products competes with other pure-plays, as well as catalogers and retailers that also have sites, and manufacturers that may have started selling direct to the consumer online. It's not just that there's more competition on the Web. An online consumer may find a tent he wants on your site, and then many search for a better or cheaper version elsewhere in cyberspace. These differences need to be noted, quantified, and attended to in the marketing plan."
CHOOSING MARKETING ACTIVITIES
Once marketers have a sound understanding of the market they are targeting, they can begin selecting the marketing activities that will allow them to achieve their goals. Questions of budget typically arise at this point; some firms plan to spend a certain percentage of sales on marketing efforts, while others specify a set dollar amount, and budget limitations can factor into the selection of activities. Along with traditional forms of advertising, such as television, radio, newspaper, and magazine advertisements, marketers can also choose from less conventional promotional materials including online banner bars and buttons, as well as both print and online newsletters, and press releases. Regardless of the activities selected, "the major task in developing effective advertising is to make sure the ads reflect the specific marketing goals and objectives," wrote Agency Sales Magazine columnist John R. Graham in a September 1998 article.
Trade show exhibits, seminars, special events, charitable activities, and even things like letterhead and business cards can all factor into a marketing plan, as can strategic alliances with other firms. One of online services powerhouse America Online's (AOL) most lauded marketing tactics was its 1996 deal with Microsoft Corp. which required the software giant to include AOL software on its Windows 95 operating system. In a similar move, dot.com startups could include as a major marketing strategy in their plans the securing of links from heavily trafficked sites like Yahoo! and Amazon to their sites.
Many firms also include in their marketing plan an explanation of how the effectiveness of marketing activities will be measured. Ideally, marketing executives are able to review their plans periodically, allowing for the discontinuation of those tactics that prove ineffective. Conversely, those activities that worked well might be continued and also used in future marketing plans.
Beech, Wendy M. "Crafting Your Sales Technique: With a Marketing Plan, You Can Put Your Sales and Promotion Strategies in Place." Black Enterprise, December 1997.
Fridstein, Stan. "Marketing Plan." Catalog Age, July 2000.
Graham, John R. "Working With a Marketing Plan." Agency Sales Magazine, September 1998.
Holly, Tricia A. "Marketing Magic." Travel Agent, September 3, 2001.
Regan, Keith. "I-Marketing Interview: Verizon." E-Commerce Times, August 16, 2001. Available from www.ecommercetimes.com.
Vigoroso, Mark W. "I-Marketing Interview: General Motors." E-Commerce Times, September 20, 2001. Available from www.ecommercetimes.com.
SEE ALSO: Advertising, Online; Business Plan
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"Marketing Plan, Creating A." Gale Encyclopedia of E-Commerce. . Retrieved March 22, 2019 from Encyclopedia.com: https://www.encyclopedia.com/economics/encyclopedias-almanacs-transcripts-and-maps/marketing-plan-creating
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