In this article, the third in our “Starting a Business” series, we cover creating a marketing plan. This document outlines your target market, competitive position and how your new company plans to differentiate and reach your potential customers. It should include: Market Research, Market Situation, Market Opportunities, and Market Objectives.
Market Research involves gathering and qualifying demographic data on potential customers and the proposed market place. This can be achieved by conducting first-hand market surveys (through direct mail/email, phone prospecting and one-on-one interviews) and seeking out compiled reports from studies conducted by government, educational and trade organizations. Once collected, analyzed, organized and presented, this invaluable information allows startups with the objective information required to most effectively identify market segments and product differentiation.
Market Situation outlines and clearly quantifies the initial state and operating environment of your new company. It should include two sets of information, an overview of your company and an overview of the competitive landscape. Document your company’s proposed operating budgets and profit/loss statements, the initial organization tree (including specific areas of focus/job task), a listing of your proposed products/services, the specific demographics of your target audience, your proposed distribution channels, and your sales territory. Then gather key competitor data such as total sales, years in business, listing of products, etc.(which for public companies can be found in quarterly filings and annual reports – unfortunately this information is not readily available for private companies). All of these critical pieces of information should be viewed as assets to be spent in the startup efforts of your new business. The more accurate and conservative the market situation part of your marketing plan, the more likely it will serve its purposes and provide the much needed reality check to balance initial excitement and ideas.
Market Opportunities identifies the positive and negative aspects associated with the Market Situation defined in the previous section. Both threats/challenges and opportunities must be considered and included (e.g. how to specifically exploit favorable market trends and conditions, how to combat deep seated competitive disadvantages associated with new companies in this market, how to manage legislative and/or financial challenges in certain potential scenarios, etc.). This section should ultimately center around and answer the questions “What does the market need?”, “What product or service is missing?”, “What are the barriers to entry in this market?”, and “What startup costs will be incurred?”, “What relationships will need to be established?”.
Market Objectives includes measurable specifics related to benchmarks and proposed timelines. It should include short-term, mid-term, and long-term operating frames and provide hard numbers to evaluate and justify corporate progress and success at each stage. The best market objectives are clearly stated, objectively quantified, and realistically projected. Potential objectives might include sales goals, lifetime customer values, pricing levels and/or profit margins. It is also important to identify the actionable tasks that will be undertaken to achieve these objectives. Ultimately, the success or failure of your market objectives (and your overall marketing plan) will hinge on tying each of these objectives to concrete numbers and creating/managing budgets to ensure their realization.
There are many benefits to developing an effective marketing plan at this stage of your business’ life. First, it forces the principles to identify and modify corporate strategy and marketing tactics. This is critical in these early days as it allows management to review and track proposed theories and guidance. Second, it provides a channel for the communication of corporate messaging to the individuals most responsible for its daily implementation. By clearly defining competitive advantages and unique benefits, management positions its employees and overall corporate body for the greatest chances of synergistic success. Finally, it offers a good level of accountability to all involved parties. When the goals and steps are clearly defined, they can be more effectively followed, evaluated and managed.
For more information on how to create an effective marketing plan for your organization, contact Lescault and Walderman at 866-496-2042 or our sister online marketing and design company Capital Designs at 866-664-7465.