Often, the Marketing Strategy & Marketing Plan Section follows the Market Analysis Section, in a Formal Business Plan.
Below you can read, in detail, what should be analysed as part of Marketing Strategy formulation and Marketing Plan preparation, depending on the purpose of your Business Plan and the target audience.
Then, you can read about the next Formal Business Plan Section, the Investment Analysis Section.
Contact us for support in assessing your Business Planning needs, and for the Preparation and Implementation of the appropriate Business Plan for your enterprise.
The Marketing Strategy formulation and Marketing Plan preparation Section should cover the following information:
Marketing Definition
Dr. Philip Kotler defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.”
The Purpose of Strategic Marketing
Marketing Strategy is a long-term approach to planning, with the main goal of achieving a sustainable competitive advantage. Strategic Planning includes an analysis of the Strategy, starting from the status of the business before shaping, evaluating and selecting a market-oriented competitive position that contributes to the achievement of organisational marketing goals and objectives.
In this context, Marketing Strategy is utilised for the development of partnerships with the customers of the organisation. It is also employed for the organisation to gain insights in its customers, in terms of the features, specifications and benefits of the products and/ or services the organisation offers. Essentially, Marketing Strategy focuses on encouraging the target population to buy specific products and services offered by the business.
A Marketing Strategy may be entirely innovative or it may have been tested before.
An Effective Marketing Strategy will help a business prevail over competition.
The Importance of Marketing Strategy Planning
In short, Marketing Strategy should clearly explain how an enterprise will achieve its predefined goals. More specifically, effective Marketing Strategy:
- May provide the business with an advantage over its competitors
- Contributes to the development of goods and services that maximise profitability,
- Helps to identify parameters affected by business growth and thus facilitates the creation of a business plan that will meet customer needs.
- Helps to determine the right price for the goods and services offered by the enterprise, based on information gathered in the context of market research conducted as part of the Strategy formulation process.
- Ensures effective coordination of the various organisational departments.
- Helps the enterprise make the most of its resources in delivering its sales message to the target market.
- It helps to proactively determine the advertising/ promotional budget, by developing a methodology for the budgeting of the advertising/ promotional budget.
Please note that for Strategy design and Marketing Plan preparation, it is important to take into account the characteristics of the target market. The Buying Behaviour and the Purchasing Process in Institutional Markets are completely different from Consumer Markets.
In the previous Section, Market Analysis, we describe the steps and facts analysed in order for the enterprise to gain market insight, based on the characteristics of the specific enterprise, and its strengths and weaknesses in relation to the competition and the environment in which it operates. We also describe the criteria and rationale involved in defining the target market of the enterprise, as well as potential Market segmentation and Segment(s) selection.
In the Marketing Strategy formulation Section, we explain the stages involved in developing your Marketing Strategy, based on the results of the Market Analysis Section.
Defining your Marketing Strategy is a prerequisite for the development of an effective Marketing Plan. Once your Marketing Strategy is established, you can develop a Marketing Plan that explains how you will implement your Strategy in practice based on measurable data.
Stages in Marketing Strategy definition
The following steps are involved in defining Marketing Strategy:
- Marketing Strategy Definition
- Unique Selling Proposition (USP)
- Total Customer Experience - Marketing Mix
- Product
- Price
- Place
- Promotion (Promotional Strategy - Marketing Plan)
- Marketing Plan Preparation
- Marketing Plan
- Tracking and Measuring the results of the Marketing Planning
Unique Selling Proposition (USP)
First you need to describe the Unique Selling Proposition (USP) of your business. The unique selling proposition must be an exciting proposal that describes the essence of your business.
Your Unique Selling Proposition should distinguish your products and/ or services from those of your competitors.
It should be expressed in just one sentence and summarise the essence of your business, as your Unique Selling Proposition will be the focus of all Marketing efforts.
The question that your Unique Selling Proposition should answer for your customer base is: "That's why you have to buy from me instead of my competition."
The key to a successful Unique Selling Proposition is to provide your potential customers with a specific benefit they find attractive. It's not enough to say that your product or service is "better" or that it has "greater value". You have to communicate to your customers, what is the specific benefit you offer them.
Thus, before launching a product or service into the market, it is useful to develop a Unique Selling Proposition and proactively assess whether, or not, the product or service is likely to sell:
- If there is no benefit that differentiates your product or service from competition, why would anyone want to buy it?
- And, even if there is a benefit that makes your product or service stand out, is this something consumers consider as added value to them?
If none of the above conditions is met, why spend time or money on developing a product that will not be sustainable in the market?
The Unique Selling Proposition is a particularly important marketing tool for small businesses that are compelled to compete with other small businesses, as well as larger ones. Your business may outperform competition, but if you do not communicate it to potential customers they will have no reason to choose your business over a competitor.
Four steps for developing a Unique Selling Proposition
- The first step involves evaluating the products and/ or services your business offers, always from the perspective of the target market, as already defined in the Market Analysis section, according to economic characteristics, demographic characteristics, geographic characteristics, psychographic characteristics, behaviours and trends. As part of this step, the following questions should be answered from the perspective of the target market: "What does our typical customer really want?", "Does our customer base want a lower price, better service, a specific location, home delivery, etc.? "
- During the second step, it is necessary to determine which specific benefit, out of the benefits your target market values, your products and/ or services can offer better than the competition. In essence, you should answer the question: "What do my products or services offer that the products or services of my competitors do not offer?" As part of this assessment, it is necessary to take into account the strengths and weaknesses of your business in relation to the competition, as explained in the Market Analysis Section. Note that the promise of a particular benefit to the customer, through the Unique Selling Proposition, must be real! If a false promise is given your Marketing actions will have negative effects.
- The next step is to write a proposal that incorporates the outcome of the two previous stages. The proposal should be quite easy to remember, so that it can be used as a promotional slogan. For example, "We serve the best gluten-free pizza in the city" or “High-quality furniture at an affordable price.”
- Finally, you need to integrate your Unique Selling Proposition into all your advertising and promotional activities, such as your emails to customers, your website, all your publications and profiles on social media such as Facebook, LinkedIn, Twitter, Pinterest, etc.
Some well-known examples of Unique Selling Proposition
- M&M “The milk chocolate that melts in your mouth, not in your hand.”
- FedEx “When it absolutely, positively has to get there overnight.”
- Subway “Subs with under 6 grams of fat.”
- Hallmark “When you care enough to send the very best.”
Total Customer Experience - Marketing Mix
The next step in defining your Marketing Strategy is to identify the parameters that determine the total experience of your customers, from the products and/ or services you sell.
The overall experience of your customers is determined by the Marketing Mix you provide, i.e. the combination of Product, Price, Place and Promotion you offer. Also, people constitute important parameter of your Marketing Mix, as at every contact of your business with your potential customers the characteristics of your Marketing Mix must be transmitted.
Your Marketing Mix must be configured in order to serve the characteristics and needs of your target market, as identified in the Market Analysis section. And of course it should fully reflect your Unique Selling Proposition.
Moreover, your Marketing Mix, compared to that of your competition, determines your Market positioning.
Below you can see, in brief, some of the basic information that should be evaluated for the development of your Marketing Mix (“4 Ps”).
Please note that the Marketing Mix should be adjusted for each market segment selected, in order to provide the desired Market positioning in each specific segment.
- Product: Product refers to either a natural product or a service you are planning to offer. Some of the product/ service parameters to be determine involve:
- Brand Name
- Products or Services
- Functionality
- Packaging
- Quality
- Warranty
- Price: The pricing factor examines the pricing policy for your product or service. Pricing aspects that need to be determined include:
- Bundling (if you have related products/ services)
- Price flexibility
- Pricing strategy
- Retail Price
- Seasonal Price (if applicable)
- Wholesale price (for sales volumes)
- Location: Also known as Distribution, this parameter concerns the delivery of your product or service to your customers. Location decisions involve defining parameters such as:
- Distribution centres
- Channels of distribution
- Inventory management
- Logistics
- Order processing
- Transportation
- Distribution type
- Warehousing/ Storage
- Promotion: This parameter determines the various aspects of how you plan to advertise/ promote your product or service. Elements to be decided include:
- Advertising
- Marketing Budget
- Promotional Strategy
- Publicity and Public Relations
- Sales Team
- Sales promotion
Marketing Plan preparation
Once your Marketing Strategy has been defined, you can proceed with the development of your Marketing Plan. The Marketing Plan is a document that includes detailed description and instructions for the implementation of the Marketing Tactics and Programmes of the enterprise or a product or a service. The Marketing Plan covers the specific Marketing Tactics and Programmes to be implemented over a specified period of time, usually annually.
A Marketing Plan focuses on attracting new and retaining existing customers. It is Strategic and includes figures, facts and goals. A Marketing Plan describes all the tools and tactics an enterprise will employ to achieve its sales goals. It’s the action plan that defines what you're going to sell, who wants to buy it, and the tactics you'll use to achieve your sales targets.
Elements determined by the Marketing Plan
The Marketing Plan determines specific actions to be implemented. For each specific action to be implemented the Marketing Plan specifies the medium/ media to be utilised, the Marketing material to be prepared and utilised, the launch and completion dates, the cost of implementation, and the person(s) to carry out the implementation of each action – including internal and/ or external partners - and their responsibilities for efficient and effective implementation. In this perspective, the Marketing Plan includes a detailed timetable of the actions each person involved should perform. Also, it includes sales forecasts that project the results of each activity. This is vital in order to avoid catastrophic stock-outs due to increased sales resulting from each marketing action.
For the selection of advertising/ promotional media/ channels, target market – customers’ characteristics should be taken into account. In this context, questions such as “who makes the purchase decision?”, “what sources of information does the decision maker use?”, “who influences the decision maker?” should be answered. Also, the cost for each medium/ channel should be assessed In relation to the Target Market reach provided. In order to maximise the effectiveness of marketing actions and optimise the utilisation of the Marketing budget, it is important to select media and actions that enhance Target Market reach.
For example, exploiting the opportunities offered by Internet Marketing, in relation to "traditional" advertising/ promotion media, enhances both increased targeting and metrics accuracy. In addition, the use of the Internet provides the opportunity to implement interactive marketing activities and to directly communicate with your target market(s).
It is important to take into account seasonality factors, where applicable.
Monitoring and measuring the outcome of the Marketing Plan
As for any Plan, the progress of the Marketing Plan should be monitored and measured, in order to adjust/revise as needed.
The results of each marketing action/ campaign provide insights that can be utilised as benchmark for evaluating the Marketing Plan and adjusting Marketing Actions to follow.
Also, whenever influencing market parameters change, the Marketing Plan should be amended accordingly in order to remain aligned with your Marketing Strategy and goals.
Moreover, it is imperative that you continuously monitor the market for marketing activities by the competition. Such activities can affect the effectiveness of your own marketing activities, thus you must take them into account both for your implementation timeframe as well as for evaluating the results of your activities.
When marketing budgets are limited, Marketing needs to work smarter than ever. Evaluating your activities does not need to be costly and can provide significant cost savings in the long-run.
Utilise your website to measure your marketing
Various marketing activities are designed to drive customers to your website, so you should analyse your website statistics on a regular basis. You need to know how many people visit your website, which pages they visit and when. For example, if you run ads in the press, you can monitor if the traffic to your website increased at the time an ad was released.
Ask your customers how they found you
Ask your new clients how they learnt about you. It could have been "word-of-mouth," or by subscribing to a list, or they could have seen you at an exhibition you attended. You should always ask and find out their source of information, and you should keep a record with their answers. This data will help you evaluate the effectiveness of your marketing methods.
Ask your customers why they chose you
You may know the channel through which your customers have reached you, but what was your message that won their interest? Ask a group of customers what made them get in touch with your business. It could be the reputation of your business or the quality you offer in relation to your prices. The message that will prove to be more effective should become the focus of your future Marketing activities.
Ad Measurement
If you advertise in different places or different media, you can use different phone numbers or URLs, tailored for each individual ad, in order to determine the source of interest. This way you can compare response rates and evaluate which option offers the best return on investment (Return On Investment).
Measure your outgoing mail
In each letter you send, you can include a prepaid card or envelope for prepaid replies so that there is no cost for the customer to reply. The less one needs to do to answer, the higher the response rate. Response cards should have a code depending on the target market segment of the recipient, so that you can track the origin of the response.
Ask your customers for your marketing
The response rate to your outgoing mail answers “how many”, not “why”. For example, if you have sent 1000 letters, you can call a small sample of 50 recipients and request their feedback on points, such as:
- If they remember receiving your letter.
- If they have opened your letter.
- Can they remember what your main message was?
- Have they replied?
- Why?
Based on the results, you may find that while many recipients positively assessed your letter, they did not proceed to reply. In such a case, sending a reminder letter will increase the response rate. Or you may find that using media other than mail, such as phone or email, will enhance the response rate.
After understanding the Marketing Strategy and Marketing Plan content requirements, and its significance, for your Business Plan, you can read more about the next section included in a Formal Business Plan, the Investment Analysis Section.
Also, by clicking on the relevant link, below, you can read in detail about each of the remaining Sections of a Formal Business Plan:
Contact us for support in assessing your Business Planning needs, and for the Preparation and Implementation of the appropriate Business Plan for your enterprise.