THE MARKETING PLAN
Where Will The Money Come From?
A marketing plan is often included as part of an overall business plan but it can also be done as a "stand-alone" exercise, depending on the circumstances. Because it focuses on customers, it is one of the first steps in a total planning process. Let's take a simple example of how this might work.
You Choose Your Markets
Let's say you're thinking about setting up a retail store to sell antiques. The first thing you should be thinking about is this: Who is going to buy the antiques?
In other words, you need to start building a profile of your expected (or target) customer base. Will it be people from within the local town? The local area? Tourists? What would be the age groups of your customers? There are many ways to look at your potential customers, but they all should eventually be summarized into something called “your target market(s).” A market is a group of customers, and you could end up with many “market segments” or different groups of customers. For example, the tourism market, the local resident market, and so on.
Numbers Are Critical
You would then begin to put forecast numbers to the picture. Start with sales (revenue) numbers because nothing else will happen until you sell something. And, if you can't support the sales with the right product or service, your plan will become unworkable. So, number assumptions (educated guesses) are a good way to start. You'll find yourself changing them a lot as the picture begins to unfold, but that is entirely normal.
Supporting the Sales Forecasts
You can then go ahead and begin to anticipate the needs of each of these markets. For example, would a tourist on vacation in your area purchase a large piece of antique furniture? Maybe not, in most cases. (Serious collectors would be an exception, of course) You should eventually end up with a set of needs that you can now use to make lots of decisions, and these would include store location, how big, what kind of messages and mediums (advertising) would you use to attract customers, and many, many more.
Marketing Should Drive All The Support Functions
In other words, the marketing plan becomes the main core of the overall business plan. It should surface a pile of information that you can use to make critical decisions on running the business. Decisions like how much inventory ($) should I have on hand, what kind of facilities & equipment do I need (forklift, etc.), and many more.
You will have to make a lot of assumptions if you're creating a marketing plan for a new business, but a guess that is slightly “off” is better than no guess at all. If you review and update your marketing plan regularly, you'll do yourself a favour by having a “most current” profile of your customer base at your fingertips all the time.
Customers - and the employees who take care of their needs - are always the lifeblood of any business. If your plan doesn't put the customers front and centre, it's not a marketing plan.