THE MARKETING PLAN

LEARNING OBJECTIVES

1. To understand the differences between business planning, strategy plans, and market
planning.
2. To describe the role of marketing research in determining market strategy for the marketing
plan.
3. To illustrate an effective and feasible procedure for the entrepreneur to follow in engaging
in a market research study.
4. To define the steps in preparing the marketing plan.
5. To explain the marketing system and its key components.
6. To illustrate different creative strategies that may be used to differentiate or position the
new venture's products or services.

PURPOSE AND TIMING OF THE MARKETING PLAN

The marketing plan establishes how the entrepreneur will effectively compete and
operate in the marketplace. Marketing planning should be an annual activity focusing on
decisions related to the marketing mix variables. The marketing plan section should focus
on strategies for the first three years of the venture. For the first year, goals and strategies
should be projected monthly. For years two and three, market results should be projected
based on longer-term goals. Preparing an annual marketing plan becomes the basis for
planning other aspects of the business.

MARKET RESEARCH FOR THE NEW VENTURE

Information for developing the marketing plan may require some marketing
research. Marketing research involves the gathering of data in order to determine such
information as who will buy the product, what price should be charged, and what is the
most effective promotion strategy. Marketing research may be conducted by the
entrepreneur or by an external supplier or consultant. Market research begins with
definition of objectives. Many entrepreneurs don't know what they want to accomplish
from a research study.

Defining the Purpose or Objectives

One effective way to begin the marketing plan is to make a list of the information
that will be needed to prepare the marketing plan.

Possible objectives:
1. Determine what people think of the product or service and if they would
buy it.
2. Determine how much customers would be willing to pay for the product.
3. Determine where the customer would prefer to purchase the product.
 4. Determine where the customer would expect to hear about such a product
or service.

Gathering Data from Sources

A secondary source interprets and analyzes primary sources. These sources are one
or more steps removed from the event. Secondary sources may have pictures, quotes or
graphics of primary sources in them. Some types of secondary sources include:

• PUBLICATIONS: Textbooks, magazine articles, histories, criticisms,

commentaries, encyclopedias Examples of secondary sources include:
o A journal/magazine article which interprets or reviews previous
findings a history textbook

An obvious source is data that already exists, or secondary data, found in trade
magazines, libraries, government agencies, and the Internet. The Internet can provide
information on competitors and the industry, plus can be used for primary research.
Commercial data may also be available, but the cost may be prohibitive.

Free secondary information is available through:

• Census and the Department of Commerce.

• State departments of commerce, chambers of commerce, and local banks.
• Private sources of data, such as Predicates the Business Index
• Development Publications can be found in a good business library.

CHARACTERISTICS OF A MARKETING PLAN

An effective marketing plan should:

1. Provide a strategy to accomplish the company mission.

2. Be based on facts and valid assumptions.
3. Provide for the use of existing resources.
4. Describe an organization to implement the plan.
5. Provide for continuity.
6. Be simple and short.
7. Be flexible.

There are 5 Business plan to implement

• Marketing Planning
• Finance Planning
• People Planning
• Product Planning
• Supply Planning
Marketing Planning:

From the analysis carried out, you will no doubt have set some objectives about
marketing. 'Marketing' is a very broad area of the business - indeed there are likely to be
marketing implications associated with almost all your objectives. Your marketing plan will
include detail about:
• your products and /or services
• the place in which you sell them and the way that you distribute them
• the price you charge for them
• the promotion you undertake

These are commonly described as the '4Ps' of marketing. The plan will show your
intention of how you will undertake the full range of marketing activities. It will be based
on the data you collected about your competitors, your market places and other areas
discussed earlier.

It will also reflect the potential you have identified through analysis for:

• adding or amending products and/or services to your range

• finding new customers or better satisfying the needs of existing
customers.
• finding new markets
• taking advantage of changes in business environment, especially
changes in existing market places
• combating threats posed by competitors and taking advantage of
their weaknesses

Finance Planning:

A financial plan is often seen as the basis for many other parts of the business plan.
This particular plan, designed to meet the financial objectives you have set, is important in
that it pulls together the one common denominator of all other plans - and that is cash.

The financial plan for the business will have at its heart standard features:

• profit forecast
• cash flow forecast
• projected balance sheet

The financial plan you set should be tailored to meet your individual business
needs. To do so, it will refer to your particular business circumstances and may also include
one or all of a range of other financial tools, such as:
• business funding structure
• working capital analysis
• sales forecast
 • returns achieved on sales
• break-even analysis
• contribution from production
• stock analysis

Looking into these different forms of analysis will quickly show you that they
individually serve differing business requirements. You will need to decide which are most
relevant to your business situation and from which you will gain most advantage.

People Planning:

Having the right people with the right skills is vital to every business. A successful
business will recognize that, to be competitive in the 21st Century, it must be proactive in
training and developing its employees and it must have in place a strategy for achieving
this.
The plan needs to concentrate on the objectives which arise from the business
vision. It could cover a wide range of business issues including the identification and
satisfaction of training and development needs to meet business and individual
requirements. People planning can be crucial in achieving longer term objectives by
equipping employees with the right skills - and it is on those skills that the business will be
competitive in its market places.
The plan will also cover broad statements on recruitment, employment, induction,
training and a range of other related business functions. The Employment Department's
'Investors in People' initiative centres on the proven fact that concentration on 'people'
issues can bring significant business benefits.

Product Planning:

Throughout this guide, 'product' is taken to mean your product or - if you are a
service provider - your service. Whichever your areas of activity, today's changing business
environment and trends in customer buying patterns have to be closely monitored. The
business needs to be able to react quickly and effectively when changes occur. In addition,
you will want to influence future trends throughout your own marketing effort - but you
need to carefully plan future product and service developments to coincide with likely
changes. The life cycle of a product or of a service can be estimated and the various stages
it goes through will determine its contribution to the business. The effect of this is that your
plans for improving or extending products and/or services are closely linked to your
marketing and financial plans.
Quality of your products and services is an important area within your plan. Closely
linked to your pricing strategy, the question of product development affects the whole of
the business - and everyone in it.
You set your quality standards to satisfy the needs and desires of your customers.
Many industries have acknowledged quality levels and the concept of 'benchmarking' is an
innovative way to create partnerships from which all parties benefit through exchange of
information.
Supply Planning:

The relationships you develop with your suppliers and your customers are also
important influencing factors to be addressed when looking at your product plan.
Associated with the issue of quality, these relationships are crucial to future business
success.