Jan 18, 2023
Critical Components of a Marketing Plan
A good marketing plan is essential to achieving success as a business. Properly planning a successful marketing plan has three steps: situation analysis, market-product focus and goal setting, and the marketing program.
Situation analysis is also known as SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. These four issues must by analyzed. It is not always necessary to respond in all four areas, it may be best to focus on any or all components. A company’s strengths and weaknesses are internal factors. They can be influenced. On the other hand, there is no control over external factors, such as opportunities and threats. Proper SWOT analysis consists of four elements: identifying customer trends, analyzing competitors, a company assessing itself, and researching customers. SWOT analysis of a website which delivers food may determine that competitors will soon offer more organic food items. This is a potential threat to the company, and in response it may be prudent to increase the selection of organic food, perhaps at a better value. Of course, it would need to be determined to what extent current customers are interested in organic food, and how sales would be affected if a better selection were available elsewhere. On the other hand, shoppers may seek out the site because of its selection of European chocolates. This is a strength to the business, which the store may choose to expand on. The inventory of chocolate could be increased, or the current selection might be promoted more in order to drive up sales. The two issues could be combined, by offering more organic chocolate.
It is very important to understand that the marketing environment is dynamic, meaning that it is constantly changing. For this reason it is important to conduct SWOT analyses on a regular basis.
Failure to Plan
There have been many instances where companies have failed to scan the marketing environment and take appropriate action, with devastating consequences. Blockbuster, for example, failed to recognize that Netflix was a threat. They felt that using the Internet to rent videos would not become popular.
At one time Blockbuster had the opportunity to purchase Netflix for $50 million, but chose not to do so. Since Netflix is worth many times that today, and has helped drive Blockbuster out of business, it appears that the wrong choice was made. Proper SWOT analysis might have saved the now defunct video store company.
The second step in developing the marketing plan is market-product focus and goal setting. At this point it is specifically determined which products or services will be aimed at which potential customers. This is generally done through market segmentation, a process which places potential buyers into segments, or groups, which both share buying behavior and respond similarly to marketing efforts.
Once the segments have been developed, it can be decided which ones will be targeted, and in which manner. Goals are also set now. It is determined what the company wants to achieve, and within what time frame. Goals may include reaching certain sales figures, or attaining a particular market share. For example, a new fast food restaurant at the mall’s food court may set a goal to serve at least fifteen percent of the mall’s lunch time visitors within one year. It is important that goals can be measured objectively, so that it can later be determined whether or not the marketing objectives have been achieved.
Designing Your Marketing Plan
The final step is to design a marketing program. During the first two planning phases the questions of who and what have been answered. It has been decided which good or services will be marketed, and at whom these marketing efforts will be directed.
Now it is time to decide exactly how this will be done. What price should be charged? A low price may cause more units to be sold, but the overall profits may be lower. Should the prices be uniform, or should they be adjusted according to the income of differing segments. How should the new product be promoted? Which medium of advertising will reach most potential customers? Should online ads be in video or banner form? Location is an important marketing concept as well, which is also applicable to website design. Where should links be placed? Should the company logo appear near the top or bottom of the site?
Creating a successful marketing plan can be extremely difficult. It is not always obvious which choices are the right ones. If you need help developing a marketing plan, please contact us today.