What Is A Marketing Plan and Its Components

Marketing is often the second-largest expense for most organizations behind staff compensation. Don't you want to make sure your marketing expenditures are being used in the most effective way possible as a business owner or marketer? But, more often than not, most companies try a variety of marketing plans without a clear strategy and end up with little success.

Alternatively, they may strike it rich and score a large marketing win, only to discover that they are unable to scale their marketing approaches, goals, and strategies in order to achieve consistent growth. This is where the marketing plan will come in useful.

What Is A Marketing Plan?

A marketing plan is a document that lays out your marketing strategy for the next year, quarter, or month. A marketing strategy often comprises the following elements, a summary of your company's marketing and advertising objectives, a summary of your company's current marketing position, a schedule of when your strategy's tasks will be finished, and an outline of your company's target market and customer requirements.

Learning to build a marketing plan pushes you to consider the critical phases that lead to a successful marketing strategy. A well-defined plan can also help you keep on track with your high-level marketing objectives.

The video below is a brief summary on the components a marketing plan.

Why Is A Marketing Plan Important?

The marketing plan is the missing link between the business's strategic direction and the achievement of outcomes. It's the glue that binds everything together and ensures that the correct activity is delivered to the right audience through the right channels at the right time.

If you've ever felt like you're trying a lot of various things on the spur of the moment without understanding what's working and what isn't, you're missing out on a marketing plan. Similarly, if you believe your actions are particularly insular and may conflict with other aspects of the business, you are missing a defined plan.

The magic happens when your business strategy, marketing strategy, and marketing plan are all in perfect alignment. That's when the little things you do on a daily basis start to add up to a wider picture of where your business is headed and you start seeing far better returns on your investment.

Provides Focus

A marketing plan is the blueprint for how the marketing strategy will be implemented. This alone demonstrates that everything has been thoroughly considered. You know that the activities that are taking place are favorably feeding into a clear determined direction. A marketing plan guarantees that all actions are in keeping with the strategic direction of the business, rather than simply following the entrepreneurial leader's latest notion.

Able To Plan And Manage Company Resources Efficiently

The main cause of a budget or resource shortage is that they are unsure of what they require or what they should be doing. With a clear marketing strategy and plan in place, the company can figure out how much money they'll need to set aside, what activities they'll need to do, and how many people they'll need to do it.

Internal personnel isn't always a resource. After all, some tasks can be delegated to experts like a web company, a social media agency, or a marketing consultant. Alternatively, it may assist the company in recognizing that having a dedicated full-time marketing manager, executive, or assistant is in their best interests.

The last resource that a marketing strategy may help you manage is your time. With a defined plan of action and an activity calendar in place, you can avoid procrastination and becoming sidetracked by time-consuming activities that aren't part of the plan and can take you off track.

Consistency

Typically, there is a burst of marketing effort that results in a slew of new customers. Because they don't have a plan or a dedicated resource, their focus shifts to satisfying the demands of the customers they've won. Meanwhile, their marketing efforts have come to a halt. As a result, there are peaks and troughs in activity, resulting in a sporadic pipeline of sales opportunities. You can advertise your company continually and persistently if you have a marketing plan and a devoted resource for it.

This will give you a company basis on which to build your business. If you can observe a consistent flow of leads and sales month after month, it's much easier to make investment decisions in the company.

Clarity

The most successful businesses are those in which everyone knows exactly what they are doing, what is expected of them, and how they are performing. All affiliated workers have perfect clarity regarding where the business is going, its growth targets, their role in meeting those targets, and how they are contributing because of a defined strategy and marketing plan.

It's impossible to overestimate the impact that such clarity has on employees. Everyone is aware of their own and one other's personal obligations, allowing them to better govern themselves and help one another.

Marketing Planning Process

A marketing plan is a tool that serves as a roadmap for the marketing department to follow in order to achieve stated marketing goals and strategies. Companies often construct a marketing plan every few years, but they review it on a regular basis for changes or opportunities depending on company strategy.

The impact of market planning is more essential than the format. The marketing strategy sets marketing objectives and discusses how marketing activities will assist the company in meeting its overall goals and objectives. The marketing plan outlines how the organization will employ the marketing mix—product, promotion, location, and price—to achieve its marketing objectives in a competitive market. The marketing strategy also concentrates the company's resources on attracting and motivating target customers to take action.

Alignment with Company Goals

The company's senior leadership is responsible for developing the framework that coordinates and concentrates employees' work: the company's mission, objectives, and strategy. The mission of the company defines why it exists and what it is for. The company goals and high-level plans that marketing efforts should support are defined by the executive leadership.

Marketers construct marketing objectives to serve the broader company goals, guided by corporate goals and strategies. They can cover a wide range of topics, including corporate growth, revenue, market share, profitability, customer perceptions, and market penetration. The marketing objectives are a collection of measurable goals connected to marketing activities that match with the company's corporate mission and goals and help it achieve them.

Situation Analysis

Aside from the company's mission and goals, the marketing strategy must consider a variety of internal and external aspects that can be rather complex. A situation analysis looks at both internal and external aspects that could influence a marketing strategy. The company's internal strengths and weaknesses, such as its products, workforce, market perceptions, and other factors that give it benefits or disadvantages in the market, will all influence the plan.

Outside the organization, competitors, economic forces, government laws, and other political variables present a variety of opportunities and challenges. The situation analysis aids in the refinement of business objectives and the development of a relevant set of marketing objectives. Profitability, cost savings, growth, market share improvement, risk containment, and reputation are all common company aims. These corporate goals can be broken down into particular, measurable marketing goals.

Strategic Planning

After doing a situation analysis and determining the organization's marketing objectives, the next stage is to determine which strategies will be most effective, as well as the tactics that will be employed to carry them out. For now, think of strategy as the "big concept," or approach, and tactics as "the details"—the exact activities that will be performed to make the great idea a reality and assist the business achieve its goals.

A marketing plan, must include actual plans, which is where strategy and tactics come in. Though it's critical for a marketing plan to be linked with an organization's mission and to consider its target consumers, rivals, and other factors, it's also critical to have a plan of action that outlines how the organization's resources will be used to achieve its objectives. The important components of that action plan are strategies and tactics.

Implementation and Evaluation

The organisation begins to implement the tactics after the plan is in place. Effective implementation is required for successful marketing strategies. For example, if the company wants to launch a social media campaign, it will take a lot of work to fine-tune the content, manage social media platforms, and persuade customers to participate. If the plan isn't adequately performed, it won't yield results.

How will you know whether it was done correctly? Marketing organizations must first decide what constitutes a successful marketing campaign, then assess the outcomes to see if the campaign had the desired impact.

Revisions and Amendments

Periodically, the marketing plan should be changed and adjusted to reflect changes in the environment. The use of measurements, budgets, and timelines by marketing employees to track progress toward the marketing plan's goals is a continual process. A constant review should be conducted to ensure that the marketing plan's objectives are being met. Given the operating context, the marketing manager should be able to assess if the documented tactics are effective.

It is unreasonable for the marketing manager to discover abnormalities and wait until the end of the year to analyze them, when the situation may have already worsened. Changes in the environment may require a re-evaluation of plans, projections, tactics, and goals. As a result, a formal periodic review, such as monthly or quarterly, may be required. This could entail creating an annual marketing plan but evaluating it weekly to ensure that aims and plans remain closely connected with environmental changes.

Components Of A Marketing Plan

The first step in developing a successful marketing program for your company is to create a marketing plan. Whatever the extent of your marketing strategy, remember that it is a living document. Every company should start with a well-thought-out strategy based on rigorous research, competitive positioning, and measurable goals. Your strategy should serve as the foundation for your operations in the next months. However, based on what works, you should always be willing to improve or alter your strategy.

It doesn't have to be complicated to function, fortunately. Here are some of the most important elements of a marketing strategy.

Objectives And Goals

Your marketing plan's objectives and goals serve as a focal point, defining what the plan is all about. Include the company's mission statement as an introduction, as well as a representation of your aims for customers and staff before moving on to individual objectives.

Sales Objectives

Compare your future sales potential to past performance or an industry-wide performance report. By comparing your performance to the industry average as well as your own, you'll show that you can look at your sector to see how you stack up against your competitors or what general challenges the industry as a whole may face in the future. Determine industry-wide issues and devise solutions to address them.

This will show that you have the insight to anticipate future issues. Using quarterly results, create "benchmarks" for your sales goals. This is a method of assessing the effectiveness of our marketing strategy. Indicate how much market share you plan to earn over the next three years to demonstrate that you plan to outperform your competitors by using a "individual" approach.

Profit Objectives

Include after-tax profit forecasts for each of the next three years. Relate the contents of your operating budget costs and statistics in the Business Plan to this profit prediction. Indicate how you'll reinvest your profit margin, as well as any existing operations and start-up costs, in future strategies.

Because you need to defer the costs you now have, don't forget about the future of the Marketing Plan. A well-thought-out marketing strategy should be able to pay for itself and its operations in a variety of ways.

Pricing Objectives

Focus on your competitors' shortcomings by providing greater quality at a lower price. Keep in mind your sentiments toward the services you use on a daily basis. Remember how you react when you are charged a high price for a product or service that is of low or marginal quality.

Justifying your service prices while thinking like a consumer will give you a competitive advantage. Ask a representative sample of your consumer base how they feel about competitors' offerings, industry prices, and any areas where you can improve.

Service Objectives

Concentrate on your customers' and prospects' goals, needs, and perceptions. Determine whether your industry has any service issues. Demonstrate how you'll get more customers while keeping the ones you already have.

Determine the elements that influence a customer's preference for a service, such as pricing or societal issues like environmental effect, service quality, or convenience. Indicate your objectives for service quality, degree of service (speed and style), customer satisfaction, and your ability to respond to customer needs and requests.

Market Analysis

The term "market analysis" refers to a quantitative and qualitative evaluation of a market. It examines the market's size, both in terms of volume and value, as well as the various consumer segments and buying behaviors, competition, and the economic climate in terms of entry obstacles and regulation. By analyzing your market, you will be able to determine the method you can achieve your goals.

The State of Your Market

Examine whether your industry is expanding, maturing, or contracting. If it's on the decline, figure out what's causing it and do all you can to fix it. Demonstrate your ability to adjust to changes over which you have no control. Show how, as a company, you can react to external factors better than the competition if your sector is maturing. You must distinguish yourself from competition in a newly emerging and growing market. Show how you plan to increase your market share by taking a different approach to the business and incorporating cutting-edge technologies. Determine which of your product/previous service's techniques are being questioned.

Porter's Five Forces Model

Porter's Five Forces is a basic yet powerful method for understanding the competitive landscape. It's a framework for analyzing industries and developing business strategies. It uses industrial organization (IO) economics to extract five dynamics that govern the competitive intensity of a market and, as a result, its attractiveness.

The term "attractiveness" relates to the overall profitability of the industry. An "unattractive" industry is one in which the five forces work together to reduce total profitability. An industry that approaches "pure competition," in which all companies' available profits are driven to normal profit, would be exceedingly unappealing.

SWOT And PEST

The SWOT and PEST analyses are two simple yet efficient extra techniques. The SWOT analysis is a four-part assessment of an environment based on internal (strengths and weaknesses) and external (opportunities and threats) variables that can provide a high-level overview of a product or market segment. Not only should you be aware of your competitors' strengths and weaknesses, but you should also be aware of the weaknesses of their strength. This manner, you'll be able to spot a "junction" (i.e., a gap) where you can launch an attack.

PEST is similar to SWOT, except that the four sectors are Political, Economic, Social, and Technological influences that effect company.

These three marketing tools (Five Force Model, SWOT and PEST Analysis) are simple but effective techniques that can be used to document and analyze all the 'forces' affecting the company, proving it a solid foundation for a more objective and quantitative analysis.

Consumer Analysis

Consumer analysis is the process of obtaining information about the consumer from market research, such as the consumer's wants, the target market, and relevant demographics, in order to use this knowledge in market segmentation for subsequent market research steps. Below are a few steps you can start with to plan your customer analysis.

Structuring your existing customer database.

Your existing customer database is the greatest place to start. The first step is to segment your customer database into groups based on shared features. The process of dividing data into segments is known as segmentation. You'll be able to distinguish between customers and focus your marketing efforts on specific groups if you segment your customers. Customers are usually divided into the following groups:

  • Demographic (age, gender, income)
  • Geographic (location)
  • Psychographic (values, beliefs, interests, personality)
  • Technographic (device/platform your customer is using)
  • Behavioral (habits, frequent actions)
  • Needs-based (what you customer needs)

And if you are marketing to a business, you should include your customer's

  • Industry
  • Business Size

Identifying Your Target Consumers

In most companies' customer bases, the Pareto Principle holds true: 80% of business comes from 20% of customers. Before going on to the remaining 80% of customers, it makes sense to obtain a clear picture of them first. By analyzing key customer indicators and looking for patterns in your information, you may find your most valued customers.

Metrics you can use to measure retention:

  • Customer Lifetime Value (CLV). A metric for calculating the average customer's revenue over the course of their association with a company. The formula for CLV is CLV = Average Transaction Size x Number of Transactions x Retention Period.
  • Customer Retention Rate (CRR). Customer Retention Rate is the number of customer a company keeps over time. CRR is calculated with this formula: [(E-N)/S] x100. Start with the number of customer at the end of the time period (E) subtract the number of new customer gain within the time period (N) divided the result by the number of customer at the beginning of the time period (S) multiply by 100.
  • Repeat Purchase Rate. The proportion of customer who have shopped with your company more than once is known as the Repeat Purchase Rate. This metric places a premium on completing a second, subsequent transaction in order to count a customer as a "repeat." Repeat Purchase Rate is calculated by dividing the number of customer who have purchased more than once with the total number of customers.
  • Redemption Rate. The redemption rate is the percentage of consumers who use their points. We can't anticipate every point to be spent, but we'd want to see a redemption rate of at least 20%. Remember that redemption is a good thing. It means that customers use their points and are rewarded for doing so. They'll be far more motivated to do things for points in the future if they associate happy emotions with your brand and loyalty program. Redemption Rate is calculated by dividing the total number of customers who have ever spent points by the number of customers who have ever earned points.

Communicate With Your Customers

Data can only tell you so much about a customer's story. You need to talk to your customers in order to get inside their thoughts and comprehend their wants. This entails contacting them, organizing phone calls, or inviting them to visit the office. Focus groups and usability studies are frequently used in conjunction with interviews. You can do communicate with your customers through doing one-to-one interviews, customer focus groups and usability studies. By communicating with your customers, you will be able to understand the emotions that drives their purchases, their pain areas, and their deepest desires. It's vital to remember that 95% of people's purchasing decisions are based on emotions.

Create Buyer Personas

After segmenting your customers, use all of the information gained in the preceding phases to construct customer personas for your target market. Customer personas are fictionalised versions of real people. They're stereotypes of your most important consumers, complete with demographics, motivations, behaviour patterns, goals, and pain areas. The benefit of developing such personas is that they allow you to think about and talk about your customers. Our brains aren't designed to think about vast groups of people who are all different. Individuals, on the other hand, are something we may consider. Consider building many buyer personas because different buyers may buy your products for various reasons.

Creating A Customer Journey Map

After you've completed your customer research, you'll want to look over the information you've gathered to see if there are any common themes or trends. A customer journey map can assist connect the dots and reveal pain points and aspects that could make or break their experience, as customers behave differently at each stage of the buyer's journey. A journey map depicts all of the touchpoints and interactions that a customers must go through in order to achieve his goal.

How To Create A Marketing Strategy

The marketing strategy section discusses the specific strategies that should be included in the marketing mix. The 8Ps of marketing are at the heart of the plan. Companies, on the other hand, are free to use the classic four Ps of marketing: product, price, place, and promotion.

The target market determines the best marketing mix. Advertising, sales promotions, and public relations initiatives are the most expensive choices. Referrals and networking are less expensive. Marketers should also focus on digital marketing tactics that employ technology to reach a larger audience while still being cost-effective.

Pricing and positioning strategy, distribution strategy, conversion strategy, and retention strategy are all part of the marketing plan.

Marketing Budget

The marketing budget or projection lays forth the estimated costs for the marketing activities outlined in the marketing plan. The marketing budget is a single document that contains the revenues and costs indicated in the marketing strategy.

It strikes a balance between marketing expenses and the organization's financial resources. It's a budget for the marketing activities that will be carried out, such as promotional activities, marketing materials and advertising costs, and so on. Expected product volume and pricing, as well as production and delivery expenses, as well as operational and finance costs, are all factors to consider. The marketing plan's effectiveness is determined by the amount of money set aside for marketing expenses. Marketing costs should be low enough for the company to break even and profit.

Performance Analysis

The goal of performance analysis is to look at the differences between measures or components in the marketing plan. These are some of them:

  • Revenue variance analysis. This is a study of revenue variance, either positive or negative. A negative variance is concerning, and there should be reasons available to explain why deviations occur.
  • Market share analysis: A study of whether or not a company has reached its goal market share. It is critical to examine this indicator since sales may be increasing while the company's market share is dropping.
  • Expense analysis. This is a study of the marketing cost-to-sales ratio. To make educated comparisons, this ratio must be compared to industry standards.

The ratio allows the company to keep track of actual spending vs the budget. Other variables, such as revenue analysis and market share analysis, are also compared. To get a clearer perspective, it can be divided into separate expenditures and sales.

Conclusion

The most important thing for any business to accomplish is to match its methods with a sound marketing strategy, which comes from having a comprehensive marketing plan created just for you and your company. Your marketing plan ensures that you get the most out of every resource, every dollar, and every minute you invest in marketing and advertising. It is possible to develop a successful company without a marketing strategy, but it will take far longer. It's no surprise that the world's most successful organizations have a defined strategy, plan, budget, and resource allocation for each of the parts that are critical to the effective implementation of their marketing strategy.

Reference

Purpose of a Marketing Plan

Content of a Marketing Plan

Market Analysis

Customer Analysis

Marketing Strategy

Why is A Marketing Plan Important

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Written by Cherylle Phua

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