O marketing plan is the stage of the business plan where the strategies of positioning, target audience, product, price, square and promotion are defined. In general terms, for whom your product or service will be offered and how to do it.
More concepts related to marketing plan:
What are 4 P's marketing?
In this article we will talk about:
- Why The Marketing Plan Is Essential For The Business Plan
- How to Make a Marketing Plan for a Business Plan
- Example of marketing plan of in business plan of Japanese food delivery
- Indication of an Excel Business Plan worksheet
Um business plan it simply does not exist without the definition of a product or service, the location where that item will be sold, what the target audience is, its price and how the entrepreneur will do to realize their sales. Briefly, all of this information is obtained and explained throughout a marketing plan and that is precisely why it is an essential part of the business plan.
Although there are different methodologies and ways to organize a marketing plan, it is usually based on the 4 Ps marketing. There are still other factors that will influence the development of a marketing plan within a business plan such as the definition of the target audience, competitors and how this will influence the revenues and expenses of the company as a whole. Let's see the ideal step-by-step that we use here in LIGHT:
Step 1 - Make the business model
While this step is not required, it will certainly help you a lot to set up your marketing plan. For those who do not know the business model is a method that summarizes their business on a sheet of paper A4 divided into 9 blocks, see in the example of the Maharishi Institute:
By assembling the customer segment, value proposition, distribution channels, relationship, resources, key activities, revenues and costs, you are in a way already organizing your 4Ps from the marketing mix, which is the second step of our plan.
2 Step - Define Your Marketing Mix (4Ps)
Organizing 4Ps involves more than just thinking about numbers. There are a number of subjective questions that need to be answered in order for you to come to a more complete understanding of your marketing mix and have inputs to devise sound strategies. These issues can be divided into four areas:
Product - one must define characteristics, functionalities and attributes of the product or service that will be offered. In the case of products, this decision involves size, packaging, colors, format, etc. In the case of services, it involves method and form. Some important questions are:
- What does the customer expect from the product?
- What attributes does it need to have?
- How will it be used?
- What image does the product / service want to pass?
- How do you intend to work on this brand?
Price - you must define what the price (cheap or expensive) and how it will be charged to the customer (single sale, monthly, variable cost, etc.). Some important questions are:
- Does your sales strategy target high demand?
- Is the customer heavily influenced by price?
- Does the customer value product quality over price?
- Does your strategy aim to accelerate market penetration?
- Is your product / service line considered premium?
Square - one must define where the product will be made available (point of sale, resellers, ecommerce, etc). More than this, it is also important to define ways of distribution and delivery of the product / service. Some important questions are:
- In which locations (or types of media) does the customer search for your product?
- How can you access these channels?
- What are your sales channels?
- Where are your competitors?
- Are there complementary channels that you can enjoy?
Promotion - Define online and offline advertising strategies that will be used to promote and advertise the product or service in question. Some important questions are:
- What media do you intend to advertise on?
- What is the cost projection you have for each media?
- What impact will these strategies have on sales?
Step 3 - Make projections of investments in marketing
With the marketing mix well defined, half the way is already mapped out, now it's just to join the strategies that make the most sense and trace the projections of cost in marketing. For this stage I recommend that you work with available budgets and price knowledge.
Basically, if you know you have roughly $ 120.000 to spend in a year, you need to think about strategies that cost no more than $ 10.000 per month.
Step 4 - Make Sales and Revenue Projection
To close the marketing plan perfectly, just do the sales projections and revenue. There are some methods that I find more practical to apply. The four most commonly used are:
- Projection with result analysis performed
- Stock-based projection
- Market-based projection
- Break-even point projection
If you want to understand more about how to do each of these projections read our article on how to make sales projection. The end result of the marketing plan will be a projection of costs with marketing and sales actions, which consequently generate revenue projection. If you want to go one step further, just join this with your financial planning and see if the business is viable or not within the logic of business plan.
Everything we've talked about so far was theory. To make sure that in practice the marketing plan within the business plan has its value we will see a practical case of a delivery of Japanese food by the use of our business plan sheet.
Step 1 - Business Model
As I said, this step is not mandatory, but it helps (and a lot) the continuation of the marketing plan. As it is of simple execution, I always recommend it. Just to highlight a few points, if we are talking about delivery could not lack speed in the supply of value and well organized distribution channels, in our case the site itself, application and motoboys to make the delivery.
2 Step - Marketing Mix (4Ps)
With the business model ready, we can get into the marketing mix itself. In our business plan sheet, according to what has been traced, it already gives you some answers. The first product:
Also, as I had commented in theory, there are some questions that will give you information to better delimit your product:
In our case, some of the answers essential for the practical application of business plan were that the product needs to be always fresh and the delivery needs to be fast. Another important factor is the packaging and utensils.
Following with the 4 Ps, we enter the characterization of the Square:
Here you can see some of the distribution features, more geared towards the internet and mobile applications. It is worth noting that there are no right or wrong answers. This question script only aims to make the marketing plan more aligned among the partners or managers who are using the tool.
On the part of prices the first step is to understand how the charge will be made:
From that decision there are a number of questions related to your goal with the price as well as your customers got the perception about it:
According to the replies, the business plan sheet will make a price strategy recommendation. It does not necessarily have to be followed, but it is a guideline you can have for when setting the prices themselves. In our example, the strategy suggested is the high value, which uses a price not so expensive with a quality product, aiming for a rapid market penetration and increase market share.
To close the marketing mix, we enter the promotion, which shows the type of language and communication that will be adopted:
Step 3 - Marketing Investment Projections
Another essential aspect of promotion is the definition of media and value. In our case we chose 4 different marketing investment types:
- Website and application development
- Google adwords
- Advertising in food applications
- Facebook ads
Note that for each item, we mark an initial investment and how much it will spend annually:
An important care is to not put too few investments too optimistic and when it comes time to put the business into practice spending more than planned. Try to be as realistic as possible and if you can, take advantage of expense information from similar companies as a beacon.
Step 4 - Sales and revenue projection
With everything ready, it lacks the latest (and perhaps most important) step of the marketing plan, set your sales projection. In our business plan sheet you can make an annual sales projection. To make it easier I recommend that you think about how much you can sell per day and increase until you reach the annual result.
For example, for the calculation of sales of executive dishes, we made the following calculation:
- Sales per day (in year 1) = 25
- Sales per week (in the year 1) = 25 x 7 = approximately 165 (considering possible process losses)
- Sales per month (in year 1) = 165 x 4 = 660
- Sales in the year 1 = 7920, which rounding up is in 8000 sales
In this way, we can reach a value that at first could be very arbitrary. This type of calculation is great for you to understand whether you are on the right track or not:
And to close, if you already have the sales projection, you just have to align that number with the average price of each product you have. This is the type of information you can look for in the pricing part, compare with the value applied by competitors or even test to see the end result.
Although it is not a simple process, make the marketing plan within the business plan can help you get a more complete picture of your future business. In this case, an important part is to make the comparison with the financial plan, comparing the projection of revenues with costs and investments, seeing if the business is feasible.
In our case, you can see that in the second year the project already has net income and payback occurs in the third year. All of this is automatically generated according to the business plan sheet.