Q: How is a marketing plan different from the marketing part of the annual business plan?
A: If you have a simple one-product or service-type business, the marketing plan may closely parallel the marketing segment of your annual business plan. However, a good marketing plan should articulate in more depth marketing elements and techniques than is customarily done in a general business plan.
An in-depth analysis of many factors, including the market, consumers, and competitors, as well as a detailed course of action, should be integral to the marketing plan. (See the Sample Marketing Plan presentation.) If you have multiple products or services, you should create a separate, detailed marketing plan for each.
Your annual business plan, on the other hand, should provide a summary of all anticipated combined marketing expenditures and a general overview of your marketing strategy. But don’t get into the level of detail that you would in the separate business plan. Remember, the main purpose of the annual business plan is to allow you to get a grasp on the big picture of your business. The main purpose of the a marketing plan is to nail down specific details of the individual marketing elements for one product or service.
Q: When should a single-product business create multiple plans?
A: Even if your business has only one product or service, you should consider doing a detailed marketing plan each time you plan a significant change in your marketing approach or in the nature of your product or service. For example, a retailer may want to do a detailed marketing plan before launching a major off-price sale or for a seasonal promotional strategy. A service business may consider doing a detailed marketing plan before substantially changing prices or offering discounts.
Q: Should a new marketing plan be created for each product or service?
A: If you produce multiple products or offer multiple services, then you should prepare a separate marketing plan for each related product line, if not for each individual new product offering. If you are doing your analysis carefully, you might uncover some very important marketing differences between even closely related products.
For example, competitive and marketplace studies may reveal that the low-end version of one of your products is similar to those made by several other firms. You may find that launching an expensive ad campaign for this product would be ineffective because there are no unique features or benefits to play up and the profit margins on this product can’t support extensive promotional activities. On the other hand, careful analysis of the higher-end version of the same product may uncover a combination of insignificant competition and strong product features and benefits that fully warrant an all-out advertising campaign.
Yes, you might very well be creating marketing plans forever! But they are an essential competitive tool. Marketing plans can help you gain ground on your competitors and channel the energies of your business in the most powerful direction in an orchestrated way.
In our book publishing business, for example, we made a separate plan for not only every single book that we published, but also for many we considered publishing but either decided not to or lost out to a competing publisher’s higher bid. An important reason for creating preliminary marketing plans, for products we had not even yet acquired the rights to, was to help us decide whether we should take on the project, and if so, how much we should bid for the rights. As a company, we created about five to ten marketing plans every single week!
You don’t have to start from scratch for every marketing plan you create. You can start with a basic template appropriate for your business or you can start with the plan you created for a similar product or service. Then think hard—what worked well? What didn’t work well? And what are some new ideas you might want to try this time?
Q: How often should marketing plans be updated or changed?
A: This depends upon the type of business you are in, as well as many other factors. However, most small businesses don’t reevaluate their marketing plans as often as they should. Although a very small business offering a single service with a limited advertising budget may do fine rigorously reevaluating its marketing plan annually, most businesses should plan a review at least quarterly, if not monthly.
If you aren’t happy with the results of your marketing or think you have the potential to perform better, keep reevaluating. Subject your marketing plan to a review as often as is necessary to develop and maintain the business results you want.
If you can shift your marketing resources among different products or services, and the sales of your products or services are volatile, then it might not be excessive to reevaluate your marketing plan weekly. Sometimes, especially if your product is trendsetting or timely, it is imperative to review marketing plans daily as new information on consumer preferences, sales projections, and/or distribution opportunities are brought to your attention.
At our book publishing company, we reviewed and often changed several marketing plans every week. Sometimes, especially when we were launching a particularly important new book, we would review and change marketing plans as often as every single day. We would try to get daily sales reports, review our inventory levels, review the publicity and marketing events, and consider upcoming promotional opportunities.
Q: Who should be involved in creating marketing plans?
A: Unlike the annual business plan, one person should be assigned primary responsibility for developing a marketing plan for a particular product or service line. The most obvious choice for this task is the product manager or marketing manager for that product or service line. In smaller businesses, the owner or CEO will usually take on this role.
Although one person is assigned primary responsibility for developing the marketing plan, he or she should seek input from everyone within the company as well as outsiders. Feedback from salespeople and existing or potential customers can prove invaluable.
Q: How do I determine prices?
A: Many small businesses charge too little for their products or services and their profit margins suffer. Especially if you are selling a product that is at least a little different than other products, or selling just about any service, try not to sell on price point alone. As a rule of thumb, I would charge as much as the market will bear, raise prices aggressively each year, and ensure I make a healthy profit on each sale.
For More on Business Plans
For more on how to create business plans see my course, How to Create a Business Plan. This course includes step-by-step video instructions, samples and fill-in-the-blank templates for both a one page business plan and a full length business plan. It also includes instructions, samples and templates for all financial statements and projections.
How to Create a Business Plan is one of over 130 courses included with BusinessTown. Other popular courses include Start-a-Business 101, How to Find a Business Idea and The Complete Guide to Digital Marketing. You can try BusinessTown for free.