Today's marketplace is still exciting, vibrant and tolerant. Every day, across the country, small groups of designers, sales people and application specialist who have great market niche ideas step forward to start the next killer company. Unfortunately, these new companies are often like roving mobs, rather than armies planning to win on the battlefield.
Two years after their formation, fewer than five out of every 100-marketplace contenders will still be around. The dazed, battle-worn founders will walk the scarred landscape wondering what went wrong. As the industry continues to grow at a rate of 20-25 percent or so per annum, the defeated wonder how and why they not only lost the skirmish but the entire war.
Wrong Focus
These people blow it because they don't have "the right stuff."
These founders assigned responsibilities and authority without considering true capabilities. Just because someone handles the checkbook at home is no reason to believe he or she can be the finance officer for the company. The best technical guru may not be the best to be VP of engineering or design. The person who had the idea may not be the best person to be president. The most outgoing individual, or the salesperson with a record of outstanding sales, is
probably not the one to guide marketing and sales.
Being able to talk technically, or having a good sales sense, has nothing to do with being an outstanding marketing person. Outstanding salespeople generally think that good marketing is belly-to-belly selling or increasingly a solid Web presence. Their marketing plan is to double sales next year.
They fail to understand the total marketing concept. They believe that advertising, PR, selling and the other marketing activities are separate and independent functions.
Interrelation of Activities
There's a strong interdependence among all the parts of the marketing activity: pricing, packaging, positioning and service/support as well as advertising, public relations, selling, literature and promotion. The successful company doesn't separate advertising plans from the other parts of their marketing activities. Public relations isn’t just another promotional tool but it’s an integral part of the company’s overall positioning and strategy.
Instead, they view each as a necessary and vital building block.
The primary purpose of the marketing plan is to make certain that all relevant facts are known so you are aware of the obstacles that have to be overcome... and the opportunities that can be exploited. Once these are identified, you can establish a realistic set of objectives and plan your actions to achieve those objectives.
The plan of action uses all of the marketing tools--advertising, selling, sales and support literature, Web site, direct mail, public relations, pricing, packaging, training, customer support and so forth.
Recently attention has been given to what is termed event-marketing activities. Unfortunately, many of our newly developed marketing professionals aren't going to know that this isn't the kind of marketing that is needed to ensure success. They don't realize that even marketing is part of an overall marketing plan and strategy. In addition, as they find out from experience, event marketing cannot be the major focus of the marketing program. It must be used judiciously and appropriately.
Dotcom firms are spending tens of millions to attract eyes and gather clicks to “build market share/market awareness” and prove value. But when you look at their model there appears to be little or no concern about making a profit…now or in the far distant future. In two to three years 70 percent of these firms will undoubtedly spend themselves into oblivion. They lack total marketing strategy, substance or value. They also are completely void of an explanation of the value they are delivering to our global community,
Marketing Plans are Battle Plans
Isolated battles don't ensure total victory.
The firms marketing plan is not an academic (or funding) exercise. The very act of putting the plan on paper requires a complete knowledge of the facts so that you will have a tighter, more foolproof plan. It will assist you in sizing up and structuring your market. It will also aid you in sizing up the market's total business volume.
Then, you can take your market's breakdown of sales and compare them with the patterns of spending with other market area and industry averages.
Properly done, the marketing plan will allow you to evaluate alternative methods of meeting marketing problems and objectives. It also provides evidence upon which sound business models, programs and ideas should be considered.
More importantly, the marketing plan produces a unified, cohesive program, which everyone in the organization can understand, use and follow. It helps you change the product/service mix when necessary. It shows the need for pricing changes, customer and repeat customer models as well as what portion of the market or application area you are penetrating. The marketing plan can clearly show you who the prospective buyers are, where they are located, and what appeals are most likely to affect their purchasing decisions.
Plan's Components
Your marketing plan should be composed of six elements:
1. Statement of Facts. This is first and most important,
because everything else depends upon a correct understanding
of the facts surrounding the market segment, business,
products and services. In general, the plan should include
every fact that is of relevance to your marketing efforts.
This includes an objective appraisal of your product/service line,
sales history of the products, services, competitive
situation, pricing and expenditures in past marketing
activities. It should also include details on who the
purchasers are, what their wants and needs are, and an
analysis of your trade relations.
2. Problems and Opportunities. Many problems can be turned into
opportunities. What are the problems? They may be a product
line or its pricing. They may be unsatisfactory sales
support materials. They may be mistargeted advertising.
There may be too little or no PR support to interpret the
firm's products and services to the marketplace. Regardless
of the problem, recognition is the first step in creating an
opportunity.
3. Identification of Objectives. Objectives such as "increase
sales," "improve share of market," "increase vendor support,"
don't define the target enough.
As far as possible, objectives must be stated in terms of end results. For example, increasing readership of ads is a desirable intermediate objective. The important thing is
to increase the number of specifiers or buyers who receive
the message and are informed or persuaded.
Finally, there should be a clear distinction between
objectives and budget forecasts. While objectives have to be
be realistically attainable, they should be sufficiently con-
servative so they can be realized. It is from these object-
ives that sales figures are projected, marketing expenditures
are determined and gross profits are established.
4. The Complete Marketing Plan. If the statement of facts
reveals that there are product, application support or
service shortcomings that are interfering with the success of
your operation, the plan should recommend the corrective
steps to be taken.
The plan should suggest, consider and evaluate
alternative marketing and promotional strategies. On the
basis of that evaluation, it should include a recommendation
of the particular strategy that appears most likely to
succeed. Similarly, with respect to the execution of the
promotional strategy. These alternatives should be presented
fairly and objectively, with the pros and cons clearly
spelled out.
Only in this way is it possible to make sound business
decisions.
5. The Recommended Marketing Appropriation. The plan should
include a recommendation for the total amount to be spent
on marketing as well as the activities that will be funded.
It should also include the complete supporting rationale
as to why these amounts are correct ... based on the needs
of the market you are targeting, the activities necessary to
meet those needs, and the gross profit to be generated by the
estimated sales volume.
6. Forecast of Volume and Profit. Finally, the marketing plan
should include a profit-and-loss projection based on a
conservative estimate of the sales volumes to be attained,
the gross profit to be realized at the proposed prices, and
estimated costs. It should also include the deductions that
must be made from that gross profit to arrive at a profit-
before-tax figure.
The Business of the Business
As you can see, a good marketing plan gives you a clear, comprehensive picture of the state of the business, its problems and its opportunities. It spells out the objectives that you consider essential, as well as the specific means by which they will be pursued. It gives you the opportunity to judge the soundness of the strategic and tactical approach that will be taken. It puts everyone in the organization on record with marketing and sales objectives as well as expense and profit budgets. This should be your team's commitment to deliver the performance outlined and detailed in the plan.
If the plan works--if it is right in its determination of marketing objectives, and if events prove that satisfactory progress has been made toward those objectives--then we assume it was a good plan.
Unfortunately, many people fall into a trap. They assume that just because a plan worked in 2000 is going to work in 2002 and 2004. They forget, or lose sight of the fact, that the market, its wants and its needs aren't stagnant from one quarter to the next, let alone from one year to the next.
Frequent Evaluation
Another problem is that too many neophyte marketeers feel that, once they have successfully completed the annual marketing plan, they are free from the drudgery for another 12 months.
Wrong.
There are a lot of reasons for, and benefits to, a mid-year review. The obvious reason is that it helps in developing the next year's plan.
More importantly, it helps realign and modify the present year's program, when necessary.
Granted, reevaluation requires a little time and effort, but only a total fool follows a battle plan that isn't working.
And business is war.
Each of us had better be fighting to win.
######
SUCCESS IS NO ACCIDENT - To learn more about this author, visit Andy Marken's Website.
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