Identify Your Market
Step one when drafting your Marketing Plan is to identify your market. To do this you will need to identify the right product, the right place at the right price through the right promotion.
But at the heart of good marketing campaigns are simple communications principles involving a message, an audience or your potential customer, and a medium. All three pieces are important in a successful marketing campaign, but most people have trouble identifying their market.
Markets are made up of consumers, businesses, organizations that have a need or desire your product or service. However, sometimes it is just not enough that they have a need or desire—what you really want are customers who are willing and able to pay for them.
To find those customers, you’ll have to stop thinking of your market as one big group of buyers, but rather as several individuals or smaller groups. For example, let’s say you are an auto mechanic. Technically anyone who owns a car might be a potential customer. But if you focus on only those who need immediate service you have pinpointed a much smaller targeted group.
This is not necessarily a bad thing. By focusing on this small group you will find motivated buyers. So the trick of identifying your market becomes the trick of identifying a particular market niche.
Once you’ve identified your strengths and weaknesses and determined your market niche, you can begin trying to identify your best potential markets/customers, as well as those markets that you probably will want to leave to someone else.
Check Out The Competition
Knowing who your competition is and what they’re doing is an important key to the success of any business—big or small. You will need to focus on the obvious competitors but also, if you are introducing a new service, you will want to know how that will fare in the current market. Some questions you might ask about the competition are the following:
- Who are your competitors?
- How many of them are there?
- Where are they located?
- How successful are they?
- Which ones are the main players and which ones are just barely hanging on?
- How long have they been around?
- What is the perception of them in the marketplace?
- How do they charge for their products or services?
- Which ones are seen as providing the best quality? Lowest cost? Fastest? Best value for the money?
- What are their specialties?
- How much territory do they cover?
- Who do they use as suppliers?
- What are their strengths/weaknesses?
- What are their credentials/are they licensed?
- What professional groups and organizations do they belong to?
- How do they market their products or services?
- Are they growing, shrinking, or remaining about the same size?
- Where can you beat them? Quality? Price? Speed?
So how do you begin to get these answers? The most practical is to pick up your local telephone book and start making calls. Ask the questions above, then reach out to your network and begin doing your research. You can also reach out to trade associations to see if they have industry statistics available to you. Another excellent resource is a Small Business Development Center.
Large companies with plenty of resources have made market research into a very sophisticated process, learning everything that is possible about their consumers. However, many smaller companies cannot afford a separate marketing research department to gather and monitor information. But that’s no reason to forget about market research all together. It’s not enough to know the answers to the basic questions about your business, you also need to know why people buy your products and services.
The first step in market research is identifying what you really need to find out. That is, do you need to obtain general information about how your target market thinks about your product or service or will a simple confirmation of the general trends in your industry do? The type of information you are seeking will shape how you approach your research. Generally market research can be categorized as primary or secondary. Primary research involves the actual data gathering of specific usage patterns, product feature likes and dislikes, etc. Secondary research includes the research most of us are used to doing—library research with books, periodicals and online on the internet. With secondary research, someone else has done the primary research and has written it up in a form that’s easier for you to use. May reports are available online now. You may also find information from government publications and information services, trade associations or small business development groups.
Your Fair Share of the Market
When starting a business, one of the most important questions you’ll face is whether your market is large enough to support your business.
To make this determination, it’s helpful to know how many customers you’ll need to be successful. One of the first things you’ll want to do is identify your “break-even” point—how much money your business has to generate to cover your expenses and pay you enough to make it worth your while to stay in business. You’ll also need to analyze your market to determine things like market potential, market size, and market share.
Market potential is how much potential demand is out there for your product or service. Market size is related to the current demand for your product or service, and, of course, market share is how much of that potential and current demand you can expect to capture.
When you compare your estimated market share to your break-even figure, you should be able to tell if the risk of going into business is worth the potential rewards.
Writing it all Down
Your final step will be putting all the information together. Your plan can be broken down into five major components:
- Situation Analysis – The total marketing environment in which your company will compete
- SWOT Analysis – This is the internal STRENGTHS and WEAKNESSES as well as external OPPORTUNITIES and THREATS to the company
- Goals and Objectives – These are the companies main goals as well as financial and marketing objectives
- Marketing Strategy – This will become the road map for your company and should describe your key target buyers, your company’s competitive market segments, your company’s niche, and how your company compares to the competition
- Marketing Calendar – Action plan to increase sales and continue the momentum of your company