1.
MARKET RESEARCH.
Market research is an essential pre-requisite to creating a marketing
plan. Without research the marketing plan cannot be compiled on a
realistic and objective basis. Market research should be an ongoing,
routine function of collecting information relating to; the market;
the needs of the customer; the customer's perception of the Company;
its competitors and their activities.
I.
By product/activity state the following:-
The estimated market size and the Company's market share
objective.
§
The growth factor. That is, is the market for the
particular activity/product, growing; static; or declining.
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Customers - why they specifically come to the company.
§
Market research needs. That is the research you need to
undertake during the planning period, to help you meet your marketing
plans.
Market characteristics and structure are important in determining a
marketing plan. A market can be immature or mature. An immature market
is where the product or service has not yet supplied the potential
market. Market growth therefore consists of two factors, supplying the
product or service to the "new" customer and replacing the product or
of the "old" customer. A immature market exists when:-
§
-Political and social changes create a new
market.
-The wealth of the population of a market is increasing.
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-Technology provides new products. e.g.. Personal
computers.
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-Technology provides a superior replacement product.
§
The price of the product is reduced and brought within
the buying power of a greater proportion of the population. e.g.. Air
fares, color television sets, personal computers. Where price is a
significant factor in creating immature markets, they are usually
highly competitive despite growing rapidly.
A mature market, is a market where the potential market has been
virtually fully supplied. Activity in the market is therefore largely
confined to replacing the product or service at the end of its useful
life. It will grow in accordance with population variations (both
numbers and wealth), providing no alternative products or new
competitive elements (e.g.. imports) are introduced into the market.
Because of the technological changes that have occurred, and the
increasing wealth of populations, markets can mature very quickly,
particularly in the electronics field. Good examples of mature markets
in the domestic field are, washing machines, television sets,
refrigerators and cars.
Basic commodities such as food and clothing are very mature markets.
But the rapidity with which they mature (some fresh food products in a
day) make them large and valuable markets to supply.
In both immature and mature markets, the size of a market can be
affected by a natural growth or decline in population and/or
population movement.
Sources that can provide information to help estimate the size of a
market are:-
§
Government statistics for - Population and related
information; specific information on specific industries.
§
Local government for local population and industry.
§
Business associations.
Do not overlook how information relating to one industry can indicate
the likely activity in another when creating a marketing plan. A good example is activity in the
housing market, affecting the activity of tradesmen, furniture and
furnishing suppliers, furniture removers etc.
It is important that the Company has a clear idea of the customers it
is serving, in terms of their buying power and economic grouping.
II.
Compile an analysis of competitors on the following lines:-
§
List all important competitors in the market.
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Analyze their strengths and weaknesses.
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List their products.
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Rate their pricing structures compared to your own.
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Make an assessment of their promotional activity
compared to your own.
§
Make an assessment of their distribution methods
compared to your own.
The structure of a market in terms of its suppliers is important when
determining market strategy.
To enter a market dominated by one or a few important suppliers, could
only be relevant if it is considered that the existing suppliers are
inefficient and/or complacent.
If you are one of a few important suppliers, market share is more
likely to be gained on service and quality or acquisition policies. To
attempt to take market share by price, could lead to a price war.
If a market consists of a few suppliers with a significant proportion
of the market and then many other players, market share can be
increased by increased sales and marketing activity (e.g. increased
advertising and additional salespersons) and/or acquisition policies.
If a market has many suppliers, none of whom are dominant, then market
share can be increased by applying any combination of the policies
mentioned previously. In this case the policies chosen should be aimed
at presenting an image to the market that the directors feel best
represents the Company's aims and objectives.
Assessing competitors and rating their
size, is an alternative method of estimating the total market.
Information about competitors, can be obtained from Yellow pages
(identifies competitors); credit agencies; such as Dunn & Bradstreet;
Business publications, such as "Who's Who in Business", Trade
Association activities; the local chamber of commerce; and legal (but
not very ethical) direct approaches, without disclosing your true
identity.
2.
ANALYZING YOUR BUSINESS.
I.
Write a brief description of the business
II.
List the type of product(s) or service(s) supplied. Assess each
product in relation to the product of competitors.
III.
Summarize the business performance of the last few years in
terms of Sales, Costs and Operating Profit. Analyze the sales by
product/activity and costs by type.
IV.
Complete a SWOT analysis. That is consider the Company's
current Strengths; Weaknesses; Opportunities and Threats.
V.
Customers - why they specifically come to the company.
VI.
List the factors which you consider are the reasons for the
Company's success. That is, what is its competitive advantage?
VII.
Consider how external factors influence the business. For
example, factors such as Economic (e.g., inflation and exchange
rates); Political Climate; Social Climate; and Technology.
VIII.
Consider how internal factors, such as Image; Location;
Personnel etc., influence the business.
3.
GOALS, TARGETS & OBJECTIVES.
I.
Before setting business goals be clear about personal goals.
Make sure the goals set are the true goals. For example is the goal to
become a successful business person to create a busy life style,
providing both social and business contacts, or to provide financial
security which allows provision for family and the development of
other social activities?
II.
Convert the relevant personal goals into business goals.
III.
Separate the business goals into short term and long term.
IV.
Incorporate the business goals into the marketing plan.
4.
POLICY STATEMENT.
I.
The Policy Statement lists the policies that are considered
necessary to achieve the marketing objectives. It states the basic
policies and targets for the planning period, without evaluating
these.
II.
The statements in the policy document must be realistic and
have substance justifying their inclusion, covering such areas as:-
§
Customer service objectives
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The introduction of new products
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Rationalization of the product range
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Market share increase or decrease
§
Pricing policy and anticipated real changes in prices
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Changes in product specifications
5.
CREATING A MARKETING PLAN.
Basing your estimates on Objectives, Previous experience and the
Marketing Analysis
I.
By product/activity state the following:-
§
The target market(s)
§
The estimated market size and the Company's market share
objective.
The growth factor. That is , is the market for the
particular activity/product, growing; static; or declining. Advertising methods and focus.
II.
Estimate the sales for the year as follows:-
§
Estimate the frequency/number of each type of
product/activity that will occur in the year.
§
If the business is seasonal, split the year into seasons
and estimate the frequency/number of each type of product/activity for
each season.
§
Value each of the activities to determine the sales for
the year.
§
If the estimated sales for the year show an increase
larger than the estimated market growth, write up the action plans
which cause the change.
§
If the estimated sales for the year fail to meet
objectives, create action plans to generate the additional sales.
§
After you create a marketing plan,
if credible action plans, which justify the
changes, have not been, or cannot be compiled, modify the marketing
plan accordingly.
