Outline for a Marketing Plan 1.0 Executive Summary 2.0 Situation Analysis 2.1 Market Summary 2.1.

1 Market Demographics 2.1.2 Market Needs 2.1.3 Market Trends 2.1.4 Market Growth 2.2 SWOT Analysis 2.2.1 Strengths 2.2.2 Weaknesses 2.2.3 Opportunities 2.2.4 Threats 2.3 Competition 2.4 Services 2.5 Keys to Success 2.6 Critical Issues 2.7 Channels 2.8 Macro environment 3.0 Marketing Strategies 3.1 Mission 3.2 Marketing Objectives 3.3 Financial Objectives 3.4 Target Marketing 3.5 Positioning 3.6 Strategy Pyramids 3.7 Marketing Mix 3.7.1 Services and Service Marketing 3.7.2 Pricing 3.7.3 Promotion 3.7.4 Service 3.7.5 Channels of Distribution 3.8 Marketing Research 4.0 Financials, Budgets, and Forecasts 4.1 Break-even Analysis 4.2 Sales Forecast 4.2.1 Sales Breakdown 1 4.2.2 Sales Breakdown 2 4.2.3 Sales Breakdown 3 4.3 Expense Forecast 4.3.1 Expense Breakdown 1 4.3.2 Expense Breakdown 2 4.3.3 Expense Breakdown 3 4.4 Linking Sales and Expenses to Strategy 4.5 Contribution Margin 5.0 Controls 5.1 Implementation Milestones 5.2 Marketing Organization 5.3 Contingency Planning

Target Marketing

Everybody talks about target markets and taking aim, but not everybody does it. Target marketing is the only effective way to optimize marketing resources. Target marketing is a better use of resources Your marketing budget is going to be most effective when it reaches your selected target market. When we look at the big picture and sort through the marketing jargon, the benefit of target marketing is simple efficiency. Solid target marketing is a method to more efficiently reach your customers. Target marketing is a better use of your most valuable resources, i.e. time and money, to generate additional revenue. It is as straightforward as that. Now, lets talk more about how to get there. Your goal is to get to know as much information as you can about your existing or prospective customers. The more you know about your customers, the better you will be able to make decisions that will enhance your ability to communicate and connect with them. Who do you consider will benefit the most from your products and services? Think of the people and their most common characteristics and attributes. One of the best ways to identify your target market is to look at your existing customer base. Who are your ideal clients? What do they have in common? If you do not have an existing customer base, or if you are targeting a completely new audience, speculate on who they might be, based on their needs and the benefits they will receive. Investigate competitors or similar businesses in other markets to gain insight. Four ways to identify target markets Use these four category areas as you collect information to identify and define your target market:

1. Geographics: The location, size of the area, density, and climate zone of your customers. 2. Demographics: The age, gender, income, family composition and size, occupation, and education of 3. Psychographics: The general personality, behavior, life-style, rate of use, repetition of need,
benefits sought, and loyalty characteristics of your customers. your customers.

4. Behaviors: The needs they seek to fulfill, the level of knowledge, information sources, attitude, use
or response to a product of your customers. Focus on benefits One of the marketing fundamentals is focusing on benefits. This perspective is critical to target marketing. Pay close attention to the needs section of the market behaviors. Establishing an intimate understanding about the needs of your target market is critical. How will your customer profit or otherwise gain from using your products or services? Meeting this need is one of the most convincing points for sales to be made, cash to flow, and profits to result. You must seek to quantify the value of offering a solution to this need. You may be able to do this by asking these questions about your products and services: How much can it save your customer? How much can it earn for your customer? What intangible benefits might customers realize, and is it possible to quantify these benefits?

What is your customer really buying? People purchase products and services to realize one or more of the following benefits:

1. To save:
o Money o Time o Effort o Resources 2. To increase: o Income o Investments o Future

3. To reduce:
o Expenses o Taxes o Liabilities o Trouble 4. To improve: o Productivity o Abilities o Confidence o Appearance o Peace of mind The target market profile The target market process allows us to break down these groups of people so we can better understand how to reach them. One way to do this is to create a target market profile. Here is an example of a target market profile:

Personal relationships

1. Geographics: 2. Demographics:
o Married. o Between the ages of 21-35. o At least one child. o Condominium or home owner. o Education experiences beyond high school. o Earning a combined annual family income of $50,000 or greater. 3. Psychographics: o Values time and considers it their single most limited resource. o Excited about accepting and using innovative ideas and products. o Consistent Web users. Prefer the Internet over magazines and newspapers for information they trust. o Increasing resources invested into safety and security issues. o Beginning to plan for their future. 4. Behaviors: o They are leaders in product selection and respond to the opinions of the industry experts when making purchase decisions. o This group will first look to the Internet to acquire this information. o They defend these decisions under most any circumstance and will adamantly sell those that ask why they use the product or service and why they made the choice they did. o This group can be a powerful, unpaid sales force resulting from the referral network they build and use. The more detail you know about your ideal customers and clients, the better you will be able to make them aware of your products and services, and how to purchase them through you. Target marketing allows you to reach, create awareness in, and ultimately influence, that group of people most likely to select your products and services as a solution to their needs, while using fewer resources and generating greater returns. o Lives within the ZIP codes 97401, 97402 and 97405.

Break-even Analysis The Break-even Analysis lets you determine what you need to sell, monthly or annually, to cover your costs of doing businessyour break-even point. Illustration 1 shows the Break-even Analysis table: Illustration 1: Break-even analysis

The Break-even Analysis table calculates a break-even point based on fixed costs, variable costs per unit of sales, and revenue per unit of sales. Understanding break-even analysis The break-even analysis is not our favorite analysis because: It is frequently mistaken for the payback period, the time it takes to recover an investment. There are variations on break even that make some people think we have it wrong. The one we do use is the most common, the most universally accepted, but not the only one possible. It depends on the concept of fixed costs, a hard idea to swallow. Technically, a break-even analysis defines fixed costs as those costs that would continue even if you went broke. Instead, you may want to use your regular running fixed costs, including payroll and normal expenses. This will give you a better insight on financial realities. We call that burn rate these post-Internet days. It depends on averaging your per-unit variable cost and per-unit revenue over the whole business.

However, whether we like it or not, this table is a mainstay of financial analysis. You may choose to leave it out, but really, a business plan would not be complete without it. And, although there are some other ways to do a Break-even Analysis, this is the most standard. The Break-even Analysis depends on three key assumptions:

1. Average per-unit sales price (per-unit revenue):

This is the price that you receive per unit of sales. Take into account sales discounts and special offers. Get this number from your Sales Forecast. For non-unit based businesses, make the per-unit revenue $1 and enter your costs as a percent of a dollar. The most common questions about this input relate to averaging many different products into a single estimate. The analysis requires a single number, and if you build your Sales Forecast first, then you will have this number. You are not alone in this, the vast majority of businesses sell more than one item, and have to average for their Break-even Analysis. 2. Average per-unit cost: This is the incremental cost, or variable cost, of each unit of sales. If you buy goods for resale, this is what you paid, on average, for the goods you sell. If you sell a service, this is what it costs you, per dollar of revenue or unit of service delivered, to deliver that service. If you are using a Units-Based Sales Forecast table (for manufacturing and mixed business types), you can project unit costs from the Sales Forecast table. If you are using the basic Sales Forecast table for retail, service and

distribution businesses, use a percentage estimate, e.g., a retail store running a 50% margin would have a per-unit cost of .5, and a per-unit revenue of 1. 3. Monthly fixed costs: Technically, a break-even analysis defines fixed costs as costs that would continue even if you went broke. Instead, we recommend that you use your regular running fixed costs, including payroll and normal expenses (total monthly Operating Expenses). This will give you a better insight on financial realities. If averaging and estimating is difficult, use your Profit and Loss table to calculate a working fixed cost estimateit will be a rough estimate, but it will provide a useful input for a conservative Break-even Analysis. Illustration 2 shows a Break-even chart. As sales increase, the profit line passes through the zero or breakeven line at the break-even point. Illustration 2: Break-even chart

The illustration shows that the company needs to sell approximately 1,222 units in order to cross the breakeven line. This is a classic business chart that helps you consider your bottom-line financial realities. Can you sell enough to make your break-even volume? The break-even analysis depends on assumptions made for average per-unit revenue, average per-unit cost, and fixed costs. These are rarely exact. We recommend that you do the break-even table twice: first, with educated guesses for assumptions, as part of the initial assessment, and later on, using your detailed Sales Forecast and Profit and Loss numbers. Both are valid uses. Forecasting Your Sales Developing your sales forecast isnt as hard as most people think. Think of your sales forecast as an educated guess. Forecasting takes good working knowledge of your business, which is much more important than advanced degrees or complex mathematics. It is much more art than science. Whether you have business training or not, dont think you arent qualified to forecast. If you can run a business, then you can forecast its sales. Most people can guess their own business sales better than any expert device, statistical analysis, or mathematical routine. Experience counts more than any other factor. Break your sales down into manageable parts, and then forecast the parts. Guess your sales by line of sales, month by month, then add up the sales lines and add up the months. The illustration below gives you an example of a simple sales forecast that includes simple price and cost forecasts which are used to calculate projected sales and direct cost of sales and estimate total dollar value for each category of sales.

A simple sales forecast

Use text to explain the forecast and related plans and background Although the charts and tables are great, you still need to explain them. A complete business plan should normally include some detailed text discussion of your sales forecast, sales strategy, sales programs, and related information. Ideally, you use the text, tables, and charts in your plan to provide some visual variety and ease of use. Put the tables and charts near the text covering the related topics. In my standard business plan text outline, the discussion of sales goes into the chapter on Strategy and Implementation. You can change that to fit whichever logic and structure you use. In practical terms, youll probably prepare these text topics as separate items, to be gathered into the plan as it is finished. Sales strategy Somewhere near the sales forecast you should describe your sales strategy. Sales strategies deal with how and when to close sales prospects, how to compensate sales people, how to optimize order processing and database management, and how to maneuver price, delivery, and conditions. How do you sell? Do you sell through retail, wholesale, discount, mail order, phone order? Do you maintain a sales force? How are sales people trained, and how are they compensated? Dont confuse sales strategy with your marketing strategy, which goes elsewhere. Sales should close the deals that marketing opens. To help differentiate between marketing strategy and sales strategy, think of marketing as the broader effort of generating sales leads on a large scale, and sales as the efforts to bring those sales leads into the system as individual sales transactions. Marketing might affect image and awareness and propensity to buy, while sales involves getting the order. Forecast details Your business plan text should summarize and highlight the numbers you have entered in the Sales Forecast table. Make sure you discuss important assumptions in enough detail, and that you explain the background sufficiently. Try to anticipate the questions your readers will ask. Include whatever information you think will be relevant, that your readers will need. Sales programs Details are critical to implementation. Use this topic to list the specific information related to sales programs in your milestones table, with the specific persons responsible, deadlines, and budgets. How is this strategy to be implemented? Do you have concrete and specific plans? How will implementation be measured? Business plans are about results, and generating results depends in part on how specific you are in the plan. For anything related to sales that is supposed to happen, include it here and list the person responsible, dates required, and budgets. All of that will make your business plan more real. How many years? I believe a business plan should normally project sales by month for the next 12 months, and annual sales for the following two years. This doesnt mean businesses shouldnt plan for a longer term than just three years, not by any means. It does mean, however, that the detail of monthly forecasts doesnt pay off beyond a year, except in special cases. It also means that any detail in the yearly forecasts probably doesnt make

sense beyond three years. It does mean, of course, that you still plan your business for five, 10, and even 15year time frames; just dont do it within the detailed context of business plan financials.