In this article I give you detailed explanations of the essential points that you need to cover in the third section of your business plan, called MARKETING PLAN or MARKETING STRATEGY. Marketing Plan is usually the third section of the business plan following the sections called ‘Company Profile‘ and ‘Market Analysis‘ (not counting the ‘Executive Summary‘, which is the very first section). In my article Marketing Plan – Part I, I gave you a short summary what this section of the business plan is about.

The Marketing Plan section of your business plan may be divided into two general sections:

Target Market and Objectives - This is section will look at who is your customer and what your business aims to achieve within the next five years. This outlines the game plan to reach the desired customers and achieve the set goals.

Marketing Mix - This section aims to explain and convince your audience how your marketing strategy will help you achieve the objectives that you have set for your company in order to reach the desired target market.

In this article I will focus on Target Market and Objectives. In my next article, called Marketing Plan – Part III: Product Mix, I will focus on the specific tools that are available to you.  So make sure to check back next week.

Although this article could be used on its own it will be more beneficial to you if you read Marketing Plan – Part I, first. But if you want to save time, here is the most essential information that you should include in the Marketing Plan section of your business plan/

TARGET MARKET AND MARKETING OBJECTIVES

Describe your key target market(s) – Whether you are selling toys or energy bars, you should know who is most likely to buy your product. This is called your target market. It is very important to identify your target market carefully as this will affect your whole business, from your marketing and promotion to your business model, to pricing, packaging and everything in between (in business language called, the marketing mix). In my article “The importance of knowing your target market” I talk in detail about ways to identify your target market and why this is so crucial for your business. Here I will give you a short summary.

The more you know about your target audience, the more effective your marketing strategy will be, which means that your marketing money will be spent in the most efficient way. Some of the questions that you need to ask are:

• How old are the people who are most likely to purchase my product?
• Where do they live?
• What is their lifestyle?
• What motivates them?
• What is their disposable income?

The list of questions can go on and on and depends on your particular business offering. Your target market will have shared group characteristics, which can be divided into many groups but here I give you the three that are most common:

• Demographics - age sex, income level, etc. If your are doing Business to Business, then you need to describe the business profile of your customers.
• Geographic – location of markets, such as home address or business address
• Psychographics – buying habits, status, lifestyle preferences, etc.

Marketing Objectives – As the name implies you need to set goals for your business. In general goals and projections in a business plans are written for a three to five year period and rarely extend beyond five years. In this section of the business plan you need to state your goals in way that is:

CLEAR, MEASURABLE, and has a TIMER FRAME for achievement. It is important that your marketing mix or also called marketing strategies will support these goals and will be written in a manner that will help you and convince your audience that you will achieve the goals that you have set in your Marketing Objective part of your Marketing Plan section of your business plan.

Here is an example of a marketing objective:

“We aim to establish a strong market acceptance for our transgenic mice and gene delivery plasmids in the U.S. market within the first year of operation, 2008, using aggressive sales and promotion strategy. As the level of market acceptance and product awareness increase we will extend our efforts by making our products available in Asia and Europe by 2011. By year five of operations (2012) we aim to capture 5% market share of the global transgenic mice market in the U.S. or $120 million in revenue. We are going to establish strategic alliances with large laboratory animal vendors who will distribute our products to the pharmaceutical and biotech industry both in the U.S. and internationally”

I was planning to finish this article here but thought I should throw in one last point which although you don’t necessary have to include in your business plan, I think it should not be overlooked and gives you one more thing to think about. Here it is:

Competition Strategy – In my experience VCs love to ask this question: How do you plan to gain market share from competitors?”.  This is a very good question and serves a very good purpose. By carefully answering this question you will gain a new perspective what your business “wish” potential is vs. its actual potential.  Although the answer to this question is unique to your business some of your possible answer may include:

• Aggressive advertising,
• Unique features,
• Better location,
• Pricing strategy, etc.).

You can find information on Marketing Mix in my article called Marketing Plan – Part III – MARKETING MIX.

Related posts:

1. Marketing Plan – Part III -The Marketing Mix
2. Marketing Plan – Part I
3. Market Analysis – Part I
4. Market Analysis – Part II
5. Writing the Product/Services Section of Your Business Plan