CHAPTER TEN – Are you in the process of writing a business plan? Do you want to learn how to develop a marketing plan & strategy for a new product? If YES, then you are advised to read on.
As an entrepreneur, you will rely on your intuition to make business decisions most of the time. This informal knowledge is very important in the decision making process. However, it may not provide you with the facts that you need in order to achieve marketing results. And this is where your marketing strategy comes in.
Your marketing strategy is that vital part of your business plan that outlines how you develop products and services that meet the needs of your target market. It also outlines how you will convince customers that your offer is better than those of the competition.
With a good marketing strategy, you will reach your target audience, expand your customer base, and ultimately grow your business. Also, you will set clear, realistic, and measurable marketing objectives for your business.
Every business, big or small needs a marketing strategy (even if you are not planning to seek funding from third parties). Customers won’t get attracted to your business by osmosis. They will only buy from you if they know who you are, what you are offering, and why they should prefer your offers to those of your rivals. All of these are what your marketing strategy would define.
Developing a marketing strategy isn’t dead easy. It requires extensive research, time, and commitment, as it’s a vital process that can make or mar your business. Now let’s look at the steps involved in preparing a marketing strategy for your business.
Writing a Marketing Plan & Business Strategy for a New Product
The first major step of your marketing plan is to define your target customers. Of course, that goes without saying. While some offers (such as snacks or processed fruit juice) can be targeted at all age groups, most products and services are needed only by a specific category of people, your target market. You need to define your target market to avoid marketing your products or services to those who don’t need them.
This is called a demographic analysis. To do a proper demographic analysis, you will have to classify your target customers under variables like age, occupation, gender, income, race, marital status, ethnicity and education. These socioeconomic traits can be used to reasonably predict consumer behavior.
You can use it to find out how your potential customers make their product choices, or how they respond to the different marketing strategies so that you can figure out the best approach to use for your new business. You can start with location.
- Are you targeting an audience within a locality?
- Or are you targeting a national or global audience?
Figure out the right answer and note it down. Age is another factor you want to consider.
- Are your offers suited for small children?
- Are they more suited for older children and teens?
- Are they for adults or seniors?
Again, write down what you think is the right answer. Also, your offer may be suited for only one sex, male or female. If this is the case, then it’s worth noting down as well. Think of other factors that can help you specify your target market and analyze those factors.
- Customer definition
You will need to describe a number of both general and specific demographic characteristics that apply. Some of the questions you will answer are:
- Where do they live?
- What’s their age range?
- What’s their level of education?
- How many of them are there?
- What are some common behavior patterns?
- What do they spend their free time on?
- Where do they work?
- What technology do they use?
- What ethnicity are they?
- How much do they earn?
- Where are they commonly employed?
- What are their values, beliefs, or opinions?
The details and the questions you will ask will vary greatly based on what you are offering. Essentially, you want to paint as detailed a picture as possible with both the qualitative and quantitative information you can gather.
There are many ways to break down your customer segments, but you will want to do it in a way that’s most meaningful for what you are trying to market. As far as marketing is concerned, you will need to provide a detailed plan on how you will go from generating awareness to ultimately getting what you are selling into the hands of your target customers.
2. Write down the benefits of your products or services
Think of the benefits that consumers will enjoy from your products or services and list as many of them as possible. Keep in mind that these benefits must include those that your customers already expect from your product or service.
For instance, if you are starting a tablet PC manufacturing or retailing business, customers won’t buy your products if each unit doesn’t come with WiFi and the reason for this clear: everyone expects all tablet PCs to come with WiFi. You get it?
3. Carry out a Situation Analysis: You need to have a clear understanding of your market and your competitors. You also need to understand the strengths, weaknesses, opportunities and threats to your business.
Your strengths in this context refer to the superiority or uniqueness of your products. You need to write down all the strengths that your product has over those already in the market- is it bigger in size? Is the quality better? Is it a healthy or time-saving alternative?
What are those things that your products lack? Is it more expensive than your competitor’s products? Are you a new brand with no pre-existing customer base? Are you operating in a highly competitive market? Are your marketers inexperienced? All of these will help you understand how to prepare for the challenges that you may have to face in the market.
What are the weaknesses of your competitors that you can capitalize on? Perhaps they are ignoring a section of the market? Or maybe they don’t even advertise because they think that they already have a huge customer base hence they have no need for advertisement? Or maybe they haven’t been able to take their businesses online? All of these are examples of opportunities for your new product.
What are the threats to your new products- insufficient marketing budget, inexperience, government regulations? Analyzing your business/new product strengths, weaknesses, opportunities and threats also known as a SWOT analysis, can help you to figure out how to use the opportunities and strengths to your advantage, and how to work on the weaknesses and threats so that they don’t affect the success of your new product after it is launched.
4. Define the unique selling points of your product
Your unique proposition is simply one or two of the most unique features that your product possesses. It could be quality, convenience, discount pricing and so on. This is what you’re going to be selling to your customers. It is what will get potential customers to do a double-take when they hear about your product. It will also be featured in all your promotional materials.
To be able to use your unique proposition effectively, you have to create a sentence or phrase out of it. In addition to the benefits that customers expect from your product or service, list those benefits that make your offer unique. Figure out those benefits that are missing in your rivals’ offers.
Even your pricing could be a unique selling point, especially if your products or services are cheaper than others in the market, and yet are of the same or even higher quality. The more the advantages your offers have over others already in the market, the brighter your chances of attracting tons of customers to your business.
5. Describe Your Marketing Goals
It is important to be clear about what you want to achieve with your marketing plan so that you can choose the right strategies- are you trying to increase awareness for your products? Are you trying to increase sales?
Write a list of all your marketing goals, and pick the best marketing strategy that will help you achieve all your goals without spending too much. For instance, discount pricing can be a good strategy for increasing brand awareness and sales but it might not be the best strategy for increasing profits.
6. Define your marketing methods
Even if your offer has an endless list of unique benefits, customers won’t buy unless you let them know about your offer. And that’s what marketing does. However, your marketing efforts could be futile if you don’t adopt the right methods and media. For instance, if your target audience are teens and young adults, then mobile advertising would work magically for you because teens spend long hours with their mobile devices each day.
Similarly, if you are targeting seniors, consider newspaper advertising because older people read newspapers a lot. But if you are targeting a general audience, then TV advertising would work. Of course, everyone watches TV. Keep in mind that your marketing methods must comprise both online and offline advertising media.
7. Write Your Marketing Budget: After choosing the best strategy to achieve your goals faster, you have to find out how much it’s going to cost you otherwise, your plans may not amount to much. You must write down all the costs of marketing your products, and where the money is going to come from.
Marketing your Products and Services
Before you start jotting down a detailed marketing plan, bear in mind that a customer goes through a sequence of five steps before making a final purchase decision. These steps, together forming what is known as the “Buyer’s 5-step adoption process,” are listed below:
- Awareness: Customer are aware you exist, but don’t know what you do or sell.
- Interest: Customers have now heard of you and because of what they see, she wants to learn more.
- Evaluation: Customers have now decided whether to give you a shot or not.
- Trial: Customers are willing to make an initial purchase to take your products or services for a spin.
- Adoption: Customers now love what you have to sell and will regularly purchase from you.
The first half of this adoption process is covered through your advertising and promotions plan, while the latter half requires a solid sales and distribution plan. Some of the questions that you’ll want to answer for each are outlined below:
Advertising and Promotion Plan
- Will you have a dedicated presence across many of the popular online channels (such as website, social media, relevant marketplace, etc) used today to gain brand awareness?
- Will your marketing plan be primarily inbound focused (such as SEO, social media, blogging, etc), outbound focused (such as PPC, affiliate marketing, sales teams, etc), traditional focused (such as direct mail, brochures, and print advertising), or a mix of all three?
- What are other low-cost yet effective marketing mediums that you will leverage to get attention?
- What is your PR strategy? Why would the press be interested in your story?
Sales and Distribution Plan
- What channels will you use to get your product out there? Will you sell via your website, a retailer, wholesaler, or a totally different channel?
- How will customers pay for your product?
- What will your return policy look like? Will you offer any guarantees? If so, what will they look like?
- What happens after a customer makes a purchase? What type of customer support will you provide?
Having completed the four steps discussed, you are just one step away from having your marketing strategy ready. And that one step is … review. Review everything you have noted and fine-tune it until you’re satisfied. Your marketing strategy is now ready for incorporation into your business plan.
It also helps to plan a product launch for your new product. A product launch can help to create the required awareness that your product needs to survive in its earliest days.