The most important component of a strategic business plan is the marketing plan and strategy, defining new market and product additions for small businesses.
Marketing is a strategic function in any business because it appraises the market in terms of the company’s capabilities in attempting to serve the needs of the customer base in a more effective way than that of the competition. Arguably it is the most important function, in fact even more important, in the long run, than the sales function. The following suggests a strategic approach to developing a marketing plan for inclusion into a full business plan. However, once a decision is reached to enter a new market by whatever means, the marketing plan can also stand alone as part of a regular strategic planning effort.
Marketing Strategy and the Strategic Business Plan
The marketing plan and strategy are an integral part of the way a business will need to bring products to a market or market segment. For the purposes here, marketing is strategic as opposed to tactical. The overall approach is that a business plan lays out the foundation of a business, but the marketing plan/strategy is the vehicle required to achieve the goals of the business plan.
There are at least 8 major areas that a strategic marketing plan should include:
- The Market Assessment, Size, Scope and Market Segmentation and Future Market Direction
- Competitive Analysis
- The Company’s Competitive Strengths or Weakness
- Products/Product Family within the Market or Market segments
- The Company’s Marketing Approach and Barriers to Entry
- The Marketing Support Materials and Personnel
- Marketing & Sales Projections
- Marketing Budget and Staffing
Market Assessment
Before market entry, a business should evaluate the size and the direction of a potential new market. The owner or chief marketing officer ultimately will have to decide whether the market is worth attacking. In other words, is it large enough to warrant expenditures in product development, training, marketing materials, etc.?
Competitive Analysis
To determine direction and market strategy, it is imperative to analyze other competitors and respective market share if the information is available and relevant.
Company’s Competitive Strengths and Weaknesses
When addressing a new market, it is important to analyze how the company stacks up against the competition, as well as whether the company has any glaring weaknesses that may be too difficult or expensive to overcome.
Products/Product Family within the Market or Market segments
The senior managers will have to decide if there is a good fit with the existing product line(s) and what modifications, if any, will need to be undertaken within the line.
Marketing & Sales Projections
As a key component of the marketing strategy and plan, realistic market and sales projections will need to be developed. Again, this is part of the decision process to enter a new market or not. However, once a decision to proceed is reached, the marketing and sales projections will initially be developed by the marketing department. Once the product(s) are launched, the sales department will handle ongoing sales projections. Perhaps, some of the data is not readily available. This might necessitate conducting a formal (or even informal) market study to determine potential demand.
The Marketing Support Materials and Personnel Training
If entry into a new market requires a dramatically different approach, such as using the internet in different ways, the company will need to assess what marketing communications materials and media will be required for market entry. Further, if the product is so different from the existing line, there will need to be training materials developed to conduct employee training sessions.
Marketing Budget & Staffing
Typically, this is an integral part of the business plan along with the market/sales projections that ultimately will be one of the cost and revenue components justifying market entry. This should include every expense that would be associated with the marketing department. Certainly, all the other cost or expense centers will also have to be accounted for within the context of a larger business plan and specifically the financial plan, as well. Also, the SBA offers guidance on how to develop a marketing budget.
Ultimately, a new marketing strategy and a business plan are in some ways very similar. However, the difference is that the business plan will consider all departments and cost centers, whereas the marketing plan will address only those issues dealing with product placement, market size, sales projections, and marketing communications. The marketing planning vehicle is a strategic tool to help guide management and the company in general, in exploiting new and existing markets.
