How do I get started in writing a marketing plan?

This is a multipart question so Ken will address it in stages over the next few posts.  We’ll start with the fundamental issue: Do you really need a plan?

There are a lot of books that will provide you with a template of what goes into a marketing plan. Usually, they break the plan into five basic parts:

1. Business review with subsections on the market size, the competition, market segmentation, customer attitudes, relevant technological trends
2. Business objectives – what you think you can achieve in terms of financial outcomes (e.g. profitability, revenues and possibly cash flow) and market performance (e.g. market share, market development)
3. Marketing Objectives and Strategy – the marketing-related outcomes (e.g. awareness levels, trial rates, loyalty rates) that you need to hit for the business objectives to be realized and the broad brush approaches you’ll take to achieve those objectives
4. Marketing Tactics – the specific programs, campaigns or projects you’ll use to execute the marketing strategy along with implementation budgets, schedules and human resource needs
5. Financial Outcomes – the conversion of your assumptions about (1) thru (4) into estimates of prices, costs and volume or, taken collectively, how much profit you’ll make at the end of the planning period

This may seem like a lot of details. But you may not need to put everything down on paper or even have a formal plan. I say this because while planning is something I would advise everyone to do, the writing of a formal marketing plan may not be necessary.

Plans are devices to assist in communications. So the question to ask is “with whom am I trying to communicate”? If the plan is going to someone outside – for example, a banker or investor – then you likely do need a formal plan to explain to them the logic behind your need for funds (i.e. your strategy and supporting tactics) and the return on that spending (sometimes called “ROI” – return on investment or “MROI” – marketing return on investment).

The formal plan is required due to the fact that this audience does not live and breathe your business everyday and thus they likely do not know many things that you know. By contrast, if the audience for your plan is you alone, then the formal outputs you probably need are the “project plans” that constitute your tactical programs and an overall master marketing calendar so you can see how things are distributed over the year and can quickly see up-and-coming events as you plan your day-to-day work schedule.

Check out Ken’s video on planning a marketing campaign:

But, again, this doesn’t mean you can avoid planning: just that you don’t have to document everything in the same detail. You still need to do planning in order to:

1. Organize your assumptions about the business
2. Determine whether you are happy with how things are going or need to make a major change
3. Crunch the numbers to see whether the outcome is good enough to satisfy you

In between these two extremes are situations where you have a staff. In these cases you do need a formal plan to communicate both “who does what” and “why”. However, more important than the plan is the process you use to develop the plan. This usually means a group planning session where your staff can contribute to, debate and hopefully agree on the business review and business objectives. Group involvement is essential since (1) they deal with the issues everyday and thus should have deeper knowledge and (2) the likelihood they will commit to following through on the plan is largely tied to whether they feel the assumptions behind the actions (they’ll be ask to execute) are “logical”.

The output of those group discussions provide the inputs to whoever is responsible for marketing, marketing objectives, strategy and tactical plans are appropriate ONLY to the extent that they serve the broader business issues. These marketing elements can then be reviewed for financial implication with your finance person, accountant or whoever you use to handle the “numbers”.

The process shown in Chart 1 show the flow that is usually recommended:

Note that while the chart does suggest a sequential flow of steps, the reality is that it usually becomes an iterative process once you get past the “Strategic Plan Section”. If, as a result of your first pass through the tactics you find that budget numbers don’t work out, then you would review the “tactical plans” to see whether they are all necessary or could be made more efficient, this is followed by another round of number crunching. The process continues until you have an acceptable financial outcome. However, the strategic section does not change…you can play with the numbers but you never disguise the reality the marketplace presents!

Coming next week: Planning and Profit Projections – the Base Case

We have a winner!

Raj Kashyap of Kashyap’s Pharmasave is the winner of this week’s prize draw. Raj has chosen a one-year online access subscription to Patient Connect DDI, a one-year subscription to Canadian Business magazine, and a one-year subscription to Money Sense magazine for his prize package.