OPERATING PROCEDURE: # MSP-001

SUBJECT: Development of a Marketing Plan

Note:

This material was developed for Simplified Business Systems (SBS) and may be used the Utah Small Business Development Centers as a tool for consulting clients. If you are not part of the Utah Small Business Development Center network please contact SBS at (801) 698-4011 for permission before using this material.


1.0 INTRODUCTION

1.1 This Operating Procedure provides general guidelines for the development of an Annual Marketing Plan.

1.2 Plans, which are subordinate to, or annexes of, the Marketing Plan, are included in this procedure in the attached “Generic Topical Outline”.

1.3 Planning is an essential element of management. Management of the marketing and sales function consists of:

1.3.1 Developing, creating and/or documenting Plans / planned actions

1.3.2 Implementing and executing the Plan(s)

1.3.3 Controlling the Plan(s) by measuring results against goals or objectives and instituting corrective action when negative variances occur

1.4 The three (3) main considerations that, in general, distinguish the marketing and sales management function from the management of other functions are:

1.4.1 The Product (and/or Service) Mix and the allocation of department resources to each product line.

1.4.2 The Markets, Channels of Distribution, Methodology (segmented, stratified, etc.), et al. which should be attacked and the degree of intensity of the attack.

1.4.3 The Marketing Mix; that is, which weapons (price, sampling, demonstrations, free goods, etc.) in the marketing and sales arsenal should be deployed against each target market. The mix selected should be the one that is expected to optimize profitability.

2.0 PURPOSE

2.1 The primary purpose of a written Marketing Plan is to assure the company’s sales and marketing activities are carefully matched with production, finance, personnel and other functions of the business for the maximum possible contribution to overall goals and objectives of the organization.

2.2 Another important purpose of the Marketing Plan is to present the precise sales and marketing results to be achieved in the time period covered (usually one year) and to carefully describe the actions to be taken which will affect the results.

2.3 The act of writing the Marketing Plan must be a disciplined activity; the discipline, when properly followed, enhances, rather than inhibits, creativity.

2.4 The Plan should not be constructed to document the past.

3.0 DEFINITIONS PLAN TYPES

There are two distinct types of Marketing Plans required which, depending upon size of the organization (see “4.4“, below), may be completely separate documents or merely sections of the same Plan. The type of topics presented in the plan would include:

3.1 The Standing Plan: The contents of this plan are the basic sales and marketing policies and procedures. This should be reviewed annually, but, in general, remains unchanged for long periods of time. The Standing Plan provides guidance for development of all other marketing, and marketing related, plans; the typical contents of a Standing Plan would include, but would not be limited to:

3.1.1 The authorized and correct usage of the Company Logotype should be detailed in the Standing Plan.

3.1.2 The Terms and Conditions of Sale, by channel of distribution, would be another topic properly presented in the Standing Plan.

3.2 The Operational Plan: This segment contains the detailed actions and activities that are to be taken with regard to the time period and/or product line under consideration. It incorporates the relevant (i.e. applicable) factors from the Standing Plan. Typical detail presentations within the Operational Plan include:

3.2.1 Staffing requirements and/or reassignments; what positions shall be responsible to assure implementation and continuation of the Plan

3.2.2 Specific Budget allocations

3.2.3 Positioning of the product or service and the Unique Selling Proposition

4.0 CONTENTS

4.1 The Plan should contain a complete description of all actions and activities required to achieve the Plan’s stated Goal. It must be:

4.1.1 Complete: The Plan should contain sufficient information that anyone with a sales or marketing background could effectively manage the activity described.

4.1.2 Detailed: If there is a concern as to the depth of detail required in the Plan, the decision should always be on the side of more, rather than less.

4.2. The Objectives of the Sales and Marketing efforts, for the period under consideration, should be clearly stated.

4.2.1 Components of the Marketing Mix are rarely identical from organization to organization. Each unique blend of marketing and/or sales “tools” are developed to accomplish, complement or compensate for the company’s (a) competitive position, (b) strengths and weaknesses, (c) personal skills and abilities of company personnel. On the other hand, certain “mix” components are almost universal; these include:

4.2.1.1 Advertising (in any or all manifestations; space, broadcast, direct mail, car cards, etc.)

4.2.1.2 Special Promotions.

4.2.1.3 Personal selling Direct contact with Prospects to Open, Persuade, and Close

4.2.1.4 Price, including all Discounts.

4.2.1.5 Use of any component (“tool”) in the Marketing Mix will cause the company to incur a cost. Therefore, the challenge of marketing and sales management is to determine the optimum mix that will result in profit maximization in both the near term and the long term.

4.2.2 The character (or “culture”) of the Industry, as well as the environment in which it operates, must be understood in order to effectively and efficiently market the company’s products and/or services.

4.2.3 Sources of information from which Industry information may be obtained include Industry and Trade Journals and research with past, present and potential customers.

4.2.4 Identify major trends affecting the Industry and for the business in which the company is engaged.

4.2.4.1 Find out about these trends by reading industry journals, and obtain information on the needs, wants and desires of customers and suppliers.

4.2.4.2 Strategic, and/or tactical, decisions must be rendered accommodate, or counter-act, the trends which have been identified as having the greatest impact on your Industry.

4.2.5 Competitive analyses must be an on-going process. This includes having up to date information on competitors and the personnel within those companies.

4.3 The Plan contains the marketing strategy and tactics that must be implemented. To assure implementation:

4.3.1  It is important for the Marketing / Sales Manager to spend a fair amount of time with the President of the company in order to ascertain his or her philosophy, views, objectives, desires, etc. and to obtain the President’s endorsement. The most successful Marketing / Sales professionals will also develop support for the marketing strategy, from all key managers within the company, during the planning process. Company-wide support greatly increases the probability of effective implementation.

4.3.2  Graphic presentations and other visual aids should be used frequently within the company as the plan is developed and implemented. These types of tools make it easy for all individuals in the company to understand the approach and methods that are being employed in the marketing effort, and how each particular area of the company is being used and included.

4.3.3 In order for a marketing strategy to be considered complete, the plan must be implemented in the form of a program, or list, with time specific actions to be accomplished.

4.4 Finally, the contents of the Plan must be appropriate to the Company, the “Audience” and the Industry. Sales and Marketing personnel need to be effective communicators.

4.4.1 A ten (10) page Marketing Plan may be appropriate to one endeavor while a two hundred (200) page Plan is marginally sufficient for another.

4.4.2  The appropriateness of language is another critical consideration. If polysyllabic words are not frequently used in the company culture, do not include them in the Plan.

5.0 TOPICAL CONSIDERATIONS

5.1 Attached to this Procedure is a Generic, Topical Outline for the development of a Marketing Plan. Each topic must be considered and it is highly recommended that negative responses also be written.

5.2 The topics stated in the attached outline apply to any and all Plans: Standing, Operational, Product Launch, et al. Note, for example, in the “Background” topic description the term “entity” is used. This term is interpreted as “company” in the Standing Plan, whereas, in a Plan for the Launch of a New Product, the entity is the Product.

6.0 SUMMARY / CONCLUSION

6.1 In order for a plan to be valid it needs to be committed to writing.

6.2 This Procedure, together with the attached Outline, provides the information and methodology to create an effective Marketing Plan, Sales Plan, and Advertising Plan.

6.3 Entrepreneurs must resist the temptation to shortcut the planning process; specifically justifying spurious actions through reverse planning. That is, stating the manifest (successful) result of a “good guess / chance event” was the result of a Plan.

6.4 Marketing Plans, and special purpose Sales and Marketing Plans, when properly developed and implemented, are effective management tools. They can generate profits and/or prevent/reduce losses.

7.0 OUTLINE ATTACHED Entitled: “Annual Marketing Plan: Generic, Topical, Outline”

(M-002)

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