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Start
A Home Business
Developing
a Marketing Plan: The Next Step
by Jeff Cohen
Many people include their marketing plan as
a section in their business plan. Really, though, marketing
is important enough that it deserves a plan of its own, separate
from the technical details of the business. Here’s what your
marketing plan should include.
Your Marketing Strategy
It might sound silly, but it’s good to get the core of your
marketing plan written down, just so people can see what the
rest of your plan is aiming at. Keeping your strategy in mind
can also be good when you receive offers to place ads here,
there and everywhere – you can ask yourself whether it really
fits in with your overall strategy.
Your Competitors
You should have a list of everyone in your area who could
be considered to be a competitor, followed by how you plan
to differentiate yourself from them.
Advertising
Your marketing plan should contain a comprehensive list of
all the advertising you plan to run. This includes a website,
advertising in newspapers, leaflets, and so on. For each method
of advertising you should list an estimated cost, and the number
of customers you expect the advertising to bring in. This allows
you to work out your ‘cost of acquisition’, which is how much
you need to spend on advertising to bring in a customer. The
market works so that this cost will be more for higher-end
customers, and less for lower-end customers.
Pricing
Your marketing plan should also list all of the pricing policies
you plan to have, as well as any special offers that you think
will increase revenues. That doesn’t mean that you can’t make
up new offers later, but it’s still good to have some on the
plan for the long-term.
An Example
The Catering & Cake
Co.: Marketing Plan
Strategy: Our marketing strategy will be to advertise sufficiently
that we will be the first company coming to mind when catering
is needed in the Anytown/Othertown area. Marketing will be
targeted to individuals arranging weddings and people planning
corporate events, so we will always be looking out for new
ways to reach these customers. We will not repeat any marketing
effort where the COA proves to be more than 20% of the profit
those customers provide.
Competitors: In the Anytown area, the established catering
companies are Rebecca’s Catering and Coolfoods. Rebecca’s Catering
mainly cater for low-end corporate events, while Coolfoods
specialize in food for children’s parties. Our position in
the middle-market means that we would be unlikely to provide
children’s birthday cakes, and could provide a higher-quality
alternative to Rebecca’s Catering for corporate customers.
The company that we believe would be our main competitor is
Luxury Food and Cakes, based in the Othertown area. They serve
the same kinds of food we plan to, and to similar events. However,
we differentiate ourselves from them by offering our food at
far lower prices. While they use more expensive ingredients,
our taste tests have shown that most consumers are unable to
tell in blind taste tests which food costs more. Offering mostly
indistinguishable quality at a lower price gives us a powerful
way to move in on Luxury’s customers.
Advertising (in
order of decreasing cost-effectiveness):
- Leafleting.
$0.01 printing per leaflet, 10,000 leaflets, plus delivery
at
$100 = $200. Projected 50 customers. COA $4.
- Local newspaper.
$500 per half page, run once monthly. Projected 100 customers,
COA $5.
- Corporate mailshots.
$0.10 printing per mail, 100 mails, plus delivery at $20
= $30. Projected 3 customers,
COA $10 (however,
customers are high-value).
- ‘Weddings’
magazine. $200 quarter page, quarterly. Projected 20 customers,
COA $10.
Pricing:
- Basic
catering: cost + 50%.
- Deluxe catering:
cost + 70%.
- Cake: cost
+ 100%.
- Large cake:
cost + 80%.
- Personalized
cake (large only): cost + 120%.
Special
Offers: Business is slower in winter than in summer,
so there are special winter deals. For example, we plan to
offer ‘every third person free’ on basic catering to give extra
value for corporate functions in the winter months (November,
December, January, February). There will also be a ‘free champagne’
offer with the deluxe catering in these months.
# # # # # SolveYourProblem.com : 2007
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