The marketing portion of a business plan addresses four main topics: product, price, promotion, and place.
A business plan is a blueprint that takes an idea for a product or service and helps make it a commercially viable reality. The marketing portion of the business plan addresses four main topics:
- Product: What is the good or service that your business will offer? How is that product better than the competition? Why will people buy it?
- Price: How much can you charge? How do you balance sales volume and price to maximize income?
- Promotion: How will your product or service be positioned in the marketplace? Will your product carry a premium image with a price to match? Will it be an inexpensive, no-frills alternative to similar offerings from other businesses? What type of advertising will you use? When will ads be run? How will the product be packaged?
- Place: Which sales and marketing channels will you use? Will you sell online, in a retail outlet, or both? Which channels will let you economically reach your target audience?
You should use the marketing section to explain how you will get people to buy your product or service in sufficient quantities to make your business profitable. In preparation, you will need to complete the following:
- Market analysis: Assess the market environment in which you compete, identify your competitors and analyze their strengths and weaknesses, and identify and quantify your target market.
- Marketing strategy: Explain how you will differentiate your business from your competitors' businesses and what approaches you will take to get customers to buy from you.
- Marketing and sales plan: Specify the nature and timing of promotional and other advertising activities that will support specific sales targets.
Market plan analysis
How do you determine if there are enough people in your market willing to purchase what you have to offer at the price you need to charge to make a profit? The best way is to conduct a methodical analysis of the market you plan to reach. A market analysis presents your conclusions regarding external market factors that will affect your business. It examines the totality of the business environment in which you will compete.
Topics addressed in the market analysis include the existence and type of competitors, the characteristics of your target customers, market size, distribution costs, trends in your industry, and trends in the market in general. Much of the information that will be included in the market analysis can be derived from a SWOT (strengths, weaknesses, opportunities, threats) analysis to be performed early in the planning process. The purpose of the market analysis is to set the stage for presenting your marketing strategy. That strategy sets forth your plan for successfully competing in your selected market.
Note: Business plans generally have market analysis as a separate, standalone section. However, it may help to weave some of the key insights from your analysis to support the points you are making in the marketing plan section of the plan. For more information, see What are the elements of a business plan?
Marketing business plan strategy
Your marketing strategy is the approach you plan to take to provide products or services to your customers. It explains, at a high level, what you are going to do to get your customers to buy in the desired quantities. Someone who reads your market strategy should come away with a "big picture" view of how your business will present itself to the market segment that is relevant to your business. For example, the target market for a pickup and delivery service may be busy individuals and households who are looking for convenient, time-saving solutions. You should assess both the merits and the risks of your enterprise in the marketing strategy. Some potential areas to address include -
- Who are your target buyers
- The market segment in which you'll compete
- The reasons why the product or service you offer is unique
- Your pricing philosophy
- Your plans for market research
- Your ongoing product or service development plans
You may find it useful to keep in mind the four Ps of marketing: product, price, promotion, and place. Do this as you define the scope of your marketing business plan strategy. Be sure to stress what is unique about your business.