A lot of people think that marketing in business means advertising. Actually, advertising is part of marketing, but there’s a lot more to it than that. When you write the marketing section of your business plan, you should look at a number of main areas, including:
- market analysis
- the target market
- its segmentation
- the competition
- a SWOT analysis
In order to learn about these various components you’ll need to do some research. Secondary research is what you do with your computer, reading trade journals, and maybe visiting the library. It’s gathering together information that’s already been compiled. You just need to figure out exactly what you want to learn about your potential market. Sometimes you’ll want to do primary research. That means discovering new information on your own. It consists of doing surveys by phone, mail, or in person, or maybe setting up some focus groups. Basically it’s you asking potential customers or clients if they would buy your product or service.
In the market analysis section of your business plan, you need to identify how many potential customers or clients there are in your selling area. If what your selling already exists under another brand name, find out exactly who buys it and how much. Look at the areas in which your product is better or worse and try to calculate how much business you could take from your competitor. If possible go back several years to look for trends and incorporate the research data you found.
The target market refers to who would actually use what you’re selling. When you’re writing your business plan, you want to include every detail you can. Things like gender, age, spending habits, income bracket, married or single, occupation, children, where they live, all are important to know. Looking closely at who uses your goods or service tells you how to attract more people like them. If you’re selling to another business, you’ll want to know the size, how they use your product or service, what their growth potential is, what kind of marketing gets them to buy, and who their customers are. In either case, you want to know the approximate size of your market so you can project sales.
Your target market may also be segmented. Finding out about segmentation, and including it in the marketing section of your business plan, helps you to be even more specific. Maybe only people of a certain age want your product. Maybe they will only pay a certain amount for it and no more. Perhaps your goods or service appeals to only one gender. If you can narrow your focus it will save you time and money in going after people who wouldn’t be customers. Most likely you will appeal to several segments, just try to include all of them in your business plan.
You definitely want to learn all you can about your competition so that you can do a better job of selling your superior product. If they are a large corporation, you’ll be able to find out a lot about them by doing some secondary research. If they are a small company, some of the best people to talk to are their customers. If you use the right approach you’ll learn what they like and don’t like about your competitors. It will help you know how to market to your audience.
There is a nifty little tool you can use for business and for looking at your own life: it’s called a SWOT analysis. The letters stand for strengths, weaknesses, opportunities, and threats. A lot of people are now adding a second “T” for trends. To use it you just draw a little table with two rows and two columns. The rows are the internal attributes of strengths and weaknesses. The rows are things that take place outside your company but still affect it; opportunities and threats. If you add trend, that’s also a row and is an external feature.
Once you’ve made your chart, you just start listing things in each category. It’s a simple but very effective way to quickly analyze your position as a company. You’ll see where you’re doing well and where you can make some improvements. By looking at the things outside of your business, you’ll see where you need to be careful, as well as some advantages you may not have thought of.
Include as much information as possible in the marketing section of your business plan. It definitely gives you some of the most important information pertaining to your company’s potential for success.