PRODUCTION HER PHOTO RAN IN ENTREPRENEUR'S NOTEBOOK ON BOTH MARCH 30 AND APRIL 5, 1998
By BETSY VAVRIN
It's almost November. Two months remain in 1998. Have you prepared a strategic marketing plan for 1999?
If not, you are probably not alone. But now is the time to get started.
We all know it is pretty hard to navigate unfamiliar territory without a map, so consider your strategic marketing plan your map. It keeps you on the right road. It helps you check the landmarks along the way. It directs you to your goal.
As with any plan, you first want to assess your current situation. Review your company's position in the marketplace. How do you stack up against the competition? How do your sales compare? What are your capabilities vs. theirs? Compare your company on as many levels as possible. The goal is to know what your company's strengths and weaknesses are compared to the competition. This will allow you to identify the challenges that lie ahead.
In addition to sizing up the competition, it is important to review industry trends. What are some of the issues and opportunities of your particular industry? Is your industry experiencing growth, or is it declining? Assess the economic factors that may impact your industry and your company. If you are in a technical field, are you finding it hard to attract well-trained employees? Are there supply problems with a component of your product? If you are in a service industry, is there still a strong demand for your particular service?
You will also want to look at seasonal and technological factors that may impact your business in the upcoming year. This will help you stabilize your cash flow if there are severe seasonal changes. It will also help you budget for needed equipment if industry changes indicate there will be technological advances affecting your sales. In addition, investigate any upcoming regulatory issues positive or negative that will impact your business.
Lastly, analyze your distribution channels. Are they cost effective? Do they provide you with a niche opportunity compared to the competition?
Don't overlook the opportunity to learn from your employees and customers. They already have a relationship with you and can determine firsthand what you are doing right, and what you need to change or eliminate. An annual customer and employee survey (two separate surveys) are indispensable to learn how you are doing with those who count the most, and whose opinion you should respect.
Once this analysis is completed, it is time to assess your target market. Do you know who your best customer is? Do you know if it is satisfied with your product or service? You will want to evaluate your company's past sales trends, as well as check industry studies, to thoroughly answer these questions.
This research will pay off as you prepare for the year ahead. You will be able to assess your company's strengths, weaknesses, opportunities and threats. Once this research is complete, you will be ready to outline the marketing tools you will use to capture business in 1999.
Will you continue to use newspaper advertising and the yellow pages? Are there new marketing tools you haven't used, such as the Internet? Have you thought of direct mail or statement stuffers? You need to evaluate what has worked in the past. If you aren't using some kind of tracking system to evaluate the money you are spending on advertising, how do you know if your investment is paying off for you?
How much should you spend on advertising? In a typical business, you will want to spend no more than 4 percent to 6 percent of your annual sales. Keep this in mind as you review your past advertising program. Have you seen a return on this investment?
Also, look at what the competition is doing not to duplicate their efforts, but to learn from them. How often do you ask yourself "why are they advertising there?" Or, "I wonder if they are getting any business out of that?" If the competition seems to "own" a publication because their ads are so prominent, use the guerrilla marketing technique. Think of what you can do that is different and better to get your target customer's attention.
Beyond advertising, think of other marketing tools available. Often overlooked is public/community relations. Your customers tend to believe what they read more than what they see advertised. There is an implied endorsement. What community causes or non-profit organizations should your company support to differentiate it from your competition?
If your business has a very narrow customer focus perhaps you want to attract CPAs or financial planners consider what kind of training or featured guest speaker you could offer them in a seminar. The costs may seem high the average cost per impression will certainly be higher than your typical advertisement but you are speaking directly to your target customer.
This is known as "narrowcasting." Considering that the average advertisement is seen by a number of people who simply aren't interested in your product or service. This investment has a much higher probability of translating into sales.
When you consider your media mix the combination of advertisements, promotions, public relations, special events and direct mail remember the importance of frequency. Repetition is crucial to effective advertising. A potential customer must see your name (via ads, direct mail, public relations, etc.) at least seven times before he or she will remember seeing the ad.
Your media mix works most efficiently for your company when the same message is included in all of your media. It reinforces your message. For example, your advertising message should be consistent in your ads, your direct mail, your collateral or brochures, and the public relations messages you are distributing. Your customers will then see your message more frequently and it will be more memorable, which will hopefully make them take action to buy your product or service.
As you can see, there is plenty to do in the months ahead. However, your discipline in developing a marketing plan will pay off in business results.
Betsy Vavrin is president of SMC Marketing in Studio City, which specializes in developing marketing and customer retention programs for national multi-unit companies, non-profit organizations and smaller, single-site businesses and retailers.
Entrepreneur's Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact James Klein at (213) 743-1759 with feedback and topic suggestions.
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