How to build a marketing plan in 5 steps

Creating an effective marketing plan typically involves the following steps:

1Conduct a SWOT analysis

Look at your own strengths, weaknesses, opportunities and threats (SWOTS):

Strengths are factors that improve your position in the marketplace. These can include skills, capabilities and proficiencies that can’t easily be copied by competitors, such as low production costs due to superior technology.

Weaknesses are factors that reduce your ability to achieve your objectives, such as unreliable delivery or outdated production tools.

Opportunities are ways your business can grow and become more profitable. These might include entering new markets or adopting new technologies.

Threats are factors that could have a negative impact on your business in your primary markets, such as labour shortages or detrimental economic/political developments.

Because your strengths and weaknesses are defined in relation to your competitive environment, as part of this step, you’ll also want to conduct a competitive analysis to gain a complete picture of where you stand in the marketplace.

2Profile your customers

Organize your current customers into three or four main groups − perhaps by industry or transaction size. Then drill down into what defines the customers in those groups: who they are, what they want, how much they buy, the information they use to make purchasing decisions and so on.

Example of a customer segmentation table:

This is your opportunity to demonstrate that you know your customers inside and out. Paint a robust picture of them, including characteristics such as age, gender, profession, income level, education and geographic location. It’s also important to understand what motivates them to buy. Ask yourself why they would choose your products − and what might keep them away from your competitors.

“This is often the ‘a-ha’ moment,” says Mallika Kazim, BDC senior business advisor. “Many entrepreneurs think all their customers are the same, but that’s not true. By refining your customer segments in this way, it makes it possible to prioritize and apply your marketing dollars much more effectively.”

3Set clear objectives

What do you want to achieve with your marketing plan? Make sure those goals are attainable and realistic. For smaller entrepreneurs, business and marketing objectives are often one and the same. That means you can use the sales targets from your business plan for this step, such as those related to:

  • Market share
  • Total number of customers and customer retention rate
  • Average purchase size

Not all your objectives have to be financial. Set other kinds of targets, too, such as for digital engagement. Can you quantify your interactions on social media in terms of followers, shares, retweets, comments and likes? Your website also offers important metrics, so you should use tools such as Google Analytics that allow you to track visitor numbers and conversion rates over time. These may not directly affect your bottom line, but they are important indicators on the health of your brand.

4Address the “four Ps” of marketing

Once you know your goals and who you want to reach, it’s time to make some strategic choices about how you’ll do that. For each of your customer segments, Kazim suggests going through the “four Ps” of marketing to determine the best ways to meet their needs:

Product: What product or service will best meet their needs? Will you need to tweak your existing offering to better stand out in the marketplace?

Pricing: How much will you charge? Could you make changes to your pricing to increase your competitive advantage? Pricing is typically based on how much something costs to make, market, distribute and sell, and also on the profit margin you want to achieve.

Place: Where do customers search for, choose, buy and use your product or service? Are your offerings available where customers are most likely to find them? Be sure to consider both physical and online places.

Promotion: How will you communicate and sell to your customers? This is what most people think of when it comes to “marketing” and can include advertising, in-person sales, public relations, social media marketing, email marketing and other promotional tactics.

Be sure to include timing for all the tactics you’ve identified and assign someone within your business to be responsible for seeing them through.

If you’ve built good profiles and know what makes your customers tick, it should be instinctive to figure out how best to reach them.

5Create a budget

How much will it cost to execute each of the tactics you’ve identified? Consider everything that might be involved − from copywriting and graphic design to the customer relationship management (CRM) tools you’ll need to adopt.

Creating a budget is often the most challenging part of marketing planning for many entrepreneurs, says Kazim, especially if they haven’t done it before. Her advice, again, is to keep it simple.

As a general rule, she says a minimum marketing spend of one per cent of topline revenue is typical across most industries.

“It’s not a full-blown financial plan,” Kazim explains. “All you really need is a budget. You’ve mapped out your goals. Now figure out the costs associated with achieving them.”

She also reminds entrepreneurs to get buy-in from the bookkeeper or chief financial officer − whoever handles the money for the business − as they’re the ones who will sign off on the proposed budget.