Marketing Planning - Where are you now?
As promised, step 1 in my marketing planning framework poses the quesion: where are you now? Also know as a situation analysis. If you've missed the introductory blogs you can find out all here.
Now, in my quest to keep things simple, I am not asking you to write up a detailed situation analysis for your marketing plan. Nonetheless this section may be the most time consuming part of the whole process. What you learn here will guide your decisions in the latter stages and, done properly, will increase your chances of success.
You need to be looking critically at all the factors that anchor you where you are right now:
- Your current portfolio and how it is performing - features, pricing, revenues, profitability
- What do you know about your target market, your customers? Who are they, where are they, how do they behave?
- Who are your competitors? What are they up to and what can you learn from them?
- And what else is going on in the environment around you that is impacting you now, or may do shortly?
As you investigate your landscape you will need to make notes - if only of the conclusions and insights you gain. Some of the answers to be found rely on you gathering data from within your business and examining it to see what it tells you - financials and purchasing patterns, for example. Some research you can do online, e.g. looking at competitor websites and other activities. You can talk to your customers and find out what they like or dislike about the services you offer. And you can stay in touch with industry and business news through magazines, newspapers and the media generally.
There are a myriad of books and papers and models written by academics to help with the process of organising the information you gather, and equally as many people writing about the pros and cons of each. They all have their limitations, but if the option is to use something simple with some flaws against not bothering at all I'd recommend the former!
Porters Five Forces, the Generic Strategy Model, Product Positioning Maps all have their place (and we do cover these in our training) but the following tools are the ones that we would recommend to get you started structuring your situation analysis.
In truth this subject needs more air time than I can give it today, but as marketers we use segmentation to group customers so that we can identify them easily, create propositions that meet their needs more effectively and communicate with them appropriately.
It is wasteful to direct your marketing activity to the whole population. No matter what the size of your business you need to be tailoring your services and promotions to that discreet group of people who need to know and will be most likely to want to respond.
Using your existing customer data, feedback from previous marketing promotions and market research, you should aim to describe your target market(s) in as much details as possible using the following criteria:
- Demographic - age, sex, religion, race, family
- Socio-economic - income, occupation, education, class
- Geographic - country, region, urban/country
- Location - type of area (poor/rich, etc.)
- Lifestyle - hobbies, activities, etc.
- Motive/occasion - what are they buying for?
- Personality - outgoing, eccentric, reserved
- Industry type, technology
- Company size - turnover, employees
- Role - finance, IT, marketing, etc.
Don't worry about narrowing down the field - that is exactly the aim. You are not saying that people who don't fit the profile can't buy from you, just that your resources are not going to be targeted towards them. It is a perfectly acceptable strategy to target a 'niche' - a small but profitable segment.
Note: profitability is key - see next section.
An important spin-off from your market segmentation is understanding how many people actually fit the profile(s) you have defined. I have lost count of the number of companies I speak to who are targeting such small segments that they cannot sustain a profit for their business.
Once you know the type of customers you are targeting you can research how many of them there are using library services, trade associations, even social media.
You need to be certain that there is enough business potential. If in order to make a living you need to be achieving an extraordinary market share this should ring alarm bells!
This tool has the advantage that it is very widely known - probably because it is simple to use.
Internal factors relating to your business are categorised as strengths or weaknesses (or positives/negatives) and external factors as opportunities or threats.
Traditionally drawn as a four box matrix, it invites you to organise your thinking using short phrases rather than lengthy discussions.
You can then take decisions based on maximising the strengths and capitalising on the opportunities, as well as seeing what can be done to address or minimise the weaknesses and threats.
A more involved process, we like this tool because it allows you to put more objective measures against your assumptions and findings about competitors and is focused on taking the customer view. You start by identifying the list of attributes of your product or service, then you weight those based on the importance you believe your target customers place on each attribute (yes, this may rely on educated guesswork) using a decimal scale so that they total of all the weightings adds up to 1.0.
You then rate your own business and your selected competitors out of 10 against each factor, multiply the ratings by the weightings and see how you really fare when compared to your competitors.
Carrying out an analysis systematically like this means you can see not just how you fare overall, but where you do particularly better or worse than the competition. You can then take decisions to do something about it!
Another widely recognised tool - at its most simple it is a checklist to ensure that you have thought about all the environmental factors and trends that could be impacting your business right now or in the future. PESTLE represents:
- Political – taxation policy, government spending priorities, European, UK and local government objectives, grants, etc.
- Economic – interest rates, GDP growth rates, inflation, disposable income, unemployment levels etc.
- Social – life style trends, demographics, media etc.
- Technological – innovations, research funding, communications, internet/ecommerce /social media developments etc.
- Legal – employment law, competition law, health and safety, etc.
- Environmental – green policy, recycling, alternative energy etc.
The key reason for doing this is to help you identify opportunities and threats that you can add to your SWOT. When you run through the checklist don't get hung up about whether something is economic or political, nor should you worry about having something to say in each category. Focus on your business and your customers but keep an open mind.
This stage may take several weeks to complete and needs to be revisited regularly because nothing stays the same for long!
You may find that all your existing knowledge and assumptions are confirmed, alternatively you might find something to challenge those assumptions and set you on a new path.
The quality of the work you have put into this stage will make each of the next steps so much easier. Next time we'll move on to 'Where are you going?'.