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The
Marketing Plan and The Four P’s
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by:
Dave Lavinsky
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The Marketing Plan section of the business
plan demonstrates how a company will penetrate the market with its
products and services. The Marketing Plan should include “the four P’s”
– Product, Promotions, Price, and Place.
Products and/or Services
The first “P” stands for Product, but includes all products and
services that the company offers. This section of the business plan
should detail all the features of the products and services, how they
work, their unique/proprietary attributes, etc. For products that are
patented and/or technical in nature, drawings and backup materials
should be presented in the Appendix.
Most growing companies offer certain products and services today but
expect to offer more in the future. It is important to mention both
current and future products/services here, but to focus primarily on
the short-to-intermediate term horizon.
Promotions
Promotions include each of the activities that induce a customer to buy
the company’s products and services. Promotional activities could
include advertising, public relations (PR), free samples, discounts,
direct mail, telemarketing, partnerships, etc.
This section of the business plan discusses which promotions will be
used and how they will be used. For instance, if partnerships will be
used to secure new customers, the plan must explain which companies are
partners, how they will be able to provide new customers, how the
partnership will work (from operational/ financial standpoints), etc.
This section must be as specific as possible, particularly as it
relates to discussing future promotions. To say that a company is going
to generate PR in trade magazines is simply too vague. Rather, the plan
must explain the type of article/feature that may be written about the
firm and why, which specific trade journals that will be targeted
and/or the projected publication dates.
In discussing how the company will promote itself, it is important to
discuss how the company will position itself. This positioning
statement details the attributes that customers will assign to the
company, its products and services. The choice of promotional
activities must support this positioning. For example, discounts might
not be consistent with a desire to be considered an upscale brand.
Price
This section of the plan should detail the price point(s) at which the
company’s products and services will be sold. If the products/ services
are sold as bundles, these should be detailed in this section.
Rationale for the pricing should be given when applicable (e.g., why
the company has chosen an initiation fee plus monthly membership fees
versus a one-time lifetime membership fee).
Place
The final “P” refers to “Place” or “Distribution” and explains how a
company’s products and/or services will be delivered to customers. This
section is crucial because if customers cannot access products and
services, they cannot purchase them.
This section is especially critical for high-growth,
capital-constrained companies. Attaining profit-effective distribution
channels is often the most vexing challenge for these businesses.
Examples of distribution methods include retail locations, website,
distributors, wholesalers, direct mail catalogs, etc.
Many companies have multiple distribution methods to deliver their
products and services to customers and each should be detailed here.
Detailing the “the four P’s” in the marketing plan is critical in
proving to investors that your company will be able to efficiently and
effectively penetrate its market.
About the author:
GT Business
Plans has developed over 200 business plans for clients that
have collectively raised over $750 million in financing, launched
numerous new product and service lines and gained competitive advantage
and market share. GT Business Plans is the sister site of GT Venture Capital
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