A business plan provides important information to a potential lender as well as to the business’ management team. One of the key components of such a plan is to determine who or what is the company’s target market. This is the customer base that most likely will come in and buy from the company. Once this group is identified, a strategy must be developed to market to those people. To understand what marketing strategy is within a business plan better, consider the following.
Define the Target Market
Before a marketing strategy can be put into place, the business must define the target market, or the customers it will focus advertising on during campaigns for maximum results. This is done through market analysis and market research. The process develops a clear image of who the most likely customer is, how that person will interact with the company, and where the business can interact with this person. Understanding this allows for a marketing strategy to be developed.
Positioning Strategy of a Company
A component of the marketing strategy is the positioning strategy. Positioning a product simply means that the business works to get the product or service in front of the company so he or she can experience it, learn about it, and eventually purchase it. This is determined by first considering the motivations of the customer. Outline what the customer’s requirements are for purchasing the product. It also requires consideration for competitors.
Pricing the Product
Another component of the marketing strategy outside of positioning is pricing. Product pricing will have a direct effect on the success of the organization. Pricing must meet the costs of the company while also being affordable enough for the customer. The pricing must be competitive compared to other businesses as well. Some methods of pricing strategy include cost-plus pricing, demand pricing, competitive pricing, and markup pricing.
Once pricing and the target market are identified, the next step is to focus on advertising and marketing. An advertising budget must be put in place. The product’s brand, packaging, and overall design must be considered. Sales promotions, which tend to offer discounts, coupons, or contests, are also a component of the marketing strategy. The promotional plan should outline how the company will market the product to the target market specifically. It should include aspects of brand development, which will encourage customers to come back to the business every time a need is present.
Within the business plan, the marketing strategy is defined and includes all of these elements. The goal is to show readers, who may also be lenders, how the company will invest in marketing and advertising of the product or service to achieve the best return. This step can only be taken once the target market is identified through competitive market analysis. Often research firms are employed to conduct this evaluation on behalf of the business.
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