Describing your marketing strategy in a business plan can be simple but should include thoughtful research. Your target market drives your marketing strategy so it's important to include some research about the people who you expect to buy your products or services. Thinking about how many customers you expect annually will also lead you to more accurate financial predictions. Think about:
- What influences your target market? Trends, research, innovation?
- Who are you marketing your products or services to? Parents, business owners, women?
- Budget: what % of your budget do you intend to spend on marketing?
Subsections should include:
Overall Market Size
- How many potential customers do you have in your geographic region?
- What % of the market do you expect to capture?
For example, a spa in a rural tourist town might contact the Chamber of Commerce to find out tourist information and add that to year-round resident information: "The town's permanent population is 10,000 with 50,000 tourists annually. In its first year, the Company expects to capture 5% of the town's population (500) as annual members and 30% of the tourist population (15,000) for one-time visits. Approximately 30-50 customers are expected each day, depending on the season."
Market Segmentation and Target Market
Focus this section on:
- Demographics:
- Age
- Income range
- Gender
- Occupation
- Marital status
- Family size
- Ethnicity
- Education
- Geographics:
- Area served: neighborhood, city, region
- Density: urban, suburban, rural
- Nature of the location: downtown, business, shopping, residential
- Transportation: how can customers and employees access the store (walk, drive, public transportation)?
- Lifestyle
- Family status (single, newly married couple, empty nest)
- Hobbies, sports, entertainment interests
- Television, radio, magazines, and other media preferences
- Political and other organization affiliation
The US Census: American Fact Finder can be a very helpful tool for general market research.
Another great way to figure out detailed information about your target market is to consider the magazines they might read. In addition to a possible advertising opportunity, this can also be an easy target market research tool. Magazines usually have a section for their advertisers (media kit) that includes market research about their readers. Organic Spa Magazine is an example, detailing useful information about their readers; this is a good indication of the target market of an organic spa business in many locations.
Marketing
What strategies do you have to educate your customers to buy from you and how will you retain customers? Marketing strategies should make sense for your target market.
- Social media
- Online advertising
- Print media
- Networking events
- Cold calls
- Referral incentives
- Frequent buyer discounts
- Signage
- Events
- Cross promotion with other businesses
Price
Include information about how you developed your pricing strategy (cost, gross margin objectives, market prices, perceived value, competitor research). Including your actual pricing menu can be helpful, depending on how detailed it is (more details can be included in the Appendix of your business plan). Retail operations should include the markup % and how that was determined.
An effective marketing strategy is crucial to a successful business plan so take a little extra time to research and convey that you are well-prepared to effectively reach your target market.
This is part 7 of a 9 part series, beginning with: Eight essential elements of a business plan
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