Writing a Marketing Plan

this is a sample of a marketing plan that was developed to gain grant aided funding for a company designing and manufacturing computer related items.

The application was successful and the company gained the funding.

It also shows the structure of a simple marketing plan and the associated costings required.

Executive Summary

Company X International is a new company established to exploit the product design talents of Owner X and Owner Y. The company has developed a number of computer related accessories of which Product X is the flagship product.

With successful marketing, Company X would be expected to develop their reputation within the computer accessory industry and also provide the working capital to continue development of the current, and future, ranges of products.

Financial Objectives

Company X is a unique computer related product designed and manufactured within the Barnsley Borough. It consists of a computer mouse mat and an integrated dust reduction cover, which is designed to keep the mouse clean and the operator's hand warm.

With the rapid expansion of home and business computers and accessories and the related increase in relatively expensive Internet Scrolling Mice, this product is seen as both a fashion accessory and a cost saving purchase for the serious user.

The goal is to achieve sales of 45,000 units (to a potential 10 million computer users) in year one. This would achieve a gross profit of £172,500. Graphs are attached to indicate the Forecast Sales by Unit and Revenue and a Forecast Profit and Loss Account for the firs trading year.

It is anticipated that competitors will rapidly join the market; therefore all activities are front ended for maximum effect. The pricing policy has been decided on to offer the product at a relatively high price until all customers who need the product at any price will buy it (skimming). As competition enters the market it may then be possible to reduce prices based on larger production quantities to expand the customer base.

Market Overview

Information Communication Technology (ICT) is now considered to be the single fastest and most potentially profitable market sector in existence. With the current Government, and European, thrust towards bringing ICT to the person on the street, it is anticipated that 50% of all homes in the UK will have a computer within the next 2 to 3 years.

It is Government Policy that all children in schools will have access to computers and the Internet in the foreseeable future.

Since the launch of the iMac, some 2 to 3 years ago, it has become fashionable for manufacturers to produce ICT equipment in bright translucent colours and the trend has extended to all forms of accessories from printers (Epson in particular) to Scanners (Agfa Snapscan with 8 interchangeable handles to 'match your mood and PC'

The ICT market represents approximately £2,000,000,000 sales on equipment alone during the next 2 years in the UK. Unfortunately many of the smaller companies that set up in business to take advantage of this market survive for less than 18 months due to the low margin on reselling, the competition that already exists, pricing policies of competitors, the rapidly changing technology which dictates fast moving lines and the broad band similarity of many of the products offered.

Company X is in a position to take advantage of the ICT market for the following reasons

A unique, design registered product that has little or no direct competition if marketed aggressively (the standard mouse mat does not give the retailer or consumer the same benefits)

Relatively high initial margins and low cost of manufacture. This can allow large amounts of profit to be generated quickly with relatively low market penetration.

Target Customers

Potential customers for the Company X fall in to 3 different areas

General Public

Initial market research indicates that the profile for potential customers is: Male; 25-35; computer literate, ABC1C2's and interested in being 'one up' on their peers.

Observed sessions at W H Smith indicate that this initial market research is accurate and that the vast majority of people who read and buy computer magazines in-store fall within this profile.

The most obvious promotional media for this group would therefore be established and popular computer magazines. The thrust of the promotion could be the uniqueness of the product, the fact that it matches their 'modern' equipment and lifestyle and the fact that it is different

Further, limited market research, has indicated that a 20-30 age range, who spend many hours on the Internet or playing computer games, have indicated that they do suffer from cold hands while on the computer. This again could prove to be a USP for Product X.

Business Users

Business users are more concerned with the benefits to productivity and comfort, rather than the fashion aspect of the product and therefore larger organisations with clearly defined health and safety policies or qualified Investors in People would be identified as the target market.

The thrust of the promotion would be the increased comfort and efficiency of the product and the fact that it helped prevent mouse ball sticking, a common problem in high capacity work areas such as offices, studios, media, etc.

IT or Office Equipment Manufacturers and Suppliers

Typical examples include Compaq, Hewlett Packard and Epson (manufacturers) and Viking Direct, Office World, PC World and Staples (Suppliers or Re-Sellers).

The relatively low cost of print on Product X allows the opportunity to supply 'bespoke' products advertising an infinite number of companies. Unlike the normal mouse mat, where the message is covered by the hand and mouse (and eventually dirt and dust) Product X has the message on top of the dust reduction cover (and therefore always in view)

Many of the above named companies seek original methods of promoting their image and Product X is an ideal product to help them in accomplishing this. The promotion to Manufacturers and Suppliers would therefore be through Exhibition and direct contact with major organisations.

Features and Benefits of Product X

Benefits of Product X would be perceived as different depending on the profile of potential customer, therefore 3 areas should be considered:

For the private user the main perceived benefits would be increased comfort, convenience and work efficiency ñ however the fact that Product X is a unique product that would allow the customer to be first to own one should not be underestimated

The primary benefits offered by Product X to the business user are increased comfort, convenience and work efficiency. The comfort benefit relates to the way in which the housing would provide the user with a means of protecting his (or her) hand from draughts and other environmental conditions that might cause cramping or other forms of discomfort, particularly when the mouse is used over any extended period of time. The convenience of the Product X is the speed of assembly and ease of use ñ it is in fact no more difficult to assemble and use than a standard mouse mat. Increased efficiency comes from the protection offered to hand (from draughts) and mouse (from dust and environment). It is not unusual to find that a mouse in a working environment begins to stick and jerk after as little as a few weeks, unless the operator is aware of how to cure this it may involve time and money by calling in a computer technician (in some cases the operator simply continues without complaint assuming this is the norm). Company X is designed to prevent this.

The main perceived benefits to the Manufacturer or re-seller are the ability of the Company X to advertise and promote their product or service and the uniqueness of the design itself, which provides a novelty value to the end customer.

Promotional Methods

Because of the wide range of potential customers 'test marketing' should be carried out through a variety of media.

Advertising for 'off page' sales in a computer magazine.

This would be directed at the private user and prices would be at the RRP of £9.99 per unit

Negotiations are currently under way to advertise Product X in PC Direct Magazine, one of the market leaders with a monthly readership of 136,000.

It is intended to publish a series of 3 advertisements to gauge response, although an anticipated response of only 1% will give sales of £13500 per month

Attendance at Exhibitions and Trade Shows

It is planned to attend an Autumn Computer Fair at Birmingham NEC in September

This Fair attracts suppliers, resellers and members of the general public. The intention is to create awareness throughout the industry that Company X exists.

Although the Sales Forecast is shown to increase slightly in September it is anticipated that the main benefit to Sales will be experienced in December.

Internet e-commerce

It is planned to register Product X as a domain name and to develop an e-commerce Internet site to promote the product, both to the Trade and general public.

Registering with a number of search engines will provide worldwide access to Product X.

Strict monitoring of response will be an integral part of the web site design

Catalogue Sales

This will target the end user on a direct sales basis.

Negotiations have been made with Innovations catalogue who would be prepared to feature the product. Fulfilment would normally be direct from Company X International.

Local and Regional Trade Directories

Thomson Local is being considered in a number of areas, although the timescale for the launch and distribution of Product X may not be compatible with the publication of Thomson Local Advertisements it would be seen as a longer term means to promote the company and their future product ranges.

Direct Mail

This method would be used to target a clearly identified range of potential trade customers (probably no more than 20 per month initially)

The intention would be to gain interest and set an appointment with them to sell Company X to their purchasing department on an initial trial basis, moving on to larger orders after that.

This would require designing and printing of a leaflet and a direct sales letter and later lead to the employment of a sales representative (possibly on basic plus commission).

Timescale for Marketing

By the very nature of the product, the ability of any potential competition to launch a similar product and the need for fast penetration of the market place, all activities will be front-ended and it is intended that all 3 groups of potential customers be approached at the same time.

Planning and payment for the September Exhibition will begin in May 2000 and it is intended to advertise in PC Direct, Thomson Local and Innovations with immediate effect.

Direct Mail will begin immediately approval for the Marketing Plan has been given.

Marketing Budget

Initial costings are as follows:

PC Direct Magazine Advertisement, Including all design, film and booking charges

3 off £10,516.25 inc VAT

12 off £32,054.00 inc VAT

Exhibition Attendance

Including all rental costs for space, Display Units, Design, Furniture and Equipment rental, Accommodation, Van Hire and literature requirements

£12,300 inc VAT

Innovations Advertisement, Including all design, film and booking costs

£4700.00 inc VAT

Internet Web Page, Including Domain Name Registration, Design and Hosting for 12 months

£468.83 inc VAT

Thomson Local

Per insertion for each area is £555.00 plus VAT, based on a 10 area coverage in the main populated areas.

£6521.25 inc VAT

Direct Mail Campaign

Based on 20 per month over a 6 month period, including all design, artwork, printing and postal costs

£540.00 inc VAT

TOTAL MARKETING BUDGET FOR 2000 = £56584.08 including relevant VAT