marketing business plan

marketing business plan

The Power of Persuasive Marketing: Creating a Winning Business Plan

1. Introduction

The idea of persuasive marketing is not new. In the classic book “Test of a Consumer” McCann (1933) conceived the notion that consumer purchases were not purely functional and that consumers often bought in regard to how they wanted to be in contrast to how they currently were. He suggested a concept of “imagery transfer” wherein a product associated with desirable characteristics and benefits could cause the consumer to experience similar benefits upon its purchase and usage. This idea is now central to brand positioning strategies. A central developing theory at that time was the Limited effects theory. At a time when warfare was an intricate part of world events, and with one eye on the propaganda of the enemy, Hovland and colleagues attempted to understand how changes of opinion and the effects of propaganda might be understood and controlled. This research led to a Yale-based communication research program and to the development of the Hovland-Yale model of persuasion. This four-state hierarchical model has had a colossal influence on the understanding of consumer learning and attitude change and is central to marketing communications and advertising.

Marketing, in industry, essentially represents advertising and selling products. However, the scope of marketing is exceptionally broad. Marketing not only needs to inform, persuade, and remind consumers about products and services, but also to enrich understanding, shift attitudes, and shape collective beliefs about what an organization offers to target customers. The persuasiveness of marketing can take two forms – clear and strong, logical brand of persuasion, often called “hard sell” and “creative advertising”; or subtle and weaker forms of persuasion, sometimes referred to as “reminder advertising” and “point of sale”, influencing consumers who are already in a buying frame of mind for a particular product. Maibach and Parrott (1995) have described persuasion as a scientific and systematic attempt to change attitudes, beliefs, and behaviors. Marketing is therefore applying persuasive tactics and strategies to try to change consumer behavior for short and long-term benefit to the firm, usually at a cost to the consumer. This essay will consider the various forms of persuasive tactics and its importance to marketers, drawing from various related theories and examples.

2. Market Analysis

Utilising a mix of the above four factors, a strategic focus on particular target markets can be achieved. This will make it easier to differentiate between groups of consumers and how consumer needs differ. For example, a computer software company has a product that monitors security and activity of children on the internet. A particular market would be parents with children who have internet access, through to teenagers and their schools. This product helps parents safeguard the security of what their children are exposed to on the internet. This is a broad market, but no doubt it is easily accessible. The software company could further customize their software to cater for teenagers and their schools. This market would be easily accessible and quite larger than the previous market. This is a good example of differentiating consumer needs and defining various target markets.

Segment and target markets are analysed in terms of number of people in the total market, specific demographics, and volume of sales expected. Topics to cover include: – Market segmentation – Target market – Product positioning

Your market analysis should answer the following questions before concluding: – Is there a group of individuals or firms that share a similar need? – Can the group be reached through persuasive communication and distribution? – Are they large enough in number to support a mix of cost-effective marketing and sales efforts? – Is it a group that is easily accessible? (socially, physically etc.)

3. Strategic Marketing Tactics

Niche marketing can be an efficient and cost-effective method, in comparison to mass marketing, which can prove both costly and risky.

The first tip is to target a specific niche. The reasoning behind this is that customers in this niche will often share similar interests and values. It has been proven that a group of consumers with shared culture and background will exhibit a strong buying preference. It is usually cost-effective to create a marketing strategy that caters exclusively to this group.

Pursuing strategic marketing tactics is a vital part of any successful business. One has to be both creative and intelligent while figuring out how to market their quality product. It is too easy to overexert one’s resources, spreading them too thin and effectively hindering the product’s chance of success in the market.

4. Financial Projections

It is important that the financial projections directly and logically coincide with the rest of the business plan. For example, it would make no sense for a project/sales something to be forecast in five years’ time to take place in the first year of the financial projections. The income statement and cash flow statements should be built on a product line basis so that they are detailed and easy to follow.

Assumptions are the key factor in financial projections, as it is impossible to predict future results. A set of educated assumptions must be formed. This typically involves a base case and best/worst case scenarios with a detailed set of plans for each, showing that you have thought through the potential future outcomes of your current day decisions. It is also crucial to back up your assumptions with logical arguments. For example, a start-up IT company saying that they will have allocated a $3k monthly expense to advertising media. What sort of media, and will this draw revenue?

1. The income statement, which details revenue less expenses, showing a bottom line net income. 2. The cash flow statement, which is a representation of cash moving in and out of the business. This is crucial as it shows the solvency of the business in future months. Profits from income statements can be quite misleading if cash transactions are not factored in. 3. The balance sheet, which is a reflection of the company’s net worth at any given point in time, showing the sum of assets and equities or liabilities.

There are three primary financial statements that need to be addressed in a business plan:

Financial projections: One thing that often gets overlooked in the course of creating a business plan or in the acquisition of capital is the financial projections section. We have to be honest with ourselves when we say, “We don’t have a crystal ball that can give us an exact picture of what’s going to happen in the future.”

5. Implementation and Monitoring

One highly important area of a marketing plan is to spell out the methods that will be utilized in implementing the marketing strategy. Without strategies, a plan is merely a document. The most creative and brilliant marketing strategy will fail if done incorrectly or if not implemented at all. What are the marketing tactics? Be very specific. A tactic is how a strategy is executed. If the strategy is to increase market share, describe the exact method you will employ. An example of a marketing tactic is a TV commercial with a series of print ads. Pretty generic and a lot of companies use this. Now this is where the marketing plan becomes specific to the product being marketed. In the previous example with the marketing strategy, increasing market share, a company will most likely use a marketing tactic of increasing the price, as this method has a high rate of success. Now it gets somewhat complicated now to where it is product specific. With the increase in price, an elasticity of -0.5 or greater is needed. Now another example here will be for a product launch of a high price/high quality item coming into a market predominately saturated with low cost/high quality items. Simulation of Manufacturing, which encompasses a rather large arsenal of tactics, could provide a high market share increase if the time frame is not too late compared to competitor product offerings. The point is, the more specific the plan is to the product, the more the likelihood of success of the tactic. Failure in the tactic phase can often result in the entire strategy being deemed a failure, so it is crucial that tactical methods are fully understood and followed. A method to evaluate each tactic in framework is often undertaken. This could be a budget oversight with a certain tactic specifying the amount of spending is to be in a certain area of the marketing mix. Failure of the tactic can often be traced back to a deviation from the marketing plan, and this is a good measure of damage control to go back and follow the plan.