UPGRADE Magazine

Cooking up a Marketing Plan

By Valorie Cook Carpenter, Principal, Market Savvy Consulting

Allocating scarce marketing dollars among the myriad choices of marketing programs available today is a daunting task, further complicated by business volatility that often dictates last-minute changes to previously-approved plans. Here's a primer in putting together a marketing mix that will maximize your success.

Who's Your Target Customer, and How do They get Information about Your Product or Service?

Who your target customer is and how they prefer to learn about and buy your product or service will determine 90% of your marketing mix. Therefore, your first step is to develop a concise and unambiguous written description of your target customer. This may be harder to do than it sounds. For example, "small business" is totally useless -- even dangerous -- as a definition of a target customer for marketing purposes.

People who work in small companies define themselves by their specific business (i.e., restauranteur, florist, CPA, architect, etc.) and job function (owner, office manager, etc.). Marketing campaigns which attempt to speak to a vaguely-defined target are misguided and a waste of precious marketing resources. So take the time and invest the effort in clearly defining target customers whose specific needs can be spoken to in a concise and compelling way.

Having done so, you next need to understand how your target customer learns about products or services such as yours. Do they surf the Web? Listen to the radio? Read newspapers? Magazines? Attend trade shows? Seminars? Read email or mailed material? Visit stores?

For example, if you are selling a high-end, mission-critical system to MIS professionals, talking with some representatives of this group can reveal that they attend vertically-targeted seminars and conferences which are designed specifically to meet their information needs, that they regularly read certain publications such as Information Week and CIO magazine, etc. In contrast, if you are selling a shrink-wrap product through retail to employees at or below the department manager level, the most effective way to reach them may be drive-time radio.

Only primary market research among your target customers can tell you for sure -- this is not the time for what consumer packaged goods companies call mother-in-law research, or worse yet, internal staff debates. Get out there and talk to some real people about how they get information on products or services similar to yours.

What Timeframe are You planning for?

Marketing programs budgets in most software companies are generally set yearly during the annual planning process, then reviewed quarterly in view of the actual performance of the business as compared to plan. As the largest discretionary (i.e., non-headcount) budget most software companies have, the marketing programs budget is a tempting target when the company is falling short of its revenue and profit goals.

This can be a crazy-making situation for the marketing group, since most marketing programs are planned and committed to well in advance (3 to 6 months). It is very difficult to cut the events budget once the trade show has already taken place! And even if the program has not fielded, canceling it or making major changes at the last minute can result in expensive penalties (such as pulling out of committed advertising or trade show exhibit space) and damaged relations with key marketing vendors that can limit the effectiveness of future efforts. So, I advise senior management to be aware of these long-term consequences as you contemplate how best to reduce expenses in the short term.

What's Your Objective?

Let's assume for the purposes of this article that you are a product manager responsible for allocating the marketing budget for your product or service among different marketing programs. This is in contrast to the task of the marketing VP, who in a multi-product company must allocate the marketing budget between corporate and product requirements as well as among the various products (which is a different article).

Once you know who your target customer is and how they prefer to obtain information on products and services such as yours, you can set strategic objectives for your marketing programs. Are you introducing a brand new product which is pioneering a new category? Then perhaps maximizing awareness among key influencers in your industry should be your top goal. Or, maybe you are bringing out version X of your existing product, and want to maximize the number of your existing customers who upgrade. These objectives lead to very different marketing plans.

The Elements of the Marketing Mix

Here's a list of commonly-used marketing vehicles:

  • public relations
  • packaging
  • traditional and web-based advertising
  • direct mail and email
  • in-store merchandising
  • sales literature (data sheets, brochures, etc.)
  • promotion
  • trade shows
  • seminars
  • web site
  • In every market research study I have conducted in the personal computer software industry since 1982, the two greatest influences on target customer purchase decisions are friends and associates, and reviews and articles. Both of these influences are driven by public relations, since friends and associates read reviews and articles to get their information. This means PR should always be your #1 marketing priority! Fortunately, it is also a very cost-effective marketing tool, at least compared to other vehicles such as advertising, in-store merchandising and direct mail.

    For a product whose primarily sales channel is retail, packaging and in-store merchandising are also critical to success. Alternatively, a product that is licensed by a direct sales force to large corporations may be best supported by seminars to generate leads and very polished sales presentations and brochures to follow up and close with.

    Thresholds and Budgets

    It is important to understand that marketing investments are often not linear. There are thresholds below which it is not worth investing at all. For example, if you can only afford to run an ad once or twice in a single publication, it is probably not worth the cost of producing it. Similarly, if you can only afford a 10' x 10' table at a major trade show, it is better not to exhibit on your own, to avoid communicating to your target customers as well as your industry and competitors just how small and insignificant a player you are. Rather, partner with a major distributor, larger software company, etc., have a suite, or don't attend at all.

    I recommend that companies with limited budgets (and that's just about everyone, isn't it?) focus on doing a few things well rather than trying to field a small effort in many vehicles.

    Pilot Programs

    It is always advisable to test new marketing programs before implementing them broadly. On the one hand, it is traditional in our industry to say, "There isn't time!" to test a new concept. On the other hand, I have seen many very expensive programs fail in the marketplace for reasons that were not anticipated but that a pilot program could have surfaced. One of my favorite expressions is, "There's never time to do it right but always time to do it over!" Finding ways to preview your major marketing initiatives -- through primary market research, running it in a small geographic area or with a small chain, etc. -- will pay off handsomely in the end.

    A Word about Traditional versus Web-based Marketing Programs

    I view web-based marketing opportunities as no different than traditional ones. That is, they need to be evaluated by the same criteria, i.e., marketing effectiveness/ROI, fit with strategic objectives, etc. Unless your business is done exclusively on the web, and maybe even then, your business will be best served by critically examining your investments in cyberspace rather than reacting to all the hype and diverting significant resources from more traditional marketing vehicles.

    Designing the Mix for Maximum ROI

    Once you know precisely who your target is, how they will learn about and buy your product, and what your objectives are, you can design the marketing mix that will maximize your results within your approved budget.

    Start by brainstorming the possibilities, then prioritize your list in order of marketing effectiveness. Then, and only then, put budgets to the items on your list. Draw the line where the budget is exhausted, and reconsider whether it makes sense to do some of the items above the line at all or at lower cost in order to fund items below the line -- sometimes it does, and sometimes it just doesn't. This iterative process will yield a marketing plan that maximizes your return on your precious marketing dollars.

    Putting It All Together - The Power of Synergy

    The best marketing mix is carefully crafted with synergy in mind, such that the sum of its parts is greater than the individual components. One way to achieve this is to create a marketing "theme" for all marketing programs during a given period. That theme should be manifested in both words and graphics/colors, taking into consideration the specific marketing vehicles (i.e., packaging, in-store merchandising, advertising, etc.) in which it will be implemented.

    Innovate, Implement, Evaluate

    Marketing is all about innovation, looking to the future, and being aware of what is happening in the marketplace. While it's generally true that there are no new ideas, there are many ways to apply tried-and-true marketing principles to build your business long term with fresh and exciting marketing programs. A process of innovation, followed by outstanding implementation and thoughtful evaluation, will insure that you are getting the most from your marketing investments, year after year.

    About the Author

    Valorie Cook Carpenter is a consumer retail marketing expert and a frequent contributor to Upgrade magazine. She is principal of Market Savvy Consulting in Los Altos, California, (www.MarketSavvyConsulting.com) and can be reached at (650) 941-0487 or vcarpenter@aol.com.

    This article is taken from the April 1999 issue of Upgrade Magazine.

    1999, Software Publishers Association. All Rights Reserved.