To write a truly effective marketing plan for your business, you must have the basics in place first. One of the most basic, yet often overlooked elements of a marketing plan is the situation analysis.
This situation analysis will provide the context for the proposed plan of action and must be fact-based, not theoretical. This analysis will include basic market and product information, as well as current and anticipated market conditions, the implications they hold and any major opportunities or risks that may be forthcoming.
Your situation analysis will include the following sub-sections:
- Business/Product Review
- Market Analysis
- Competitive Overview
- Consumer Profile
Let’s look at each section in a little more detail.
Questions to ask and answer include: What product service am I offering? How does this meet the needs of the market? Do I have a core product with secondary or supporting products or a complete product line?
The key in this section of your marketing plan’s situation analysis is to clearly define exactly what your business offers and what value you provide to your customers.
What factors will affect your ability to become and remain profitable in the current marketplace? What is the size of your potential consumer market? Are there internal or external factors that affect your business’ performance? What sociological or economic factors may affect your customer’s ability to do business with you?
Who are your main competitors? What approach are they taking to reach the same consumer profile as you? What advantages do they have over you? What weaknesses exist that you may be able to exploit?
Also consider what secondary competitors exist – those businesses competing for the same budget allocation, regardless of their specific product or service offering.
Who is your primary target market? Who is your secondary target market? What demographic (attributes & characteristics) and psychographic (preferences & biases) similarities exist that could help or hinder your ability to market effectively? What is the potential size of your market?
How will you get your product to market? Do you require distributors or other intermediaries or will you sell direct to the consumer? In either case, what factors could impede your ability to deliver your product to market?
Although the situation analysis may seem complicated and involved, it is one of the most important marketing plan basics you will need to include in order to effectively develop a marketing strategy and tactical programs.