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A marketing plan increases brand awareness by telling a target market who your company is, what it does and why it’s qualified to do what it does. By conveying this information to potential customers, a brand generates sales leads that move through a sales cycle until they become “sales ready.” When the leads become willing to purchase a product or service, a business closes the sale. The effectiveness of a sales cycle in producing revenues and business growth depends on an appropriate marketing mix -- the four P’s—that make up the marketing plan.
The Four P’s
The marketing mix consists of price, product, promotion and placement -- the four P's -- which are the essential elements of a marketing plan. A marketing mix is target-market and retail-outlet specific. This means it contributes to the conversion of a sales prospect to a customer willing to buy a specific product, which, in turn, supports the revenue and growth goals of the company that sells the product or service through a certain outlet.
Set the Price
The first of a marketer’s challenges is setting a price that covers costs, reflects the popularity of a brand relative to that of its competitors and that’s reasonable, considering the financial wherewithal of the customers. To set a marketing plan's price using the markup pricing method, a company sums the costs of its property and equipment, loans, inventory, utilities and salaries, as well as the costs of product shortages, damaged products, employee discounts, the cost of goods sold and desired profit. After you’ve sum all costs, you calculate the unit sales price by dividing total costs by the number of products to be sold to obtain a unit cost and adding the desired profit-per-unit to the unit cost. For example, if unit cost is $50 and the desired profit is $10 per unit, the product price is $60.
Determine the Product
To identify the product your company will sell in a particular market, ask, “What consumer problem do I want a product to solve?” and “How do I want the consumer to benefit from our company’s product?” Next, ask, “To what customer demographic should the product appeal?” Once you have narrowed the range of products the company might sell, ask, "What features might a customer seek that this product doesn’t have?” Doing so will help you decide if you want to offer one product or many. Expanding a company’s product selection is a way to increase sales to existing customers. It may also increase the frequency of purchases because some products can be used for a variety of purposes. In addition, the larger a product range, the more likely a store will attract new customers.
Select the Product Promotion
The third element of the marketing mix is product promotion. Considering the product a company will sell, its probable appeal to a target customer and its price, the company determines how to promote the product. For example, a business might launch an online marketing campaign using websites, email and mobile channels or opt for traditional advertising using print or television and radio broadcasts. Selecting the right product promotions ensures the company makes the best use of its time and money.
Define the Product's Placement
The final P in a marketing mix is product placement, which refers to where a product will be available for sale. For example, as a company creates a marketing plan, it may decide to sell a product online through its website or through those of online merchants. As an alternative, the business might sell the product online and to retailers with storefronts. A product’s target market, price and promotion will influence its placement. For example, a heavily discounted product is more likely to appeal to thrift-store customers than customers of a high-end retailer.
Billie Nordmeyer works as a consultant advising small businesses and Fortune 500 companies on performance improvement initiatives, as well as SAP software selection and implementation. During her career, she has published business and technology-based articles and texts. Nordmeyer holds a Bachelor of Science in accounting, a Master of Arts in international management and a Master of Business Administration in finance.