The Marketing Plan and the Four P’s
The marketing plan section of the business plan demonstrates how a company will penetrate the market with its products and services. The marketing plan must include “the four P’s”: product, promotions, price and place.
Products and/or Services
The first “P” stands for Product, but includes all the products and services the company offers. This section of the business plan should detail all the features of the products and services, how they work, their unique/proprietary attributes, etc. For products of a proprietary and/or technical nature, drawings and supporting materials must be submitted in the Appendix.
Most growing companies offer certain products and services today, but expect to offer more in the future. It is important to mention current and future products/services here, but focus primarily on the short to medium term horizon.
specials
Promotions include each of the activities that induce a customer to buy the company’s products and services. Promotional activities could include advertising, public relations (PR), free samples, discounts, direct mail, telemarketing, partnerships, etc.
This section of the business plan discusses what promotions will be used and how they will be used. For example, if partnerships will be used to gain new customers, the plan should explain which companies are partners, how they will be able to provide new customers, how the partnership will function (operationally/financially), etc.
This section should be as specific as possible, particularly when it comes to discussing future promotions. To say that a company is going to generate public relations in specialized magazines is simply too vague. Rather, the plan should explain the type of article/article that can be written about the company and why, which specific trade journals will be targeted, and/or projected publication dates.
When looking at how the business will be promoted, it is important to look at how the business will be positioned. This positioning statement details the attributes that customers will assign to the company, its products and services. The choice of promotional activities should support this positioning. For example, discounts may not be consistent with the desire to be considered a luxury brand.
Price
This section of the plan should detail the price points at which the company’s products and services will be sold. If the products/services are sold in packages, these must be detailed in this section. Justification for price should be given where applicable (eg why the company has chosen an initiation fee plus monthly membership fees instead of a one-time lifetime membership fee).
Square
The final “P” stands for “Location” or “Distribution” and explains how a company’s products and/or services will be delivered to customers. This section is crucial because if customers can’t access products and services, they can’t buy them.
This section is especially critical for high-growth, capital-constrained companies. Finding profitable distribution channels is often the most difficult challenge for these companies. Examples of distribution methods include retail stores, websites, distributors, wholesalers, direct mail catalogs, etc.
Many companies have multiple distribution methods to deliver their products and services to customers and each should be detailed here.
Detailing the “four P’s” in your marketing plan is critical to demonstrating to investors that your business will be able to penetrate their market efficiently and effectively.