Crafting a marketing plan that works

Black Enterprise, Nov, 1994 by Joan Delaney

Sales are falling. Customers are fleeing. Maybe it's time to reevaluate how you market your company's products and services.

Just as a coach adjusts his game plan at half time, so must an entrepreneur periodically update his or her marketing program to stay ahead of the competition. Jacob R. Miles III constantly monitors and upgrades the ad budget and distribution system of his Minneapolis-based toy company, Cultural Exchange Corp. He wants to push his full-product line of multicultural dolls, childrens, books and animated videos into the big leagues of the toy industry.

He's already met with some success. Miles, Cultural Toys product line is distributed nationwide in over 50 retail chains, and in just two years sales have swelled to $20 million. A key component to Miles, strategy: a well-monitored marketing plan.

Launched in Minneapolis in 1992, Cultural Exchange Corp. initially advertised Its product line in African-American magazines. In addition to promoting the line's multicultural features, these ads provided toll-free 800 numbers to help consumers locate stores where Cultural Exchange products were sold. "The calls also helped us track whether the ads were working," says Miles, a former senior operations director for Tonka Toys USA.

Recently, the company revised its ad budget, allocating $500,000 for syndicated TV spots that will be aired in major markets this fall during a national network television special. The product getting the full-time push? Cultural Exchange's first major toy line, Hollywood Hounds.

Today, Cultural Toys are sold at WalMart, Walgreen, Target and Dayton Hudson, among others. Banking on the premise that its plush dolls, preschool games and toys, like its Dinkytown Daycare Kids, help children build self-esteem and develop a passion for learning the company now plans to distribute its products through the top 10 mass merchandisers. "That's where the volume is. These merchandisers represent 50% to 60% of toy sales," says Miles.

And he's starting at the top - with Toys 'R' Us. "We showed our products and personally visited Toys 'R' Us headquarters in New York," says Miles. "We modified the packaging and they placed a $100,000 order. The big-time exposure enabled us to line up other merchandisers."

As Miles and many other fast-track entrepreneurs already know, a marketing strategy is a vital part of a business plan when you're starting out. But not if it sits dormant and dusty on some forgotten shelf To be effective, a marketing plan must be a living document, a responsive strategy that provides the fuel and direction that drives a company forward. To survive in these turbulent times, business owners must constantly track their customers, competition, pricing, distribution and market share.

That's why experts like Hal Goetsch, author of Developing, Implementing and Managing an Effective Marketing Plan (American Marketing Association, $49.95), advise business owners to evaluate their marketing program once a year.

"A marketing plan is not written in concrete. You need to continually examine your market and resources to stay viable," he explains. But to do that, you must begin with a sound program. A good marketing plan establishes a demand for a product or service and can forecast the business's potential to grow and develop. Simply put, developing a marketing plan involves identifying a niche, summarizing objectives, preparing a strategy and monitoring its success.

ESTABLISHING A WINNING PLAN

The first step to establishing a strong marketing plan is to do a complete audit of your market. Describe the past and potential growth of the market and identify current and future trends. Be sure you understand your customers. Demographic and psychographic information (i.e., buying habits) are extremely helpful. Identify your target customers, their per capita income, age, sex, geographic locations and attitudes. Include supporting research data gathered from trade associations, trade journals, government statistics and surveys. Describe the market size in terms of dollars and provide an analysis of your expected or current market share.

"This information helps you decide whether to enter, abandon or protect a market niche," says David H. Bangs Jr., a former commercial loan officer at Bank of America and author of The Market Planning Guide (Upstart Publishing Co., $19.95). Establish specific short- and long-term goals. They might include Increased unit sales, improved market share, greater profits or entry into new markets. If your goals are improved sales and profits, you'll need to create worst/best/most likely scenarios. Increase your usual profit percentage a tad and tack it onto your sales forecast to get an idea of future margins.

Make a list of possible barriers or challenges that will hinder you from achieving your goals. These might include cash-flow problems, personnel deficiencies or quality control problems. A savvy business owner knows his limitations and tries to overcome them.