Maximize your marketing budget

Every good marketing program begins with a plan – a means of allocating the limited resources of your marketing budget.

Think of this plan as a big recipe. Into it go all the ingredients that influence customers to buy your product or service over somebody else’s.   

Experts put these ingredients, these marketing variables, in four categories called the Four P’s:

1. Product (name, packaging, sizes, features)
2. Place (inventory levels, channels of distribution, locations, transport)
3. Promotion (advertising, publicity, sales promotion, personal selling)
4. Price (discounts, credit terms, warranties, returns)

When you shop for your marketing variables, you have a limited budget. You can only spend so much on each ingredient. For instance, if you put all of your budget into packaging, you may have a product that really stands out on store shelves, but no money to promote it.

Meanwhile, your competitor may have used his budget to offer more features or more sizes. Or devoted some to advertising, some to promotions, some to discounts. Ultimately, he attracts more customers.

The secret, then, is to balance the marketing variables and emphasize those that are most important to your customers. This requires a plan.

The marketing plan

What does a marketing plan look like? Despite myriad variations, every good plan has certain basic elements:

• Executive summary
• Situation analysis
• Objectives
• Strategies
• Tactics
• Budget

Executive summary 

One page summarizing the circumstances and principal recommendations contained in the plan. Allows everyone to grasp quickly the main thrust of the plan. Usually written last.

Situation analysis   

Contains three basic elements:

1. Industry analysis (e.g., the government is about to slap a tariff on foreign-made gimcracks, or the cost of raw materials is expected to double over the next year).
2. Your company’s strengths and weaknesses versus the competition.
3. Recent sales and profit results.

Objectives 

Where you want to be and when you want to get there.

• Is the purpose of your marketing plan to launch a new product or line of products? If so, your objective might read: “Achieve 10 percent market share within the first 12 months of product launch.”
• Is the purpose of your marketing plan to boost revenue from existing products? Your objective then might read, “Increase revenue 12 percent from our line of products over the next six months while maintaining current profit margins.”    

Notice that each objective is quantifiable and features a limited timeframe. It makes your objectives definable and measurable. It also lets everybody know how they’re doing along the way.

Strategies   

Those things you need to do to accomplish your objectives. If your objective is where you want your company to be, the strategies are the route you need to take to get there. For example, if the objective is to increase sales revenue, your strategies might be:

• Increase promotion spending to buy market share
• Hunt new customers
• Harvest more sales from existing customers
• Introduce new products to attract new customers
• Merge or acquire another company

Tactics

Specific actions. Your website is a tactic. A brochure is a tactic. An ad in the newspaper is a tactic. Promotional pens or t-shirts with your name and logo on them are tactics. While objectives and strategies are conceptual visions, tactics are the tangible fulfillment of those visions.

Budget 

Each tactic has a price. Add up all you plan to use and you know what your budget must be to achieve your goals.

What if your tactics are beyond your budget? How do you choose the right mix of ingredients to create the most profit? Simple. You prioritize those tactics you believe will have the greatest impact on your prospects, and on your bottom line.

Eliminate the others and you are left with the marketing ingredients in your recipe for success.

Robert Grede, author of “Naked Marketing – The Bare Essentials,” taught marketing and promotion at Marquette University for many years. He operates The Grede Co., a Milwaukee-area consulting firm specializing in marketing and strategic planning. He can be reached at: rg@TheGredeCompany.com.