SOSTAC is a widely used tool for marketing and business planning. It is among the most popular marketing models that have stood the test of time.
In this article, you will learn how to develop a marketing plan to promote a company using the SOSTAC model.
Created back in the 1990s by author and speaker PR Smith, the SOSTAC® framework has earned a good reputation among authorities. It is used as a basis by business representatives of various sizes, including start-up entrepreneurs or international organizations around the world.
The SOSTAC marketing plan addresses six key areas, namely:
Stage 1. Analysis of the current situation
The first stage of marketing planning is to analyze the current situation. This is an overview of your project - who you are, what you do and how your online sales happen. External and internal factors affecting your business are also considered.
This section is intended to paint a general picture of your project. To do this, consider the following questions:
- Who are your clients today (make a portrait of your target audience and their avatars).
- : What are the strengths, weaknesses, opportunities or threats to the entire organization?
- Conduct a competitor analysis. Who are your competitors? How do they create competition (eg price, product, customer service, reputation)? What are your key differentiators?
- Make a list of all the customer acquisition channels you use and how successful each one is for your organization. What works well and what doesn't?
Below we will take a closer look at an example of target audience analysis.
Target Audience
This section should analyze who your target audience is. This is important to clearly represent your existing customers and understand who you are actually targeting. If you work in a competitive environment, think about what your unique proposition () is, if you have one?
Customer personalization helps you see your existing customers and understand their motivations for purchasing. Creation will also help you overcome barriers to new clients. To create a series of avatars, collate and analyze your existing CRM system data and order history, and then build a profile picture of your existing customers based on that.
For online trading, information you may want to consider from your CRM system data may include:
- Male/female gender - what is the percentage?
- Age profile - what is the average age and is there scope for developing age group categories?
- Location/Address Data - The percentage of customers living in and outside your region.
- Purchase history. Create a clearer picture of purchase history, average order, brand preference trends, and products ordered by size, for example.
- Payment method for the purchase (for example, credit or debit card upon receipt).
- The route taken for the purchase. Have you made purchases through a search engine, email newsletter, affiliate site, or contextual advertising?
- Frequency. How often are purchases made?
Based on these data, we move on to the second stage. We need to turn this data into more personal information that can be relevant to your organization.
Creating Customer Avatars
For example, we have collected data about the target audience and now consider two avatars for a fictitious online t-shirt store:
Avatar A - Sergey:
Sergey is a professional, he is 28 years old, he rents an apartment in Moscow, he is a bachelor with a high level of income. He is very passionate about football. He loves to show his support for the football club by purchasing a new fan's shirt from the online store every year.
It is more convenient for Sergei to place orders online and communicate using social networks, where he follows the latest news in the world of football and the launches of football products. Since the World Cup provides an opportunity to introduce a collection of international fans' shirts, this allows Company X to contact Sergey and offer him an international fan's shirt in addition to his favorite club shirt.
Scenario for interaction of avatar A with an online store:
Sergei read the latest news about the World Cup on his favorite football blog. He noticed that the blog was offering an exclusive promotion - you can order any World Cup T-shirt from company X and save 10% by following the link to www.vash-magazin.ru/worldcup. Sergey follows the link and ends up on the website of company X, which provides him with a selection of T-shirts available to order with an exclusive 10% discount. He selects a T-shirt in his size and completes the purchase using his credit card.
Avatar B - Katya:
Katya is a professional, she is 33 years old, she is in a relationship. Katya loves to keep up with the latest fashion trends, and it is convenient for her to place orders in her favorite online store. Her boyfriend is a big football fan, he loves to keep up with football fashion and buy new fan T-shirts with the image of his favorite team. Katya may face the hype surrounding the World Cup. This will encourage her to shop at Company X for her boyfriend. She will purchase merchandise featuring the team they will be supporting during the tournament.
Scenario of interaction between avatar B and an online store:
Katya received an email from one of her preferred online stores. This letter includes a marketing promotion for Company X - an advertisement offering to order a World Cup T-shirt using a promotional code. She decides that this would be a great gift for her boyfriend and goes to the website www.vash-magazin.ru. She's not sure which team T-shirt she should order, so she calls customer service. She explains her situation to the sales consultant and places her order for the fan's T-shirt over the phone.
This way you have a detailed picture of your customers and can prepare appropriate advertising campaigns for them. To begin with, you can create 2-3 customer avatars for each group of similar products.
Stage 2. Setting goals
The second stage of your marketing plan system should focus on your goal. Once you have defined your goal, it is important to make it as precise and unambiguous as possible. To do this, the goal must meet the following points:
- Specificity. What specific indicator are you planning to work on within the given goal?
- Measurability. How do you plan to measure effectiveness? Will it be monitored through quantitative or qualitative analysis, for example?
- Reachability. Can you, in principle, achieve such a goal in the foreseeable future?
- Relevant and realistic. In this case, when developing a marketing plan, we mean the possibility of achieving this goal precisely with marketing tools, and not with development, for example.
- Time limit. Have you set a specific time period for the task to be completed?
For example, if we return to our fictitious online t-shirt store, we can create the following goals:
- Goal 1. Engagement: Increase the number of existing customers served through the online store by 50% by July 2017.
- Goal 2. Attraction: increase brand awareness in the period from April 2017 to July 2017, measure the parameter through Google analytics.
- Goal 3: Engagement: Increase email frequency from one email per quarter to one email per week from May 2017 to July 2017.
Stage 3. Strategies for achieving goals
Strategy talks about how you are going to achieve your goals. This is a general idea of achieving goals.
Using an online T-shirt store as an example, we will determine what questions need to be answered in the strategy block of your marketing plan.
Goal 1 is to increase brand awareness between April 2017 and July 2017, measured through Google analytics.
It is necessary to increase the brand presence in certain online channels that target the audience of football fans.
- What is the most cost-effective route to market?
- Are there our key customers in these channels?
- Where can we get more customer attention?
Study your competitors, understand what online marketing tools they do and don't use, and take advantage of first movers.
Goal 2 is to increase the number of existing customers served through an online account by 50% by July 2017.
Analyze your existing customer base and how they interact with your online store.
Goal 3 is to increase the frequency of emails from one email per quarter to one email per week from May 2017 to July 2017.
- How does the company currently interact with subscribers?
- Who are your competitors and how do they send out mailings?
The answers to questions like these will help you determine a strategy for achieving your goals.
Stage 4. Tactics for achieving goals
Tactics contain the specific tools you plan to use to achieve the goals of your marketing plan. When you write your strategy, you will describe each tactic in more detail, as well as specific KPIs for each tactic.
In the example of a T-shirt store, let's assume that we have chosen three tactics to implement these strategies: SEO, Contextual Advertising and E-mail Marketing.
Tactic 1 - SEO
When analyzing competitors, it was revealed that one of the key disadvantages of company X is its small marketing budget. However, website search engine optimization does provide the company with a field of competition.
To understand the positive impact SEO can have in increasing brand awareness among your target market, it is necessary to conduct keyword research.
Tactic 2 - Pay per click - contextual advertising
As with SEO, keyword research will give you an idea of how much budget you'll need for PPC advertising. Most of your competitors don't use a lot of keywords in their advertising, so this is where you can benefit. It also helps increase brand awareness.
Tactic 3 – Email Marketing
It is necessary to develop an email marketing strategy so that your existing customer base receives regular messages. The tactics that will be used will include options for what should be included in the content of the emails to ensure that you get enough clicks to the site and conversions to purchases.
This tactic will involve leveraging your existing customer base and encouraging them to recruit friends and colleagues to join your weekly newsletters.
Stage 5: Actions
The fifth stage of your marketing planning system focuses on how to put your plans into action. The action section covers what must be done in each of the tactics listed in the previous section of the SOSTAC plan to realize its goals.
To achieve the goals above, we have identified three tactics. Now we list examples of actions necessary to implement each tactic.
This is not an exhaustive list, but provides examples and a brief description of what to consider:
Actions for Tactic 1: SEO
- Keyword analysis. What keywords are we targeting?
- Page optimization. We must optimize site pages for key queries to ensure better ranking in Yandex and Google.
- Content - regular blog posts on the topic of the site.
- Creating a link mass. Create a target group of sites where you could post information about your project with a link to it.
Actions for tactic 2: Contextual advertising
- Keyword analysis. What queries can drive profitable traffic?
- Budget.
- Landing pages. What pages will people land on when they enter certain queries?
Actions for Tactic 3: Email Marketing
- Create email scripts for various actions on the site (subscription, purchase)
- Creating reports to analyze subscriber engagement in the newsletter
- Analysis of mailing profitability
Stage 6. Monitoring the results
The final stage of planning is to ensure that you can review and evaluate your performance in the future based on the goals set in stage two.
Consider which tactics to set that are tied to your goals and set up weekly or monthly reporting to ensure you're on track to achieve your goals.
Alexander Kaptsov
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Forming a stable array of buyers, finding one’s niche in the market, suppressing competitors, building a good reputation - this is not a complete list of issues that entrepreneurs have to solve. Without a clear marketing plan, it is almost impossible to achieve stable demand for products, brand recognition, and a large number of loyal customers. How to correctly draw up this important document for any business?
Company marketing plan – what is it?
A company's marketing plan should be understood as detailing all its actions that are aimed at achieving its optimal position in the market. It does not affect the production and technological aspects of the functioning of the company and only affects the issues of marketing products and making a profit.
What does developing a marketing plan give a company:
- Firstly , determines exactly what part of its funds will have to be spent on marketing activities.
- Secondly , formulate a policy for promoting specific types of goods and services on the market.
- Thirdly , draw up a strategy and tactics for working with the target market, including the procedure for setting prices.
- Fourth , certain goods, sales revenue and profit.
Important point: Since the marketing plan outlines in detail all marketing activities and expected results, it is possible to monitor the effectiveness of certain approaches in the company’s activities in the market.
Types of a company's marketing plan and the purposes of their preparation
There are many criteria for classifying marketing plans, including:
- Duration of validity – strategic (more than 3 years), tactical (up to 3 years), operational (up to 1 month).
- Breadth of coverage – plan for turnover, sales, advertising events, market research or integrated (comprehensive plan).
- Depth of development – detailed or general.
- Scope of activity – plan of goals, pricing policy, product policy, marketing communications, control and audit, finance, warehousing, order formation, supplies (logistics), etc.
A marketing plan is a very serious internal document, which is focused on achieving certain goals:
- Maintaining the company's position in the market.
- Development and implementation of a new product.
- Coverage of new niches and segments (diversification), etc.
Important point: Due to such a wide range of areas for using marketing plans, it seems necessary to draw up a separate document for each goal, since the methods and tools for each goal are different.
It should be remembered that a marketing plan is not an analogue of a business plan. It covers only issues of the company's activities in the market.
Structure and content of the company's marketing plan
A marketing plan is an internal document that is used for decision-making by company management. However, it has a fairly clear structure.
Its preparation may take several months, as it requires:
- Collecting information about buyers.
- Studying supply and demand in the market.
- Definitions of competitive advantages.
- Competitor assessments, etc.
Important point: A marketing plan should be not just a “collection of facts”, but a document containing analysis, recommendations, and alternatives for the company’s further work in the market.
All 3-4 months during which the marketing plan will be formed will be spent like this: 50% of the time will be spent collecting all the necessary information, 40% on analysis and evaluation, and only 10% on creating the document itself.
In order not to make mistakes in forming a marketing plan, it is advisable to focus on the structure below:
1. Summary . This section includes a description of the main points outlined in the marketing plan. The goal must be written down here and the ways to achieve it are listed. The expected results of the plan are also stated.
Important point: Paradoxically, the first section of a marketing plan is always written last because it is a summary of the entire marketing plan.
2. Market overview and forecast . This section describes the market (size, growth opportunities, trends, features) and shows the specific behavior of consumers and competing firms in it. Here it is important to indicate how many competitors there are in the selected segment, what share they cover, as well as what are the market growth opportunities.
3. SWOT analysis and competitive advantages . This part analyzes the strengths and weaknesses of the company, threats and opportunities for its functioning.
Based on the results of compiling a SWOT analysis, the marketer must determine:
- The main competitive advantage of the company.
- Positioning of the product in relation to consumers (preferably with a forecast for 3-5 years in advance).
- Tactical measures to take advantage of opportunities and reduce the impact of threats.
- A strategy to combat competitors and increase customer loyalty.
4. Purpose and objectives of the marketing plan . A marketing plan should contribute to business development, which is why it contains business goals within the selected planning horizon (one month, one year, three years) and marketing goals for the same period of time. Only after this the objectives of marketing activities are drawn up.
5. Marketing mix (marketing mix). The core of any marketing plan is the so-called marketing mix, which for goods is based on the 5P model, and for services - on the 7P model.
Model 5P. Any marketing event is built on the basis of five components:
- Product (Product) or product policy – logo and corporate identity, appearance and physical properties of the product, product range, product quality.
- Price (Price) or pricing policy - wholesale and retail prices, the procedure for determining the cost of goods, discounts and promotions, price discrimination.
- Place of sale (Place) or sales policy - sales of goods in markets, in stores, the basics of distribution, display of goods, inventory management and logistics.
- Promotion (Promotional) or promotion policy - promotion strategy, promotional events, PR activities, event marketing, communication channels, media strategy.
- People (People) – motivation and stimulation of staff, corporate culture, working with loyal customers and VIP clients, feedback.
Model 7P is complemented by two more “Ps”, namely:
- Process (Process) – conditions of interaction with the client, service procedure, creation of a favorable atmosphere, speed of service provision, etc.
- Physical environment (physical evidence) – setting, interior, background music, image, etc.
Thus, when developing a marketing plan, each of the above positions is worked out in detail, which allows us to form a comprehensive picture of the company’s functioning in the market.
6. Choice of company behavior in the market . This part of the marketing plan describes the company’s specific actions in the market to achieve its goal and solve identified problems.
7. Event budget . Includes a detailed list of costs for marketing activities, which can be presented in table form.
8. Risk assessment . This part describes the risks that a company may face while implementing its marketing plan.
The main stages of developing a marketing plan: an example of drawing up
It is obvious that a marketing plan is a complex and complex document, which is not easy to formulate. However, even a specialist with basic knowledge in the field of marketing can do this. Where should you start?
First of all, you should collect information about the market, the selected segment, competitors, consumers, and then implement the following sequence of actions:
- Stage 1 . Analysis of market trends. Identifying customer requirements for product quality, price, packaging design, and communication channels.
- Stage 2 . Product analysis. Assessment of quality, price, packaging design, communication channels for an existing product.
- Stage 3 . Selecting the target market. Determining the category of consumers for whom the proposed product is most suitable.
- Stage 4 . Positioning and competitive advantages. Establishing the place of the company’s product in relation to competitors (average in quality, lower in price, etc.) and its advantageous aspects.
- Stage 5 . Creating a strategy. Formation of promotions and special offers for the target audience, procedures for promoting the brand to the market, etc.
- Stage 6 . Tactical action plan. Actions to achieve the ideal position of a product on the market.
It is advisable to give a simplified example of creating a marketing plan for a company selling freshly squeezed juices through five specialized points located in different parts of the city.
Stage 1. Analysis of market trends
- Buyers want to purchase juices that are squeezed out of fruits and vegetables in their presence and sold in containers that are convenient for drinking (paper cups and plastic bottles).
- Sales are carried out in recreational areas and near large offices.
- The price may be higher than the cost of draft carbonated drinks and coffee, but cheaper than fresh juices offered by cafes and restaurants in the city.
Stage 2. Product analysis
- The company produces fruit juices in plastic bottles and on tap.
- All five sales points are located in places with large crowds of people, including near recreation areas.
- The price of juices is similar to the cost of fresh juices in cafes and restaurants in the city.
Stage 3. Selecting a target market
- Taking into account the properties of the product and its price, the main target audience will be working representatives of the middle class who monitor their health.
Stage 4. Positioning and competitive advantages
- The company will offer customers a product of excellent quality and high value.
- Natural ingredients, ease of drinking, proximity to the consumer are the main competitive advantages of the company.
Stage 5. Creating a strategy
- Targeting an array of regular customers.
- Retaining the audience during the cold season.
Stage 6. Tactical action plan
- Formation of a cumulative points system for clients and a system of seasonal discounts.
- Offer for delivery of juices in plastic containers throughout the city.
- Expansion of the assortment through the sale of dietary cookies and bars.
The above template should be considered as a kind of basis for drawing up a marketing plan. In fact, having such information in hand, the marketer can only distribute it into the appropriate sections.
Problems with the effectiveness of applying an organization's marketing plan
Many marketers ask a completely logical question: why do marketing plans drawn up according to all the rules not work and do not bring the desired effect?
The fact is that often quite neat and meaningful documents include such shortcomings as:
- Using information from one source . When creating a marketing plan, you should use information from industry surveys, expert assessments, statistical bulletins, customer surveys, competitor reports, etc.
- Overgeneralization . The document should operate with data, and not endlessly “spout water” and write speculative assumptions unsupported by information.
- Lack of flexibility . Despite its detail, the marketing plan must be flexible so that any of its parameters can be adjusted as the market situation changes.
- Lack of connection with company strategy . If the company's overall strategy is to sell goods to middle-aged people, and marketing activities are aimed at teenagers and young people, the marketing plan will not bring the expected effect.
- Inconsistency . If the marketing plan first considers the means of carrying out promotional activities and only then analyzes the product and customers, then the set goals will not be achieved.
Important point: The finished marketing plan should be checked again for the presence of the above problems.
A properly drawn up marketing plan is half the success of a company in the market. With its help, you can form a clear, structured, consistent picture of the company’s occupation of a certain position in the industry and in a separate segment. It allows you to create a list of effective tactical marketing activities that will help achieve the company's goals.
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We offer a ready-made checklist with which you can create a ready-made marketing plan from scratch. The article details the structure and lists the main sections of the marketing plan. We will tell you in what order it is most convenient to draw up a marketing plan, which elements of a marketing plan are mandatory, and which components can sometimes be missed. We are confident that our checklist will be suitable for protecting the promotion strategy of any product, because it is an exhaustive list of important information on the basis of which key strategic decisions are made.
A marketing plan has a fairly clear and logically structured structure, and its development is not a one-day process. You will need a lot of time to collect detailed information about consumers, to study the characteristics and market conditions, to determine the competitive advantages of the product, and much more. Get ready to process and summarize many different facts and consider more than one alternative for business development. Don't be afraid to spend time analyzing different strategy options.
On average, drawing up a high-quality marketing plan can take (depending on the size of the business and the number of product groups in the company’s portfolio) from 1-3 months. And if you engage in marketing planning simultaneously with solving current issues, then allow at least 2-4 months for this process. 50% of this time will be spent collecting information, 40% on analysis and consideration of alternatives, and only 10% on drawing up the marketing plan itself.
The structure of a standard marketing plan includes 8 elements and is as follows:
What is "Executive Summary"
"Executive Summary" - a summary or summary of the key areas of the marketing plan. This section of the marketing plan attempts to outline the main conclusions, recommendations and goals of the company for the next few years. You fill out this section last, but when presenting your marketing plan, you start with this section.
The practice of laying out the key takeaways at the beginning of any presentation helps align management with the required presentation format, allows you to evaluate the underlying strategy and prepare questions without detailed examination of the facts. This section of the marketing plan often includes the content, duration of the presentation, presentation format, and preferred form of feedback.
Situational analysis and conclusions
The situational analysis section is designed to quickly get a complete picture of the market, its size, trends and features. Such an analysis helps explain the choice of certain actions in the marketing strategy of a product. The main components of a situational analysis are:
- Analysis of the company’s internal environment and resources, including assessment of the level of achievement of current goals and objectives
- Analysis of consumer behavior in the market, assessment of the reasons for purchasing and rejecting the company’s product
- Analysis of the company’s external factors, competitor behavior and key market trends
A more detailed example of a situational or business analysis of a company can be found in our article:
SWOT analysis and competitive advantages
Any situational analysis ends with a compilation, describing the company’s strengths and weaknesses, key opportunities and threats to sales and profit growth. Based on the results of the SWOT analysis, the following is formed:
- the main product of the company
- indicating the development vector of product positioning for 3-5 years
- tactical action plan for the use and development of capabilities
- tactical action plan to minimize identified threats
- main
Defining marketing goals and objectives
The first step of any marketing strategy: setting performance targets for the coming year. The marketing plan should contain 2 types of goals: business goals and marketing goals. Business goals relate to issues such as the position of the product in the market (share or place among competitors), level of sales, profits and profitability. Marketing goals consider issues such as attracting new customers, retaining current customers, increasing the frequency and duration of product use.
Protecting your marketing strategy
Marketing strategy presentation is a core section of an organization's marketing plan. At this stage of the presentation of the marketing plan, it is important to talk about the following elements of the marketing strategy:
Without this section, the marketing plan will not be complete and not a single manager will approve the developed programs for product development and its promotion to the market. The section begins with a presentation of the business model or P&L, which shows the projected sales growth from the programs, the required budget for the programs, net income, and return on sales. The subsequent stages of this section are comments and explanations on the P&L model:
- Budget structure divided into main cost items
- Review of the main sources of sales growth and correlating them with budget items
- Assumptions used to build the model in the areas of cost growth, inflation and price levels
The vast majority of Russian marketers were brought up on Kotler’s books. His contribution to the popularization of marketing is, of course, invaluable. But, perhaps, it is in this role that he will remain in history.
American authors Hibing and Cooper, known throughout the world for their books on marketing planning, focused much more on the practical side. Their main contribution was step-by-step marketing planning based on establishing quantitative relationship between sales volumes and marketing communications. It is no coincidence that thousands of students study from their books in all US business schools.
Another American author, Schultz, made a major contribution to the development integrated marketing communications (IMC),- a system based on the objectively proven scientific fact that the consumer integrates all information about the market for a particular product that comes to him from various sources. Therefore, the presence of several communication channels greatly increases the impact on the consumer. On the other hand, when information coming from one source is not supported by similar information from others, its effect is equally greatly reduced.
The combination of these two techniques, namely prudent transformation of IMC into real sales, is the key and most effective idea in modern marketing. Against the backdrop of “emotional-propaganda” books by foreign and domestic authors, this is by far the most rational and practically useful technique for businessmen and marketers.
Are there practically no examples in the open press and the Internet of how this works? Mostly there are general words and academic plans. Therefore, it will be especially useful for you to become familiar with our practice.
In the practice of Russian and many foreign companies, marketing and sales plans exist separately and have little connection with each other. You will find many similar plans online, which are more reminiscent of bureaucratic circulars, consisting of cumbersome paragraphs copied from textbooks and many unnecessary terms and definitions. The most important thing is not there - any plan must produce results. Therefore, we will not talk about a plan “for the sake of a plan” and not about a teaching case. We're talking about a marketing plan that can actually increase sales.
It should also be remembered that the marketing plan is a key part of the investment plan. Not production or financial, which many people focus on, but marketing! The marketing component is the weakest point of investment strategies and plans. A sales plan cannot be credible without a compelling marketing rationale. This must always be remembered.
In practice, it is indeed very difficult to connect sales and marketing plans with each other. It’s easier to make formal plans or “unsubscribes”, which serve as a “whip” for managers and do not help them in their work.
In reality, this is a rather cumbersome and labor-intensive design if presented in schematic or tabular form. In addition, it is very difficult to fit into a visual model of a marketing and sales plan numerous preliminary and intermediate studies and chains of inferences that affect the content and indicators. But one thing sets her apart:
At any moment in time, you understand why sales are growing or falling and what and what intensity of actions need to be taken to maintain, speed up or slow down (if you want) these sales by the desired amount.
We took the least voluminous marketing and sales plan for the Moscow representative office of a small manufacturer of electrical appliances from neighboring countries that recently entered the Russian market. Based on the results of the analysis of the market and product portfolio, it was planned to double the current sales volumes without taking into account online sales, which at that time had not yet made a significant contribution and were not so actively practiced. Although the products belong to a variety of goods that, despite the influence of the Internet, remain committed to traditional distribution channels. Therefore, the relevance of the project remains quite high.
By the time the project began, the customer had a small Moscow representative office in Russia of 5 people, sales of several hundred units of household appliances per month, and the only “urgent” question for him was in which publication to place an advertisement that would solve all the problems with sales?
We proposed a research stage, based on the results of which this marketing plan was drawn up and began to be implemented, which is presented in full schematically below:
Complete outline of your marketing and sales plan
It is important to clarify the following points:
1. Target markets
At the start of the project, the target markets that the company worked with were limited to the customer groups marked in orange. After market analysis and segmentation, other target customer groups were identified and marked in green. In the process of field research, their main characteristics were identified - price segments, decision-making systems and decision makers, basic needs and wishes, dynamics and trends in recent years.
Target markets
Source: Analytical Marketing Agency
2. Positioning
This is the weakest point of the vast majority of Russian companies. Because they underestimate the simple but painstaking procedure for developing this provision. In most cases, it is enough to approach this carefully to get quick and noticeable results. In this case, the product portfolio was analyzed and product positioning was developed, which was then adapted with minor variations to different target markets. This is an important point! Different target markets require specific positioning, even if at first glance it may not be fundamentally different.
In our case, we tested a new positioning in the form of a commercial offer for small samples of clients. Its results were assessed according to the system awareness - share of positive attitude - making a purchasing decision (concluding a contract).
3. Communication goals
The 4A model of consumer behavior, known in Western literature, stands for the sequence of communications with the consumer Awareness - Attitude - Action - Action Again (Awareness - Attitude - First/trial purchase - Repeat purchase). In Russian-language literature one can find similar analogues of AIDA/AIDAS from the field of advertising, but we prefer to measure the specific “Attitude” of the consumer rather than the abstract “Interest”. The main thing is that you must learn to give these qualitative characteristics a quantitative dimension in order to understand the most effective direction of your communications. If, for example, you reach 100% of the target group with communications, 25% have a positive attitude, 5% make a purchase, half of whom make a repeat purchase, then by distributing this data to a wider audience of consumers with similar characteristics, you can calculate the potential the effect of your communications. In order to get these numbers, you need local samples. And your permanent task as a marketer or business owner is to constantly try to reduce the ranges between these indicators. For example, instead of 100% - 25% - 5% - 2.5%, achieve 100% - 30% - 10% - 7% at the first stage. This is the meaning of the quantitative connection between marketing communications and sales in the general case. But this is just one of the rough (but visual!) options for interpreting this relationship and it has its drawbacks. Most often, you have to select more subtle practical tools for each specific case.
Positioning is just one of these, although it is the most powerful tool for achieving these results. We will talk about this in detail in special articles.
4. Identification of leading and secondary target markets.
The most promising target markets were identified as green color in the topic "Marketing Goals". “Specialized retail chains” were not previously considered by the customer due to the difficulty of getting into them. This problem was resolved by consultants during testing. We managed to reach an agreement with the large M-Video network to place products there in the ideal price segment, which turned out to be unfilled with competitive analogues, which attracted the attention of purchasing decision makers. Thanks to a reasoned proposal, it was possible to obtain their consent almost immediately.
By the way, during the first telephone conversation, the head of the purchasing department was offered to familiarize himself for free with the results of marketing research on the market for electric kettles in Russia and Moscow, in particular, which showed a gap in the price range of the retail chain. During the second phone call, the retail chain manager immediately agreed to a meeting that lasted no more than 10 minutes with the result indicated above. Model 4A in this case looked like 100% (awareness) - 15% (positive attitude) - 7.5% (trial purchase). The positive attitude was expressed in the fact that in addition to the main one, another small network of 13 covered, having familiarized itself with the offer and positioning of the products, was ready to carry out a trial purchase a little later.
Wholesale companies that previously refused to work with the company's products were able to evoke a loyal attitude with the new positioning of the products and encourage some of them to make trial purchases. According to the 4A 100% - 29% -14% model, this allowed us to double the base of wholesale buyers - from 7 to 15.
In fact, the consultants worked in the above examples as a sales department. Due to the small number of customers in the collected databases, instead of limited samples, these target markets were targeted in full. A high degree of efficiency was achieved through precise positioning, which was adjusted after each contact until the share of positive attitudes increased. If at the beginning of the work it did not exceed 10%, then at the end it reached 29%.
All contacts were transferred to sales managers to work out details and conclude contracts. And this is the main feature in our work, unlike classical consultants. We do not offer solutions that have not been tested with real markets and customers.
Yellow Target markets or customer groups recognized as secondary are highlighted in color in the “Marketing Goals” section.
Marketing Goals
Source: Analytical Marketing Agency
5. Secondary target markets are secondary in order to limit them in human and financial resources compared to priority ones.
You can’t embrace the immensity, or, as we prefer to put it, you can’t do a little of everything! Unfortunately, the reality is that no manager or entrepreneur ever follows this principle. More often than not, they do the exact opposite and consider it a good thing. Because of this, we have to constantly check the compliance of client decisions with this principle.
"Yellow" target customer groups were found to be of secondary importance in the testing. They exhibited certain difficulties, which were reflected in low proportions of positive attitude and potential sales relative to awareness. These were problems associated with identifying and reaching decision makers, conveying important information to them information about the company and products, with forecasting the level of average purchases and sales in general, price pressure (market traders working with cheap Chinese products), with the presence of seasonality in some purchases, with the difficulty of ranking marketing and communications tools, etc.
All this generally increased the costs of promotion in these target markets. Therefore, in accordance with the “golden rule” of business - "don't do a little of everything"- it was decided to limit activity in relation to them at this stage and the main task of communications was their primary awareness of the positioning of the company and products. The main means of communication was the mailing of a specially designed informative booklet. Therefore, forecasts of concluded contracts or potential sales in this case were approximate and were not of great interest, since they were not expected to make a significant contribution to sales.
While regarding the main " green"The forecasts of the target markets turned out to be quite reliable, and through them it was expected to receive more than 80-90% of all planned sales. Contacts with their representatives were made in full and specific agreements on supplies were reached.
6. Ranking of communications media based on the “Price - Effect” principle
Human psychology tends to trust and pay great attention to the most expensive things and means of achieving goals. Therefore, in our case, expensive and other paid types of advertising were considered inappropriate until the available and free marketing means were exhausted. The sales goal was doubling current sales volumes, and the marketing plan budget is estimated at 1010 US dollars at the prevailing exchange rate at that time. Tellingly, less than half of it actually achieved sales goals.
We specifically focus on the tiny amount of the marketing budget to highlight the fact that big money does not always solve the problem of achieving sales goals. There is always an opportunity to achieve a lot using the simplest and most cost-effective methods based on analytics and market research. In this case, the very fact of being represented in a large network makes huge advertising costs for promotion unnecessary and allows you to reach numerous secondary groups of clients. Selling to large customers automatically attracts small customers. Another thing is that serving large clients is a special art and requires constant focused efforts. For example, this is manifested in working with, the standards of which, as our practice has shown, are not capable of being met by a significant part of Russian manufacturers in the field of light industry or food production. And this despite the fact that only German retail is capable of surpassing all Russian sales of an individual company, not to mention the profit rate that is incomparable in comparison with the domestic market.
From the point of view of demonstrating an IMC, this project was not very successful due to the described artificial limitations. But the goal of the marketing plan is not to master the budget, but to obtain a result that is qualitatively different from the current one. Therefore, the set of selected instruments for target markets can be expanded in the future with greater efficiency than at the moment. In general, it can be noted that in a country where one federal channel easily replaces all possible IMCs, it is not so easy to show such examples.
Marketing communications goals, marketing tools and budget
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