Alabama A&M University
S M A L L FA R M S R E S E A R C H C E N T E R
FA C T S H E E T
COLLEGE OF
AGRICULTURAL, LIFE
AND NATURAL SCIENCES
United States Department of Agriculture
Office of Advocacy and Outreach (OAO)
Marketing and Market Planning
"Houses
are built on solid foundations and so are successful businesses." In order to succeed in
today's competitive environment, many entrepreneurs wisely develop a business plan to assist
them in gaining support for their project, to provide focus and direction to their efforts and to
ensure that no critical factors have been left out of their thought processes. An integral part of
any business plan, in addition to considerations of physical, financial and human resources
required, is the marketing or market plan and that is the focus of this document.
Marketing itself is the combination of all of the steps and activities that lead to the final sale of
your product to the end user. Traditionally, these activities are divided into four main subject
areas: product, promotion, price and place. There are a variety of other activities that also take
place that will provide a framework for decision making in these areas.
The Marketing Plan is a document designed for action. It contains important facts, analysis,
and conclusions about a product's markets and competitors, measurable market objectives
and action plans the company will use to use to achieve their objectives. It is not a document to
be completed and placed on a shelf, but a dynamic planning guide which should be reviewed
and refined on a regular basis. The scope and detail of a marketing plan will vary depending on
the size of the initiative, the type of industry involved and the complexities of that market segment. A typical marketing plan covers the following topics:
Mission statement briefly describes the business you are in, the products and services you
provide, your geographic territory, and the customer needs you fulfill. It should also reflect the
company's business philosophy and desired image in the marketplace. A first draft mission
statement should be developed at the start of the market planning process but you can be
certain that it will be revised as the process is carried out.
Personal objectives (are not usually included in the marketing plan but they should be
considered nevertheless). One aspect that is often overlooked in the development of a business
plan or marketing plan is the impact of the business on the individual entrepreneur. The
demands on personal and family time that are often created by the launching of a new product
or enterprise can be substantial. Be sure that you have considered these demands as carefully as
you consider all of the other aspects of your project.
Objectives are specific goals and time frames for achieving them. They should be clearly
defined, realistic and measurable. It has been said, "if you don't know where you are trying to
go, how will you know when you get there?" Your objectives should cover 1, 3 and 5-year time
frames and should be updated at regular intervals. These, too, should be reviewed at the end of
the market planning process and revised as necessary.
Small Farms Research
Center
Alabama A&M University
4900 Meridian Street
James I. Dawson Building
RM #219
P.O. Box 700
Normal, AL 35762
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Competitive analysis presents facts and data about your target market, the specific segments for
your products, competitors, distribution channels and other micro and macro-environmental
issues. This analysis could also include a review of internal strengths and weaknesses and
external opportunities and threats.
Competitive strategies – the overall approach for achieving the market objectives. Each
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product should seek to have a distinctive competitive advantage that can be optimized to improve performance.
Typical strategies include (1) Cost leadership – being the low cost producer through innovative technologies,
economies of scale or low cost raw materials, for example. (2) Product differentiation – having a product that is
unique, identifiably different, having superior qualities and/or other consumer advantages. (3) Niche markets –
identifying specialty markets where the product meets the needs of a small group of specialty customers who are
willing to pay a premium to have their needs met in a superior fashion. These strategies are not mutually exclusive. You can use any combination of strategies that will help you reach your objectives.
Strategic action plan is a detailed listing of what will be done, when it will be done, the budgeted cost for each task
and the person or persons responsible for each task. Actions can be generally categorized under product, promotion,
price and place (outlets and distribution channels). The blend of the decisions taken in these areas is known as the
marketing mix.
Pro forma financial statements are a financial extrapolation of the market objectives and action plan budgets. It is
often advisable to get professional assistance with the development of your financial projections.
Controls are a description of how management will monitor the results of the plan both during and after
implementation. What information do I need, who will provide it and how do I measure it? A marketing plan is a
document that presents a context for action. The context is the market analysis, objectives, and strategy. The
actions are the implementation decisions and the measurement of results as the plan is implemented.
Market Research and Analysis
Marketing decisions are made based on a combination of entrepreneurial instinct, experience and market
research and analysis. Generally, however, too few decisions are made with proper consideration of relevant
market research. Market research can be fundamental to gaining and maintaining market share. Market research
serves two important purposes. (1) To provide information used in understanding, defining and analyzing
markets. The primary purpose of this is to make educated decisions about the product, price, promotion and
place; and (2) to provide information for monitoring your planning assumptions and market results during the
implementation of the marketing plan.
Market research is an investment in the development of a solid foundation for your business. It will help you
make better marketing mix decisions. Successful products build sales, profits, competitive advantage, and rapport
with the trade. Investing some time and money towards making better-informed marketing decisions will lower
your direct and indirect costs of doing business
Market research is particularly important when your products are competing against established competitors who
are selling to satisfied customers, something that is commonly the case in the food industry. In this situation, it is
vital to have a very clear understanding of your competitors strengths and weaknesses, as well as understanding
subtle but important ways to better serve these customers. Further, in intensely competitive markets, circumstances
may change rapidly. Strong market understanding will help you solve problems more rapidly and accurately. It
should allow you to take a pro-active position and move forward on a timely basis rather than being reactive and
making changes in response to events that have already occurred.
Author:Duncan M. Chembezi, Ph.D. Professor and Director, Small Farms Research Center , Alabama A&M
University
Cooperating Units: USDA Office of Advocacy and Outreach (OAO), USDA/NIFA/ Beginning Farmers and Ranchers
Development Program (BFRDP), USDA/OAO/Outreach Assistance for Socially Disadvantaged Farmers and
Ranchers (OASDFR) Program, Alabama Cooperative Extension Systems, and Alabama A&M University.
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