Many people believe that during World War 2 General Eisenhower told his soldiers, “Plans are worthless, but planning is everything.” Actually, President Eisenhower made his famous quote during a speech in November, 1957.
Eisenhower’s quote is relevant to us marketers because planning is a key activity for Marketing. The Marketing Plan (MP) is a basic Marketing function. Marketers tend to focus on the end result – the presentation to senior executives, when in fact, President Eisenhower is right. It is the process that is most important. In order to help others implement a better MP process, I am writing two articles. This first is intended for the novice; it explains the basics. The second, which follows this article in several weeks, discusses more advanced concepts.
The MP is a critical component for commercializing any product. It describes the business objectives, the marketing strategies and the tactics for commercializing a product or service. There are two types of plans: 1) the commercial launch plan for a new product and 2) the annual marketing plan outlining the proposed marketing activities for the coming year. The MP:
- Forces the company to analyze the marketplace before committing valuable resources
- Identifies and aligns the company on the commercial activity required for success
- Gains agreement from senior management to allocate funding
- Provides commercial milestones for monitoring goal achievement
- Establishes commercial performance accountability
The first section of the MP outlines the financial objectives for the product: revenue, profit and profit margin. Financial objectives set targets for the sales team, driving commission plans and individual sales rep quotas.
While Finance may drive financial objectives, Marketing needs to collaborate in goal-setting. To develop an accurate figure, Marketing must use its understanding of the customer, the market and the company’s competitors. As an example, Marketing needs to incorporate the selling cycle into financial projections. If a typical sales cycle takes 6 months to complete, it is unrealistic to set sales objectives from most customers beforehand. Sales are only likely to occur from those customers that have been involved with the product prior to launch, such as clinical trial sites. Marketing needs to identify these and any early adopter customers that will purchase on an accelerated sales cycle.
Pricing, especially early after product release, may need to be reviewed by Marketing since many early purchasers may have been heavily involved in the design and clinical trial process and expect (or already have in place a contract outlining) lower pricing.
The marketing strategy section describes the marketing mix that will best drive product demand; it lays out “the big picture.” Providing a broad-brush look helps executives better understand the keys for launch without “getting stuck in the weeds,” thereby facilitating buy-in. Limit the marketing strategy section to two or three slides.
The marketing strategy should include: a) key programs needed, b) value proposition and positioning that will attract customers, c) customer targets, d) sales collateral examples, and e) advertising / promotional activity drafts.
The marketing tactics section comprises the bulk of the MP. It lays out the Marketing Department’s detailed programs to support the product. Usually, the first tactic to explain is the product positioning used in the marketing campaign. This starts by identifying the Value Proposition, defined as the value that your product brings to the customer. Then, explain the messaging that reflects the product positioning. While the final message and graphics may not be ready yet, provide story boards so that leadership can see the initial drafts of the customer message.
Next, explain the marketing programs selected; they can be many and varied. Choose those programs that are most impactful and deliver the best return. Common medical product marketing programs include: unbranded clinical education, digital customer engagement, tradeshow management including conference presentations and posters, press releases and media kits, sales collateral, advertising plans for both digital and print, product videos, product spec sheets, and product training guides.
Sales assistance programs need to be included in the MP, such as customer targeting principles, pricing guidelines, competitive positioning, and responses to likely competitor attacks.
Some programs deserve a detailed explanation here. For medical products, clinical users are an especially important focus since they can serve as product champions for the customer organization. Since these customer types are data-driven, providing clinical research articles is essential. Although received with skepticism by some clinicians, company-derived technical papers that explain the clinical problem and how the mechanism of action addresses the problem can be helpful.
Establishing scientific advisory boards and user groups are two valuable programs for product commercialization. The former provides clinical perspective, and the latter provides real-world experience that can help Marketing tailor messaging that compels purchase behavior. Both groups can serve as sounding boards for clinical, technical and marketing concepts that can help companies avoid missteps in the market.
Since recent research shows that today’s clinicians base 70% of their purchase preference on information obtained before visiting company websites, it is imperative to establish avenues for customers to gain product knowledge in other ways. Developing a product website is one way. Or, consider engaging customers through relevant chat lines. Many companies work with Internet “influencers” to review and comment on products.
Pricing must be presented in the MP. It should be a collaborative effort between Finance and Marketing; Finance brings the knowledge of manufacturing cost and investor expectations, while Marketing provides comparable clinical treatment cost, improved benefit value, competitive product pricing and payer perspectives. This Marketing data is essential; without it upcharges over conventional therapy will not be approved by payers.
Finally, a key component of the tactics section is the marketing expenditures budget. Approving managers want to see the entire cost for the campaigns that will support the product. Be sure to provide timing for expenses.
A company’s product is not launched in a vacuum; customers are influenced by competitive product messaging. Therefore, it is very important to summarize the competitive situation in the MP. Explain such things as the competitor’s sales organization, key customers, opinion leaders that support the customer, pricing, product positioning and message elements. Then explain how your plan addresses these elements to drive commercial success. What unique value proposition will be put forward? What unique benefits? What programs are specifically designed to combat the competition? How does the sales team address competitive responses?
Conditions change, so the MP cannot remain static. However, by implementing a planning process covering these concepts, the MP will be established on a firm foundation and increase the likelihood of success. Planning should continue throughout implementation of the MP.
The MP development process is a key to commercial success. Perhaps this is best summarized by President Eisenhower’s comments immediately following his famous quote. He went on to say “… the planning process demands the thorough exploration of options and contingences. The knowledge gained during this probing is crucial to the selection of appropriate actions as future events unfold”. There’s probably no better explanation of the promise and purpose of a company’s marketing plan.