Start-up Entrepreneurs' Blog

Creating a Startup Marketing Plan – Where To Begin?

April 8, 2010

What the difference between a marketing plan created for a large corporation and one developed for a startup?  A lot. Startups don’t function like their larger cousins. This is often a mistake of startups, instead of realizing they are different, they try to impose the processes of large corporations on themselves. It’s not as though big companies have a better track record of bringing new and successful products to market than small companies.

In a startup, the marketing is tightly coupled to product development. They should be intertwined from the very beginning. In a large corporation, marketing is a separate organization that resides in another building. Marketing follows product development n a serial fashion. A start-up has time constraints and operates on a shoestring budget. They can’t dedicate one person, full time to writing a plan. Don’t get me wrong, you need a plan, just not one that’s the equivalent of the US tax code.  A marketing plan that is appropriate for a large, established player in an industry is not one that is suitable for a startup company. Most large companies have a formalized marketing process culminating in several detailed marketing documents that can be hundreds of pages.  The detailed business plan for a startup is often only 25 to 30 pages. Startups need to keep it simple, short, and basic.

What are the elements of an initial marketing plan?  Most often one hears about the marketing strategy, marketing mix, pre-launch awareness programs, marketing launch, MRDs, the 7P’s, the 4P’s, and 4C’s.  For a startup, the basics of a marketing include a description of the product or service (including pricing), description of the customer, description of the competitors, pre-launch awareness program, and an action plan for entering the market including objectives, budgets, resources required, and progress tracking.

The initial marketing effort focuses on gaining a better understanding of the customer and their needs, planting the seeds to build customer relationships, and beginnings of a pre-launch awareness program.  It is not the go-to-market plan. It is a search plan. Marketing is seeking the right product and the right set of customers.  Initially, marketing takes place during the development process, a startup investigates who could be the target customers and which potential market segments could the product be applied to. A startup may speak with customers in a market segment that may not be pursued at all.  On the other hand, the startup may speak with customers and dramatically modify the planned product.  At the end of the search, a startup should be able to answer 1) what is our customer’s problem, 2) does our product and feature set solve the problem, 3) can the solution be provided at a price the customer is willing to pay, 4) can we provide the product in a timely manner, and 5) will the customer think our product is a must-have solution.

Knowing you customer is more than determining what they need in terms of the product; it also means knowing how they conduct their business and how your product or service can add value to their business model. It also includes knowing your customers’ habits and media preferences. This will help guide you to know your customers as an audience before embarking into any program – what radio stations they listen to, what websites they visit regularly, what magazines they read, which analysts they respect, which trade shows they attend, what sports they like and so on. Knowing one’s customer also means understanding that all customers are not equal. There are the early adopters, the practical mainstreamers, and the skeptical change –resistant late adopters. This level of understanding will help you find the communication channels relevant to your customer for your action plan and pre-launch awareness programs.

People buy what’s most familiar to them. Even if your competitor has a superior product, customers still have a tendency to buy from those they know. It is never too early to start the pre-launch awareness. One purpose of pre-launch marketing is to support the sales effort later. It’s important to answer these questions and to build a compelling story line:  why would a customer buy the product, why wouldn’t a customer simple continue doing what they do today (a start-ups biggest competitor is often “business as usual”), why would a customer buy from your startup instead of one of your competitors, and what would compel your customer to buy now and not wait. Sometime the answers are not obvious. It’s easy to see how a customer value proposition fits with why a customer would buy a product; it’s cheaper or more effective. But some products just don’t have an empirical value proposition. What’s the value proposition for a music download, how do you place a value of pleasure of listening to a song?

Once a startup knows who the customer is and how the customer behaves, then it becomes easier to discover who the competitors are and what are their strengths and weaknesses.  In a startup, this process is iterative. Customers’ needs change as they respond to changes in their business and market. Competitors change too. What one believes about the competition today may not be true when our product is ready to launch. As a result, the product the startup is developing may need to respond to these changes with the customers and competitors. It is a never ending cycle.

Filed under: Marketing & Sales,Product Development

Tags: customer development, customer discovery, marketing plan, Product Development, start up