You can’t have a product discussion and not include financial for the number geeks in all of us. We will dive into our “Marketing Plan Financials in Plan English” toward the end of the series but many will need to connect some financial dots in the situational analysis at a high level leaving the detailed stuff (budgeting, break even analysis and cash flow analysis) for the “back of the book”. This section should be about 2-4 pages in length and kids, keep it pretty for the rest of us. Now while you will need to write some short paragraphs to explain your information, tables and graphs are your friend here.
The Financial Analysis section is separated into two general areas – sales and profitability
Part 1 – Sales Anaylsis
In this section you need to focus on the current sales that your industry and you business are doing across segments, product categories and various distribution channels. Let’s break it down like this:
Overall Industry and Market Share
- Sales for the Entire Market
- Sales for Your Company
- Sales for Your Competitors
Sales By Segments and/or Product Categories
- Sales by segments and/or product categories
- Sales by company product(s)
- Sales at this level compared to competiton
Sales By Distribution Channel
- Sales for each channel
- Sales for company product(s) by channel
- Sales for Your Competitors by channel
Sales By Geography
- Sales for Each Region
- Sales for company product(s) by region
- Sales for Your Competitors by region
Part 2 – Profitability Analysis
Since we focused on sales which is really revenues, we need to splice this up and see what is actually profitable. Just because you can make money from it does not mean you make a profit. You will need to look across the revenues and include the marketing related expenses. Let’s break it down like this:
Revenue Breakdown
- Use the sales numbers from above but identify realized revenues not just projections
Marketing Expense Breakdown
- Direct Marketing Expenses – These are the expenses that are tied to the product(s) and must be identified in that way
- Indirect or Proportional Marketing Expenses – These are the general administrative and broad marketing expenses that may be assigned to a product based on some criteria like percentage of sales or a pre-determined distribution amount.
Again, stay high level
Since this part of the situational analysis, you are using this sub-section to make your point and support your overall analysis. More detailed financial stuff comes later and in our final posts in the marketing plan we will do it in plain English.
Table of contents for Marketing Plan Series
- The Art of Marketing – Part 1 of the 2009 Marketing Plan Series
- Three Marketing Plan Types – Part 2 of the 2009 Marketing Plan Series
- Framing a Successful Marketing Plan – Part 3 of the 2009 Marketing Plan Series
- Killer Marketing Plan Summaries – Part 4 of the 2009 Marketing Plan Series
- Understanding Your Market – Part 5 of the 2009 Marketing Plan Series
- Understanding and Beating the Competition – Part 6 of the 2009 Marketing Plan Series
- The Impact of Technology, Economy and Socio-Politics – Part 7 of the 2009 Marketing Plan Series
- How Do You Make Financials Sing? – Part 8 of the 2009 Marketing Plan Series
- Doing the SWOT Analysis Dance – Part 9 of the 2009 Marketing Plan Series
- Mapping Out Your Marketing Objectives – Part 10 of the 2009 Marketing Plan Series
- Setting Your Marketing Strategy – Part 11 of the 2009 Marketing Plan Series
- Action Plans – Part 12 of the 2009 Marketing Plan Series
- Marketing Plan Financials in Plan English – Sales Projections – Part 13 of the 2009 Marketing Plan Series
- Marketing Plan Financials in Plan English – Breakeven Analysis – Part 14 of the 2009 Marketing Plan Series
- Marketing Plan Financials in Plan English – Sales Cash Flow – Part 15 of the 2009 Marketing Plan Series
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