Prev NEXT

How Marketing Plans Work

Goals and Objectives

Your goals and objectives are simply the hard facts describing where you want to be a year from now, or five years from now, or whatever your time frame may be.

Start with your sales goals. In this section, you should include goals that are:

Advertisement

  • concrete and measurable (in terms of dollars and units)
  • set at a level that is challenging but not impossible to reach
  • set on a specific timetable for measuring success
  • linked to projected profits (which should also be estimated in the marketing plan)

To do this, you have to accurately estimate the market and what you can expect to get from it for your piece of the pie. There are several methods for doing this. Go through each one and compare your results in order to come up with your sales goals.

  • The first method requires that you look at total industry sales over the past five years for your product category. From that information, estimate total industry sales for the next three years for your product category. From that number, figure your market share and extrapolate your annual sales estimates for those years.
  • The second method is more limited to your business itself. Basically, you go through the same procedure, but you use your own product's sales figures instead of the total product category for the market. You can further break this information down by the specific distribution channel from which the sale came.
  • The third method is important because it is based on the sales levels you need in order to meet your expenses and product costs and make a profit. After all, that is the ultimate goal, right? Estimate your overhead expenses for the year. From your expected Gross Margin percentage, subtract your expected profit percentage. This will give you an estimated expense percentage. Divide the estimated overhead expense dollars by the estimated expense percent to arrive at the magic number of sales dollars necessary to cover your expenses and make a profit.

If you have a new product or business, you'll need to use the industry information to estimate your sales. This analysis should include the average cost of goods, operating margins, overhead expenses, and profit levels for businesses that are similar to yours.

To come up with your final sales goals, you can either average the numbers you came up with using for the three methods we just covered, or you might see a need to weight one method's results more than another. Look at your market data and your opportunities and threats data to determine if the actual potential should be estimated to be higher or lower than your numbers are stating, and then work from there to arrive at your final sales goals.