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This sample marketing plan can be edited directly in Sales and Marketing Pro software.

Critical numbers for the business will be tracked through the following systems:

Google Analytics: Will track web visitors and their source (in order to look at referrals from complementary businesses)

Facebook analytics: Will track Facebook page visitors and their sources.

Walk-ins: Will be tracked manually by clerks, including separate categories for those who make no purchases and those who do. These numbers will be entered into a customer log each shift.

Check-out POS system: Will track sales transactions and allow for entry of the numbers from the above systems to have one location with all marketing and sales data. Special fields for referrals, testimonials, and PR mentions will be added to this customizable software, so that these items can be mentioned manually.

QuickBooks: Will track cumulative revenue and expenses

12.1 Sales Forecast

Products are divided into four categories:

  • Handcrafted apparel - Relatively high-priced, handmade and individually crafted specialty items
  • Women's items - Items from local companies for women
  • Men's items - Items from local companies for men
  • Small gift items - Items under $25 which are appropriate for gifts or impulse buys

The business is expected to grow sales 15% in year 2 and 3 due to a continued focus on advertising and the viral effect of the Local Threads "Well Dressed" membership program.

Direct costs are the prices Local Threads pays to its clothing suppliers which are expected to average 60% of the sale price (roughly a 67% markup).

We expect sales to drop off significantly in the summer months, when the regular college population is on break, and to rebound once the academic year starts up again in fall.

Sales Forecast

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Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Handcrafted Apparel 279 470 540
Women's Items 545 939 1,080
Men's Items 409 705 810
Small Gift Items 938 1,644 1,890
Total Unit Sales 2,170 3,757 4,321
Unit Prices Year 1 Year 2 Year 3
Handcrafted Apparel $150.00 $150.00 $150.00
Women's Items $75.00 $75.00 $75.00
Men's Items $50.00 $50.00 $50.00
Small Gift Items $20.00 $20.00 $20.00
Sales
Handcrafted Apparel $41,813 $70,451 $81,018
Women's Items $40,867 $70,451 $81,018
Men's Items $20,433 $35,225 $40,509
Small Gift Items $18,756 $32,877 $37,809
Total Sales $121,869 $209,004 $240,354
Direct Unit Costs Year 1 Year 2 Year 3
Handcrafted Apparel $90.00 $90.00 $90.00
Women's Items $45.00 $45.00 $45.00
Men's Items $30.00 $30.00 $30.00
Small Gift Items $12.00 $12.00 $12.00
Direct Cost of Sales
Handcrafted Apparel $25,088 $42,270 $48,611
Women's Items $24,520 $42,270 $48,611
Men's Items $12,260 $21,135 $24,306
Small Gift Items $11,254 $19,726 $22,685
Subtotal Direct Cost of Sales $73,121 $125,402 $144,213

12.2 Marketing Expense Budget

Most expenses will remain steady and rise with inflation. The expense which will grow faster is the membership discounts offered. This expense is shown on the books to demonstrate the amount clothing will be marked down. As the membership program grows towards its goal of 500 members, these discounts are expected to rise in tandem with unit sales.

Expenses will focus on college radio, which reaches both college students and locals. Other inexpensive areas include the email newsletter, which is just the cost of Constant Contact for email blasts. We expect some expenses, such as college sponsorships and membership discounts, to decrease or stop entirely during the summer months, when our regular college student customers are out of town.

Marketing Expense Budget

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Marketing Expense Budget
Year 1 Year 2 Year 3
Radio Advertising $6,000 $6,300 $6,615
Newspaper Advertising $2,400 $2,520 $2,646
Flyer Advertising $1,200 $1,260 $1,323
Online Advertising $2,400 $2,520 $2,646
College Sponsorships $900 $945 $992
Membership Discounts $1,399 $2,365 $2,720
Email Newsletter $1,200 $1,260 $1,323
Other $6,000 $3,000 $3,000
------------ ------------ ------------
Total Sales and Marketing Expenses $21,499 $20,170 $21,265
Percent of Sales 17.64% 9.65% 8.85%

12.3 Key Marketing Metrics

Certain key marketing metrics require additional explanation:

Leads: Includes all new walk-ins, Web visitors, and Facebook page visitors. We will attempt to estimate and eliminate the overlap between these groups.

Leads Converted: This conversion rate is expected to drop as the website increases its visibility significantly over the first three years. Many Web visitors will not become customers either because of geographic distance or because they are less qualified than before. However, the overall effect on leads will be positive because of lead growth.

Average Transactions Per Customer: Each month, a new customer is expected to make .25 purchases, or 1 every 4 months (3 per year).

The remaining metrics are all expected to rise over the first three years as an effect of increasing sales and the viral effect of marketing efforts.

Key Marketing Metrics

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Key Marketing Metrics
Year 1 Year 2 Year 3
Revenue $121,869 $209,004 $240,354
Leads 42,769 78,746 90,558
Leads Converted 20.00% 15.00% 10.00%
Avg. Transactions/Customer 0.25 0.25 0.25
Avg. $/Customer $56 $60 $65
Referrals 570 1,035 1,190
PR Mentions 8 10 15
Testimonials 17 20 25
New loyalty program members 237 250 300

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