The Water Factory
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The Water Factory's marketing strategy is based on leveraging personal contacts. Of these contacts, some will become customers, while others will be interested in joining the organization as a lower level of the network marketing structure. With this in mind, Aych will increase his participation in the many different community organizations. The more active he is in the different organizations, the more people he is exposed to who could become customers or sales people.
The key to this marketing strategy is being an extrovert. Having the behavioral characteristic of an extrovert is necessary to be sufficiently assertive for developing sales.
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The Water Factory's mission is to provide customers with the finest quality water filtration units. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.
As a network marketing business, The Water Factory has an unusual market segment that it is targeting. With network marketing, sales and recruitment are done through personal contacts. This means that initially one would attempt to sell the product to people they know. Once these people are users, you would try to convert them from users to sales people for the products. This is also called multi-level marketing where a company sells products to consumers (typically personal contacts) via direct selling methods, and recruiting new people to help sell, and provides commissions for the managers of new recruits.
The Water Factory will call the market segment that will be targeted "personal contacts." Personal contacts typically take the form of the following groups (not an exhaustive list): past classmates, current and past neighbors, landlords, tenants, repair people, grocers, club members, sport partners, children's teachers, children's playmate parents, spouse contacts and fellow congregation members.
The Water Factory is focusing on this portion of the market because a trust relationship has already been developed between the personal contacts. Due to the nature of this business where you are selling directly to the consumer, it helps considerably to have a connection with the perspective customer. With a relationship already established, it is easier to sell the product because the prospective customers skepticism has been lowered. This then creates an opportunity when The Water Factory can explain the cost advantages of home water filters relative to bottled water.
Additionally, the other reason this market is targeted is because once the prospect is a customer, it is then easier to convert them into a sales agent for The Water Factory. The advantage of having sales representatives is the extra income stream of sales commissions. The advantage to the customer becoming a sales representative is a lower cost for their own product and a revenue stream from the sales of filters to their friends. If their friends then become sales agents, the customer then gets a second level of revenue. Lastly, for every new recruit that Aych's recruits bring in, Aych gets a commission. So Aych would get a commission for his sales, a commission for the sales of his recruits, and if they recruit someone, Aych will get a commission off of them as well.
The Water Factory will position itself as a cost effective, customer centric organization servicing the market need for purified water. The Water Factory will leverage its competitive edge to achieve the desired positioning.
The Water Factory's competitive advantage is the ability to generate revenue streams for sellers of the products. This is the virtue of the network marketing system. With NM, if the buyer becomes a seller, they can receive their products at wholesale pricing and receive a commission for products that they sell. Additionally, if they recruit people to help them sell, they get a commission for every sale that their recruits make. At the same time Aych gets a commission of his recruits as well as his recruit's recruits. This is a relatively easy way to create a recurring revenue stream. This is The Water Factory's competitive advantage and will help them gain market share.
The single objective is to position The Water Factory as the premier resource for home water filtration needs. The marketing strategy will be to generate sales to customers as well as the transition of some of the customers into sales associates.
The marketing strategy will be accomplished through personal networking. As indicated before, sales are made to people that have some sort of relationship with Aych. The networking activities will be generated primarily from the many different community organizations that Aych belongs to. These include: The Rotary, Kiwanis, Church groups, and others. Aych will be an active member in these organizations and by leveraging his outgoing personality style, Aych will have a perfect lead in to request a time in which they could sit down and chat about the business proposition.
The Water Factory's marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service.
As part of Aych's senior thesis for the completion of his MBA, he studied the effectiveness of network marketing organizations. His research explored the financial models that NM employs as well as customer's preferences and perceptions regarding NM.
Since the success of NM businesses are so dependant on the customers, research regarding the customers was very important. His thesis provided him with valuable insight as to why NM would be successful and what concerns people have that make them cautious about purchasing from a NM organization.
Aych discovered that although some customers have the erroneous perception that NM is related to pyramid schemes, this perception is changing with the mainstream acceptance of Amway and other successful NM companies. Additionally, many customers were drawn to the NM business model because of the sense of more personalized attention. With this in mind, Aych will be emphasizing this aspect of his business.
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