Whether a start-up, or an established producer looking to expand, developing a realistic and well thought-out marketing plan and budget is crucial to success.
Rule #1: Remember, you are in the business of selling, more than you are in the business of producing.
Many a passionate producer has failed in thinking that the exceptional quality of their product alone would trump a well thought-out marketing strategy. In fact, your ability to influence consumer trial and cultivate brand loyalty are in large part dependent on how your product is positioned, priced, and perceived in the marketplace (see my blog post: The 80/20 Rule for Alcohol Beverage Branding which speaks to how much packaging alone drives sales). Developed properly, your marketing plan will be the roadmap you follow to win customers and dramatically improve the success of your organization. Below are the 7 essential components every marketing plan should have in order to achieve success.
The 7 Essential Components of Your Marketing Plan:
- Situation Analysis (SWOT) – A SWOT analysis is an evaluation of your internal Strengths and Weaknesses and external Opportunities and Threats. Take a 30,000-foot view snapshot of your organization, products, and the competitive landscape to see how you stack up. Event though the truth sometimes hurts, be honest with yourself and organization.
2. Unique Selling Proposition/Brand Essence This should be the most elemental part of your brand that is a one to two sentence encapsulation of the underlying values, guiding principles, and hidden attributes that distinguishes your company or brand from the competition. This message should be carried through all of your marketing materials and should be an integral component of your go-to-market strategy.
3. Target Consumers Describe the customers you are targeting including their demographics, psychographics and their wants and needs in relation to your beverage. Consider other products they are buying within the alcohol beverage space as well as their broader lifestyle and consumption trends.
4. Your Pricing and Positioning Strategy Develop a clear vision of your product offerings, tiers of products if applicable and their respective pricing in relation to their position in the market.
For instance if you’re building a luxury brand, it is critical that your pricing strategy supports the luxury position – price your brand too low, and your consumers may have concerns about quality. For the same reason, it is also critical to make sure that your packaging, marketing collateral, website and all touch points for the brand support both your price and your positioning. If your package looks cheap, but your positing and price are luxury, it will dissuade consumers from trusting your product enough to trial.
5. Marketing Strategy & Materials (Traditional and Online)
– Marketing Strategy: Your strategy for tackling the market opportunities you identified in the situation analysis along with specific revenue goals.
– Marketing Materials: The collateral you will use to promote your business and product, support your strategy and attract your target consumers. Choosing the correct marketing materials, media and mediums such as sales sheets, tasting cards, hangtags and your website will be key to your success.
– Online Marketing: Now more than ever, consumers are going online to learn about, review, and purchase alcoholic beverages. Your online presence must accurately exude your brand personality and should never be an after-thought. Your online strategy should leverage SEO optimization, digital advertising in blogs, chat rooms and other relevant sites, as well as social media. Consumers want to know the people and stories behind the products they buy. Leverage social media to give them a “peak behind the curtain” but be careful not to market to aggressively. Engagement is key.
6. Distribution Plan How you sell your product is extremely unique in the alcohol beverage category because of its highly regulated nature by local municipalities, state and federal governments. Gain a clear understanding of your specific legal constraints and then craft a successful distribution plan along with how you are going to support your distributor. If your local/state laws allow, consider a direct to consumer strategy with a retail/tasting room location or an ecommerce website.
7. Budget Now that you have established a plan you’ll need to rough out a budget to support the plan. It’s important that you develop a realistic budget for both your needs and financial resources – but how much should you realistically set aside?
There are many resources (including this article from Forbes) that outline marketing budgets, but the consensus seems to be that start-ups should consider a range of 12 to 20 percent of gross revenue or projected gross revenue while established companies should allocate between 6 to 12 percent.
However, unlike other industries, the alcohol beverage industry must in many cases rely on the 3-tier distribution system due to current laws and regulations. Be sure to adjust your % of gross allocated for your marketing higher to account for the additional distribution expense.
The 3 Areas of Marketing to Budget for:
- Brand Creation
- Brand Essence/Brand Story Development
- Logo Design
- Structure Design (If you desire a custom bottle or structure)
- Package Design including labels, closure, etc.
- Brand Support/Sales Materials
- Sales Sheets
- Hang Tags and Point of Sale
- Business Cards and Stationery System
- Brand Proliferation
- Advertising (Traditional & Online)
- Email Blasts/News Letters
- Social media
- Direct mail such as postcards or letters
With a proper marketing plan and budget, you will greatly reduce your exposure unexpected expenses and enhance your ability to plan and execute for long-term success.
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