Wednesday, August 26, 2009

The 80:20 rule (or the Pareto Principle)

You might have come across the 80:20 rule or policy (also known as the Pareto Principle) before, but do you really understand what it is all about? Basically it states that 80% of the effects come from 20% of the causes.
It emerged when an Italian economist Vilfredo Pareto verified that 80% of his country’s wealth was owned by 20% of the population. A few years later, the business management thinker Joseph Juran realised this principle could be applied to a broad set of work from the science of management to the every-day life.
  • Project managers know that 20% of their work consumes 80% of their time and resources;
  • Business managers know that 80% of their sales will come from 20% of their clients;
  • Advertisers know that 80% of the enquiries will be generated by 20% of the advertising mediums;
  • You know that 20% of your weekly activities represent 80% of your happiness;
  • You spend 80% of your salary on 20% of things (such as rent, utility bills and transportation);
There are numerous situations where this rule can be applied, and even though it might not always be true, it is likely that it will still be a minority of actions that produce the majority of results. The way how the Pareto principle can be beneficial to a marketer is that it reminds you to focus on the 20% of activities that really matter and that will make the difference as they will produce 80% of your results. So if you will not have time to do everything you had planned to do, make sure you do not put aside any of the important 20% work that really matters. Work smart, not hard!

How can the 80:20 rule apply to a marketing plan?

It is crucial for a marketing plan to achieve the maximum impact; therefore it must be clear, concise and simple. It needs to concentrate on the 20% really relevant research and information to obtain 80% of its efficiency and consequently 80% of the business profits.

Thursday, August 20, 2009

What is the difference between a marketing plan and a business plan?

Very often people can get confused with the two, but the fact is that the marketing plan (focused on the marketing strategy) will usually integrate a business plan (focused on the overall business strategy).
Your business plan is a decision-making tool that will cover a detailed insight into your industry, define your business structure, the product or service offered, your business goals, the people involved and the financials associated to achieve the referred goals.
Within the business plan there should always be included a marketing plan which will in turn, focus on the marketing strategy for the business.
A business plan will not be complete without a marketing plan; however, a marketing plan can be presented on its own. To understand more clearly what is included in each type of plan, please view each plan’s general structure below:

Business Plan Structure

Marketing Plan Structure

1. Executive summary

1. Executive Summary

2. Company description

2. Situation Analysis

3. Market analysis

3. Marketing Strategy

4. Marketing plan

4. Marketing budget and forecasts

5. Operations plan

5. Control and evaluation

6. Management team

6. Timeline

7. Financial plan

7. Attachments

8. Timeline

9. Attachments