Developing a market plan

Developing a market plan

In my contacts with publishers of small magazines, I've been asked some worrisome questions that expose real gaps in fundamental knowledge about our business. I hope that in this and subsequent columns I can help publishers of smaller magazines span these gaps and thus enable them to avoid some potentially costly mistakes. This particular column will explain how to develop a market plan.

To succeed, the first thing the publisher of any magazine--large or small--must do is develop a solid market plan. To be effective, this plan must address three fundamental questions about the publishing operation:

Where are we now?

Where do we want to go?

How do we get there?

When I think back on my 30 years with Ziff-Davis, I realize that these questions were the starting point for any kind of analysis we ever did. As cerebral as Bill Ziff always was, he invariably started any serious discussion of market planning by asking these simple questions in one from or another. I believe that not looking at a business in this disciplined way can cost more money, cause more publications to fail and keep more publications from achieving their potential than anything else.

Publishers of smaller magazines may be saying to themselves that this kind of planning is fine for the Ziffs of the world, but we small guys don't have the resources for it. To which I say, big publishers wouldn't be big if they hadn't done the right planning when they were small. Although caught in the grind of dealing with each day's crisis, small publishers still need to force themselves to engage in forward, strategic planning in a disciplined, intelligent manner.

Furthermore, the first market plan you do needn't be on the order of a Ziff-Davis plan. Do it in a simple fashion, and you're on your way. What is important is to refer back to the plan throughout the year to see how you're performing relative to it. The shaping and reshaping of the plan makes it a living, dynamic document. (I want, by the way, to distinguish this plan from a budget. A market plan is not just a series of numbers. The questions it raises are not whether you're on budget, but whether the assumptions you made about your magazine and market are correct.)

Work as a team

Formulating the plan should be a group effort. The president or publisher can start the process, but should be joined by the circulation director, ad director and editor. Everyone should work together; one person makes a decision somewhere down the line.

In a sense, a market plan is tied to all the elements of the business-- editorial, circulation, advertising and production. But, for our purposes, the plan will focus on how you're going to generated ad revenue and create the best possible ad marketing effort.

The answer to the first question in your market plan--Where are we now? --is crucial because it allows the next two questions to be addressed more easily, and enables programs that deal with them to be put in place with less difficulty. Answering that first question requires an understanding of the editorial positioning of your magazine and the marketplace in which it operates.

Editorial position is fundamental

Your magazine's editorial position is a fundamental and critical part of what you are doing, and the rest of the market plan must be based on that position. A gigantic problem develops when a magazine has ad sales objectives that are not consistent with the editorial product. Ad sales then is tempted to position the magazine according to what it would like to be selling, rather than according to what it actually has to sell. Circulation, too, in its effort to achieve cost efficiency, may be developing an audience that is not consistent with the audience the magazine is supposed to be delivering as defined by its editorial identity. In short, every market plan must clearly define the magazine's editorial mission to ensure that editorial, advertising and circulation are in sync--all must be selling the same magazine.

A magazine's editorial position is, of course, closely related to an understanding of the marketplace the magazine is serving. In fact, the analysis of the market that is done prior to the acquisition of a magazine is really the same analysis that should be done every year of a magazine's existence.

In doing this analysis, you have to look at the market's most recent and prospective changes. This includes, for example, shifts in consumer preferences and purchasing behavior; what's happening to distribution and pricing patterns; whether new technology is threatening or enhancing the market; which segments are growing or are flat or in decline. You also have to analyze how your magazine in positioned in relation to the market as you see it. Your magazine's editorial identity has to be examined yearly in light of potential changes in the marketplace.

In addition to looking at the market, you have to size up your magazine's market share in comparison to your competitors' and assess their strengths and weaknesses. In line with this, you should try to define your magazine's franchise within the market so that you can show what distinguishes it from your competitors' magazines. Editorial quality alone may not be enough to separate it from the pack in the eyes of advertisers; they want to see proof of benefit or delivery of audience in a particular niche. So in constructing a market plan, you should always strive to raise your magazine's image above the others in order to establish its clear identity.

Once you have determined where you are by sizing up the market and your magazine's relative position in it, write everything down in a plan book. You then have a frame of reference that you should refer to once a month or once a quarter to remind yourself of all the things you worked so hard to analyze.

The plan for Travel Weekly

An example of how an understanding of a marketplace can help formulate a market plan for a magazine is Ziff-Davis' acquisition in the mid-1960s of Travel Weekly, a business publication for travel agents. At that time, conventional wisdom was that the travel agency business was shrinking, and in its place airlines would sell tickets through their own offices. But we looked at the market as a whole and saw that the airlines couldn't possibly afford to keep ticket offices functioning in every desired location. We then based our decision to expand Travel Weekly and to acquire other related properties on this analysis. And we were right: Travel Weekly's sales volume is now 20 times what it was when we bought it.

Another more recent example has to do with a facsimile machine phone directory that I helped to publish; the director lists end users of facsimile machines in the United States. Our assessment of the market--which came from looking at secondary research, talking to people out in the field, and talking to users--showed us that changes in the technology of facsimile machines were bringing many manufacturers into the market, causing the price per unit to drop from $10,000 to $2,500 and the speed of delivery from six minutes to 30 seconds. This meant that the market was becoming more dealer driven and less vendor driven-- in effect, was becoming more of a mass market like that for radios and cameras. This resulted in a decision to sell the directory through dealers as well as by direct mail, but we never would have done that had we not understood the market.

These examples demonstrate that by understanding the market--that is, where you are--it becomes easier to discern where you want to go.

Write problems down

A useful technique for figuring out the answer to the last question--How do you get there?--is to select a half dozen of the most troubling problems in marketing and sales and write them down. Then you brainstorm with your colleagues to find ways to overcome these problems. Allow yourself the luxury of taking what could be called an intuitive leap to what a solution might be. Think the unthinkable. And put those thoughts down on paper. Having done that, broaden the group to which these ideas are exposed and get more ideas. This can be an exciting, challenging process, as well as hard work, and it can really get the juices flowing. Out of this can evolve a miniplan that can be the last part of the overall market plan. If I were running a small publishing company, that's how I'd do it.

Once you have a market plan, all your activities--from research to direct mail to public relations--have to be part of the strategy you've set up. You now have more than a mere budget; you have an action plan that says, Wait a minute, what was it we said we were going to do? Why did we say we were going to do it? What were our assumptions? Were they right? Did we do what we set out to do?

Strategies for growth and profit have to start with a market plan, no matter how small the company or elementary the plan. And what really counts and has value is the disciplined process that goes into making the plan. This process, when it becomes second nature, can yield terrific results.

Table: Simple flow chart for a marketing plan

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