Brian Tracy says that before and during the preparation of a marketing plan, one should always consider answers to four basic questions. Only then it is possible to prepare a good marketing plan regardless of whether it is meant for the start of a new business or for an existing company with established products.
1. Is there a market for our product?
Although you believe the perfection of your idea, there may be reasons why noone else has tried to market it. To be sure, try to test market several variations of the product or service. If a prototype would be too expensive to make, make sketches and visit your target audience. Just a real customer can tell whether market exists or not. The aim of your visit will be to receive an immediate feedback. Ideally, you might get the first orders.
When preparing a marketing plan, automatically assume that the competitors are working on introducing a similar product or service. So act fast.
2. Is the market large enough to be worthwhile pursuing?
Is it worth it? Can you eventually sell enough to pay all the investments and time that you will have spend on all this? There are many "niche markets" that are simply not worth pursuing.
3. The market is sufficiently concentrated?
If the market is big enough and you have to address it effectively, would the communication costs be not too high?
Generally, popular products tend to have only a small margin due to high concentration. In contrast, specialized products that appeal to only a limited group of customers, have higher margins and are available only in specialized shops. In the age of online stores, however, the cost of bringing a new product to market is lower, but the margins of these specialized products are also lower due to their easier accessability.
4. Who are the competitors?
Who are the main competitors? Or: What products can your customers buy instead of your product?
Most new products do not succeed either because there is no market for them, or the market is not big enough, or it is not concentrated enough to be worth to effectively address. In addition, often there are competing offers, which are somehow more applealing to customers.
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