Assessment of Market potential

Once all the relevant facts have been collected, verified and found to be correct, they have to be put into perspective. They must be weighted according to their relative importance and translated into a realistic assessment of the market potential of the product in question. Similarly the prevailing price level, the problems and alternatives in the distribution area, the possibilities of advertising and sales promotion and varying expenditure levels are identified and evaluated.

At this stage it is important to realize that the following steps can be meaningful only if at the evaluation stage, all facts whether favorable or not are looked at objectively. Areas of positive opportunity are usually readily apparent; the discovery of weaknesses and problem areas may be a more laborious task, but the additional effort is needed in justifying later on.

The difficulty at this stage lies in the fact that it is not always easy to separate cause and effect; incomplete distribution may appear to be due to faulty sales organization but further enquiry may well show that it is the result of how consumer demand which in turn may stem from product deficiency or insufficient advertising.

Thus far from the marketing plan has dealt with the past and present almost exclusively establishing what the market is, who the competitors are etc But the plan itself must operate in the future , so it is important that in analyzing problems and opportunities and in assigning priorities to them, realistic assumptions are made as to future developments.

These assumptions will cover the areas of total market development, changes in market shares consumer attitude distribution patters competition prices levels, etc. Very often existing trends will continue and forecast will be relatively a simple matter. More difficult to assess and more dangerous to the success of the plan, if overlooked are those future developments that are not readily discernible from present trends.

Same Coin: Actually problems and opportunities are nothing more than opposite sides of the same coin. Where there is a problem there is also an opportunity even if it is only a negative opportunity in the sense that removal of difficulty will open up new marketing prospects. Every difficulty revealed by the statement of marketing facts, whether open solution or not should be included in the list of problems as should be the reciprocal opportunities. It is also very important to identify problems and opportunities in relation to the long term or short term success of the marketing effort. There is always danger that marketers concentrate on the short term problems and opportunities to the detriment of the, long term aspect.

Finally, it is essential priorities and decide which problems and opportunities are most important in terms of their potential effect upon sales. While it may not always be an easy task to determine them, it is necessary to pick out the two or three problems or opportunities that offer the greatest potential return for the money invested. There is often one that offers a far greater potential benefit than any of the others. In other words, the solution to one problem may well accomplish more than anything else that can be done. In this case, of course, it would be sensible to put these particular problems or opportunities at the top of the priority list.

One final warning must be given: intellectual honesty in the area of opportunities or problems is of focus attention on opportunities, regardless of the problem they involve. There may also be a tendency to gloss over past mistakes that create present and future problems. Both temptations should be avoided; objectivity and the willingness to face facts whether they are favorable or unfavorable or necessary for meaningful planning.