What is market potential and size?
Table of Contents
What is market potential and size?
Market potential is the upper limits of the size of the market for a product. It is measured either by volume of sales or value of sales over a specific period of time. Market potential is a fluid concept as it can increase or decrease over time based upon environmental factors.
What does market potential mean?
Market potential is an estimate of the amount of money your clients can expect to make from the product or service they plan to market. Their estimate will only be as good as the information they use and the assumptions they make.
How do you determine the market potential of a product?
To find the overall market potential (that is, the potential market volume), multiply your number of target customers by the penetration rate (see steps 2 and 3 above).
What is potential product?
Potential Product: The potential product includes all augmentations and improvements the product might experience in the future. This means that to continue to surprise and delight customers the product must be constantly improved.
What market size means?
The “market size” is made up of the total number of potential buyers of a product or service within a given market, and the total revenue that these sales may generate.
What is the difference between market and potential market?
Potential market – those in the total population who have interest in acquiring the product. Available market – those in the potential market who have enough money to buy the product. Qualified available market – those in the available market who legally are permitted to buy the product.
Why is market potential important?
Market potential helps business plan better and launch their products and services with better preparation. Depending upon the overall market potential, companies can identify the sales potential, or the amount of sales they would be doing in that identified market.
The first and most important factor to consider while determining market potential is the market size of your product. Market size is the total market sales potential of all companies put together. So if i planned on launching a new soap or Shampoo, then all the different companies such as HUL and P&G are my competitors.
What is market size?
Market size is the size of the people who could potentially want your product. It ca be measured in $ turnover, volume of product sold, or other measures. (NB. Some people may never buy pet food so do not form part of that market.)
Market size and share. Market size can be given in volume of product sold or value of products. This can therefore be calculated by adding all the different company’s sales value or volume together. Market shareis the proportion (usually percent) of the total market held by one particular company.
How can market potential be increased?
Of course, market potential can increase if wages increase, taxes are lowered or interest rates decline because product demand may increase. As with consumer and competitor research, you can use secondary and primary data for your analysis.