LEARNING OUTCOMES
After studying this unit you should be able to identify the following:
Market potential and sales forecasting
Market and sales potential
Market and sales forecasting
LEARNING OUTCOMES
After studying this unit you should be able to identify the following:
Market potential and sales forecasting
Market and sales potential
Market and sales forecasting
Introduction
When marketing managers identify a new trend in the market based on
marketing information, it is important that they carefully determine the
current size and future potential of a sales territory. When wireless
carriers realized there was a market of potential users who didn't want or
didn't qualify for long-term contracts, they quickly moved to introducing
prepaid services. Marketing managers need to accurately predict the
market. This means that they should evaluate the market potential and
calculate how much market share the organization can achieve.
Market potential and sales forecasting
The market potential focuses on the current size and characteristics of the
market, while the sales forecast looks at the future market situation.
Marketers often face the problem of how much consumers will buy
overall. Market potential and revenue forecasting help marketers
overcome this difficulty because the elements of market research focus
on the current size and characteristics of the market (market potential)
and the future market situation (sales potential).
, Levels of market potential
Consumer level: most popular level of demand measurement as it
provides information on the number of final consumers defined in
different market segments.
Product level: enterprises can measure consumer demand for one
brand or all of its brands in a given product category.
Geographic level: the total market can be divided into geographical
segments and it is thus possible to express the demand measurement
in geographic terms.
Time level: a demand measurement should also be specific in terms of
time of purchase and should provide information on the sales over
different time periods.
Market potential
Market potential = consumer population (number of people) + consumer
demands (needs and desires) + consumption potential (willingness and
ability to consume).
Total Market: (Market Potential) refers to all actual and potential
buyers of a product type.
Available Market: refers to the actual and potential buyers of a
product who have an interest, income, and ability to purchase the
product at a given time.
Target market: is that part of the available market to which the
company has directed its marketing activities.
Penetrated market: refers to the number of consumers who have
already purchased the product.
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