ENTREPRENEURSHIP Quarter 1 – Module 2:

Recognize a potential market and analyze

the market need

The Potential Market potential markets such as:

1. Potential market is the part of the total population
that has shown some level of interest in buying a
particular product or service. Potential market is also
called Total Addressable Market (TAM) (MBA Skool
Team, 2018).
2. A potential market is the part of the market you can
capture in the future.
It includes the demographic groups that are not
currently your customers but could become customers
in the future (Lake, L, 2019).
3. Market potential is the total demand for a product in
a given business
environment (Bhasin, H., 2018).
The Importance of Potential Markets (Lake, L.,
2019)
Potential markets are an important part of a business's
future growth.
Ensure the future of your business by identifying new
customers. Think proactively about ways for your
business to grow and change. Show the
potential of your business to investors or collaborators.
Increase your revenue. Create a plan B that will
weather changes in the economy or market.
 Hospitals and other health related industries whose
employees are
prone to COVID -19 virus and other viruses.
 Business industries and other organizations who
want to ensure the
health condition of their employees.
 Employees and workers who need to report to work
to earn income.
 Households who needs to go out for their
necessities.
Note: Depending on the size and age of your
company, as well as your industry, you may have a
clear picture of the potential markets that are
available.
Reaching Your Potential Market (Lake, L., 2019)
Once you've identified and chosen a potential market
to begin
targeting, you will need new marketing strategies in
place to communicate

How to Identify Your Potential Markets (Lake,
L., 2019)
Consider every target demographic that you currently
sell to, as well as those you have not yet targeted.
Identify what they have in common with each other,
new milestones that they will encounter in their lives
that will impact their buying patterns, and where they
overlap or diverge from your current customers.
Ask yourself these questions to help you identify both
new ways to market your current products or services,
as well as new products and
services that you can begin selling.
What other products do my customers need now?
What related products will they need in the future?
Who else could make use of the products I am selling
now?
with them. Use this profile to identify:
 The demographic information that people in a
group have in common.
 The best forms of media to reach them.
 How they prefer to shop and make purchases.
 The concerns, struggles, or problems that you can
help them
overcome.
 What values matter to them, both in everyday life
and when shopping.
 The language that resonates with them.
Available Market

These are prospects who are willing and capable (have

WHAT IS IT sufficient resources) buyers, and have access to a
particular market or service
What demographic information does that new group
(www.businessdictionary.com). It is defined as the
have in common
number of people who are both willing and capable of
with my current customers?
buying a particular product or service in a particular
What demographic information does that new group
market (MBA Skool Team, 2020).
have in common
with each other?
For example, a business that makes face masks and Target Market
PPEs could identify
This refers to a group of potential customers to whom
a company wants to sell its products and services.
Target markets are generally categorized by age,
location, income, and lifestyle. Defining a specific
target market allows a company to home in on specific
market factors to reach and connect with customers
through sales and marketing efforts. (Kenton, W.,
2019).
Penetrated Market
This is a set of customers or clients who are already
using a particular product or service. A penetrated
market means that the potential users of a product or
service are aware of it, and in many cases are active
consumers of it (www.businessdictionary.com).
The size of a potential market helps a company
understand the level of investment it should make
further in the market, while taking into
consideration other factors. If the potential market is
very small, it means there is a very small fraction of
the total population showing any interest in the
product or category. This means that it is better that
the company doesn’t invest further in the product or
category because people won’t buy it. If the size of the
potential market is large, it means that there is a huge
fraction of the total population which is showing
interest in the product, so further investment can be
made on the product development or modification,
marketing, promotions etc. The size of the potential
market gives an estimate of what all a company should
do and how much it should invest
(MBA Skool Team, 2018).
The Market Need
1. Need
This refers to the motivating force that compels action
for its satisfaction. Needs range from basic survival
needs (common to all human beings) satisfied by
necessities, to cultural, intellectual, and social needs
(varying from place to place and age group to age
group) satisfied by necessaries
(www.businessdictionary.com).
The need is a driver of human action which marketers
try to identify, emphasize, and satisfy, and around
which promotional efforts are organized
(www.businessdictionary.com).
2. Market
A market is a place where two parties can gather to
facilitate the exchange of goods and services. The
parties involved are usually buyers and
sellers. The market may be physical like a retail outlet,
where people meet face-to-face, or virtual like an
online market, where there is no direct physical
contact between buyers and sellers (Kenton, W. &
Boyle, M., 2020).
A market does not refer to a particular place but it
refers to a market for a commodity or commodities. It
refers to an arrangement whereby buyers and sellers
come in close contact with each other directly or
indirectly to sell and buy goods (Shaikh, S., retrieved
2020).
A market is any place where sellers of particular goods
or services can meet with buyers of those goods and
services. It creates the potential for a transaction to
take place. The buyers must have something they can
offer in exchange for the product to create a
successful transaction (Moffatt, M., 2019) Your market
consists of (Stull, C., Myers, P.& Scott D.M. (2008) as
cited in: https://learn.marsdd.com/):
Existing customers: People who have already
purchased your product.
Prospects: People who have not yet purchased your
product but are considering it.
Target market users: People in your target market who
are not currently looking for a solution.
Define the Market Need for Your New Business
Why is it important to clearly define market needs?
The market now demands that your business align to
their needs. In order to properly align your marketing
efforts and your content, in particular to what buyers
need, you have to have a clear understanding of the
many intricacies, pains and pressures within your
market. To achieve such alignment, you need the
ability to define market patterns, needs, interests,
preferences, etc. for a comprehensive view of the
buying process is critical
(www.aberdeen.com).
Below are ways to define your market (Lancaster SCORE
(2010):
 Consider whether the business offers a new
solution to an old problem
or complements an emerging trend.
 Have a clear picture of your target market.
 Determine the benefits that your product or service
offers.
 Examine industry data that can confirm whether
there is a sustained,
growing demand for your product or service.
 Identify the percentage of market share that it is
realistic for you to
capture.