THE POTENTIAL MARKET

and the MARKET

NEED
ENTREPRENEURSHIP

Subject Teacher: MIKEE LYKA MENES

POTENTIAL
MARKET
 THE POTENTIAL MARKET
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).
• It includes the demographic groups that are not
currently your customers but could become
customers in the future (Lake, L, 2019).

• Market potential is the total demand for a product

in a given business environment (Bhasin, H.,
2018).
 • Potential markets are an important part of a
business's future growth.
THE • Ensure the future of your business by

IMPORTANCE identifying new customers.

OF POTENTIAL
• Think proactively about ways for your
business to grow and change.
MARKETS • Show the potential of your business to
(LAKE, L., 2019) investors or collaborators.
• Increase your revenue.
• Create a plan B that will weather changes in
the economy or market.
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?
• What demographic information does that new group have in
common with my current customers?
• What demographic information does that new group have in
common with each other?
 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 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
sufficient resources) buyers, and have access to a
particular market or service (www.businessdictionary.com)

• It is defined as the number of people who are both willing

and capable of buying a particular product or service in a
particular market (MBA Skool Team, 2020).
 TARGET MARKET
• 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
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).
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 transactio n to take place. The buyers must have
something they can offer inexchange 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?
 WHY IS IT IMPORTANT TO CLEARLY DEFINE
MARKET NEEDS?
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.
END OF
PRESENTATION