The Potential Market and

the Market Need

Learning Competencies:

 Identify the market problem to be solved or the market

need to be met; and (CS_EP11/12ENTREP-0a-1)
 Propose solution/s in terms of product/s and service/s
that will meet the need using techniques on seeking,
screening and seizing opportunities;
(CS_EP11/12ENTREP-0a-2)
The Potential Market
 The Importance of Potential Mar-
ket
(Lake, L., 2019)

• 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.
 How to Identify your Potential Market
(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 THIS QUESTION???
• 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?

Give Example...
Type of Markets
 Potential Mar-
ket

Potential market is the part of the total population that has shown some
level of interest in buying a particular product or service.
 Available Mar-
ket

• 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 Mar-
ket
• 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).
 Market Size
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.
Market Size

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.
Market
Size
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 MARKET NEED
1. NEED
• 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).
• is a driver of human action which marketers try to identify, emphasize,
and satisfy, and around which promotional efforts are organized
(www.businessdictionary.com).
 THE MARKET NEED
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 on-
line 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 com-
modities. 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.
The Market Need
 Define the Market Need for your Busi-
ness
Why is it important to clearly define market needs?

The market now demands that your business align to their needs. In order to prop-
erly 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).
WAYS TO DEFINE YOUR MARKET
(Lancaster SCORE (2010):
 Entrep_Q3_Lesson 1: Activity No. 2
A.