Understanding

and Targeting
Potential
Markets
Definition of Potential Market
• Part of total population showing interest in a
product/service
• Also known as Total Addressable Market (TAM)
• Importance of Potential Markets
• Future growth opportunities
• Proactive business strategies
• Appealing to investors
• Revenue growth and resilience
Identifying Potential
Markets
•Consider all target demographics
•Commonalities and differences with current
customers
•Questions to ask:
•Current and future needs
•Related products/services
 Reaching Potential Markets

•New marketing strategies

•Understanding demographics
•Preferred media and shopping channels
•Addressing concerns and values
•Effective language and communication
Types of Markets
•Potential Market
•Available Market
•Target Market
•Penetrated Market
 Understanding Market Needs

•Definition of Market Needs

•Market as a platform for exchange
•Importance of defining market needs
for businesses
Market segmentation
•a strategy that can assist the
entrepreneur in identifying the
particular homogenous segment to
serve. After all the consumer population
in its entirety basically has different
attitudes, perceptions, inclinations or
responses.
 The following are the important factors must
be considered in segmenting the market.
1. Accessibility of the market segment. The market
segment must be accessible to the business
2. Size of the market segment. The market segment
must be large enough to provide wealth to the
entrepreneurial venture.
3. Distinction of the market segment. The market
segment must be easily differentiated.
Market Segmentation
•Demographic
•Geographical
•Psychological
•Behavioral
MARKET TARGETING
•Market targeting is a stage in
market identification process that
aims to determine the set of buyers
with common needs and
characteristics.
1. Evaluating each market
segment and

2. Selecting the target market

segment or segments to serve
 MARKET SEGMENT EVALUATION

1. Size of the segment and

expected growth
2. Existing and probable structure
of the segment
3. Capability of the business.
SIZE AND GROWTH OF THE SEGMENT

•The size of the segment or its growth are

the two frequently asked details every
time a new business is about to be
opened. The size and growth of a
segment are considered favorable
indicators for doing business in that
particular location.
1.Need
The need characteristic answers the question “How many percent of the
market would need the product?” (Survey)

2. Pay
There must enough purchasing power for the consumer to be able to pay for
the product

3. Authority and Availability

Persons below 18 years of age, for example are not a legal market for cars
and alcoholic beverages
 STRUCTURE OF THE MARKET
SEGMENT
1. What is the level of competition in the market
segment? Are there strong and aggressive competitors?
2. Are there existing and potential substitute products?
Are the barriers to substitute products strong?
3. Who are the present and potential buyers in the
segment? Is the bargaining power of the buyers strong in
the segment?
4. How strong is the bargaining power of the suppliers in
the segment?
MARKET TRENDS

•You need to understand what's

going on with your market.
•What marketing trends and fashions
do you see having an influence on
your market segments?
MARKET SEGMENT SELECTION