Market Potential

Market Potential

Market Potential Jonathan Poland

Market potential is an estimate of the maximum sales of a product or service. It is a somewhat imaginary estimate as it assumes that a business can capture the entire market for a product. It is typically used by businesses to evaluate the potential of a new market or to compare the potential of different markets. Market potential is determined by a number of factors, including the size and growth of the population in the market, the level of consumer income and spending, and the availability and accessibility of competing products or services. By understanding the market potential of a particular market, a business can make informed decisions about whether to enter the market and how to position and market its products or services. The following are illustrative examples of a market potential.

Industry
The size of an entire industry such as fast food. This type of estimate tends to be accurate as governments and industry associations may publish relevant data.

Product Category
An entire product category such as boots.

Niche
Looking at market potential for a niche product or brand. For example, the size of the market for high-end boots.

Target Market
Estimates of market potential for a product with a specific target market based on factors such as price, lifestyle or demographics. For example, the size of the market for children’s boots.

Distribution
Considering the reach of the distribution channels. For example, selling boots in Canada and Europe might estimate the size of these markets as $Xb. This is also known as serviceable available market.

Learn More
Business Objectives Jonathan Poland

Business Objectives

Business objectives are specific targets or goals that an organization, team, or individual strives to achieve within a certain time…

What is Cost Overrun? Jonathan Poland

What is Cost Overrun?

A cost overrun occurs when the actual cost of completing a task or project exceeds the budget that was allocated…

Fixed Assets Jonathan Poland

Fixed Assets

Fixed assets are long-term resources that are owned by a business and are used to generate future economic benefits. In…

Geographic Segmentation Jonathan Poland

Geographic Segmentation

Geographic segmentation is a marketing strategy that involves dividing a target market into smaller groups based on geographical characteristics such…

Value Added Reseller Jonathan Poland

Value Added Reseller

A value added reseller (VAR) is a company that buys products from manufacturers or distributors and then resells them to…

Customer Retention Jonathan Poland

Customer Retention

Customer retention is the practice of reducing the loss of customers to competitors. A high customer retention rate typically results…

The Fundamentals of Business Mastery Jonathan Poland

The Fundamentals of Business Mastery

Overview Business comes down to just two areas: investments and deliverables. Leaders make investments in people, products that are delivered…

Puffery Jonathan Poland

Puffery

Puffery refers to exaggerated or overstated claims in marketing communications. It is a legal concept that acknowledges that customers expect…

Niche Market Jonathan Poland

Niche Market

A niche market is a small and specialized target market that is characterized by unique needs, preferences, and perceptions. These…

Content Database

Search over 1,000 posts on topics across
business, finance, and capital markets.

Marketing Technologies Jonathan Poland

Marketing Technologies

Marketing technology, or “martech,” refers to the tools and software used to support marketing efforts, such as advertising, brand management,…

Total Addressable Market Jonathan Poland

Total Addressable Market

A total addressable market (TAM) is the total potential revenue that a company can generate from its products or services…

Types of Work Jonathan Poland

Types of Work

Work refers to any productive activity or pursuit that is undertaken in order to create value. There are countless types…

Economic Opportunity Jonathan Poland

Economic Opportunity

Economic opportunity refers to the support that a society provides to individuals that enables them to thrive in the economy.…

Operational Efficiency Jonathan Poland

Operational Efficiency

Operational efficiency can be defined as the ratio between the inputs to run a business and the output gained from the business. It is primarily a metric that measures the efficiency of profit earned as a function of operating costs.

Competitive Intelligence Jonathan Poland

Competitive Intelligence

Competitive intelligence is the process of collecting and analyzing information about competitors, markets, industries, products, and customers in order to…

External Risk Jonathan Poland

External Risk

An external risk is a type of risk that is outside of your control and cannot be influenced or managed…

Design to Value Jonathan Poland

Design to Value

Design to value refers to the design requirements and considerations that aim to maximize the value of a product or…

What is Supply? Jonathan Poland

What is Supply?

Supply refers to the amount of a product or service that is available for purchase at a given price. In…