1.
Market Potential and Share
By Humsi Singh

2.
Introduction
• Marketing is about identifying and meeting human and social needs. One
of the shortest good definitions of marketing is “meeting needs profitably.”
• Marketing researchers engage in a wide variety of activities, ranging from
analyses of market potential and market shares to studies of customer
satisfaction and purchase intentions.
• The market forecast shows expected market demand, not maximum
market demand. For the latter, we need to visualize the level of market
demand resulting from a very high level of industry marketing expenditure,
where further increases in marketing effort would have little effect.

3.
Market Potential
• Market Potential can be defined as the total amount of possible
sales in a market.
• The estimated maximum total sales revenue of all suppliers of
a product in a market during a certain period.
• Market potential is the limit approached by market demand as
industry marketing expenditures approach infinity for a given
marketing environment.

4.
Categories of Market Potential
• General Market Potential: You figure out a customer profile (who you want to
target with your marketing) and combine that with the geographic size you want
to target (how many of those people are in that area). This is your general market
potential.
• Total Market Potential: Total market potential is the maximum sales available to
all firms in an industry during a given period, under a given level of industry
marketing effort and environmental conditions. A common way to estimate total
market potential is to multiply the potential number of buyers by the average
quantity each purchases, times the price.
• Area Market Potential: Because companies must allocate their marketing budget
optimally among their best territories, they need to estimate the market potential
of different cities, states, and nations. This is known as area market potential.

5.
Market Share
• Market share is the percentage of total sales that a
company can expect to get from the total market.
• To calculate market share divide your sales forecast by
the total market potential.
• The proportion of industry sales of a good or service
that is controlled by a company.

6.
Categories of Market Share
• Overall market share: overall market share is the company’s
sales expressed as a percentage of total market sales.
• Relative market share: relative market share is market share
in relation to a company’s largest competitor.
• Served market share: served market share a company’s sales
expressed as a percentage of the total sales to its served
market.

7.
Conclusion
• Marketing is a social process by which individuals and groups
obtain what they need and want through creating and
exchanging products and value with others. In order to make
marketing process successful, analysts and researchers study
about the market potential and structure of the enterprise.