The Potential

Market and the

Market Need
MS. ANGELINE I. CURIOSO
 LEARNING COMPETENCY

Analyze the market need

 OBJECTIVES

• Analyze the market need;

• Define and explain the potential market, target market, available
market and penetrated market;
• Identify how to do a market analysis and market research; and
• Perform SWOT analysis.
 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).

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 Click icon to add picture

. A potential market is the part of the market you can

capture in the future. 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).

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The Importance of Potential Markets (Lake, L., 2019)
Click icon to add picture

• Potential markets are • Show the potential of

an important part of a your business to
business's future investors or
growth. collaborators.
• Ensure the future of • Increase your
your business by revenue.
identifying new • Create a plan B that
customers. will weather changes
• Think proactively in the economy or
about ways for your market.
business to grow and
change.

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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 that will 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?
Note: Depending on the size and age of your
company, as well as your industry, you may
have a clear picture of the potential markets that
are available.
• What demographic information does that new group
have in common with each other?
For example, a business that makes face masks and PPEs
could identify potential markets such as:
• Hospitals and other health related industries whose
employees are prone to COVID -19 virus and other
viruses.
• Business industries and other organizations who want to
ensure the health condition of their employees.
• Employees and workers who need to report to work to
earn income.
• Households who needs to go out for their necessities.
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Reaching Your Potential Market (Lake, L., 2019)
Once you've identified Click
andicon
chosen
to add apicture
potential market to
begin targeting, you will need new marketing strategies in
place to communicate with them. Use this profile to
identify:
• The concerns,
• The demographic struggles, or problems
information that that you can help
people in a group them overcome.
have in common. • What values matter to
• The best forms of them, both in
media to reach them. everyday life and
when shopping.
• How they prefer to
• The language that
shop and make
purchases resonates with them.

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 The figure below depicts what is a potential market with respect
to the total population and how it can be converted to a
penetrated market:

Total Population
Potential Market

Available Market

Target Market
Penetrated
Market

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Available Market
• Prospects who are willing
and capable (have sufficient
resources) buyers, and have
access to a particular market
or service
(www.businessdictionary.co
m).

• Defined as the number of

people who are both willing
and capable of buying a
particular product or service
in a particular market (MBA 11
Target Market
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,
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Penetrated Market
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.co
m). 13
• The individuals or companies that are interested in a
particular product or service and willing and able to pay
for it.

• Knowing what to sell, when and to whom

 Understand your Customers
• The Customer is always RIGHT!
• What do your customers want? How are you going to fill that want?
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 Demographics
Data that describes a group of people in terms of their age , marital status, family size, ethnicity, gender, profession, education, and
income.
 Psychographics
Data that describes a group of people in terms of their tastes, opinions, personalities, traits, and lifestyle habits.
 Identify your target market
for your product/service
1.Who are my customers: individual or companies?
2.If customers are individuals:
a. How old are they?
b. How much money do they earn?
c. Where do they live?
d. How do they spend their time and money?
3. If customers are companies:
a. What industries are they in?
b. Where are those industries located?
4. What needs or wants will my product or service satisfy?
5. How many potential customers live in the area in which I
want to operate?
6. Where do these potential customers currently buy the
products or services I want to sell them?
7. What price are they willing to pay for my products or
services?
8.What can I do for my customers that other companies are not
already doing for them?
 Customer Profile

• A description of the
characteristics of the person or
company that is likely to
purchase a product or service.
Market Segments
Groups of customers that share common characteristics .

• Segmenting or dividing your target market into several small

groups can help you develop a product or service that will meet the
customer needs.
• You can meet the needs of the entire market-narrow it down.
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 Understand the Competition
Business must identify some special customer’s need or want that is not being met.
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 Market
Research
System for collecting,
recording, and
analyzing information
about customers,
competitors, goods
and services.
Click icon to add picture
Secondary
Data
• Data found in already
published sources.
• Population, family size,
household, economic
trend, industry
forecasts and other
information.
 Primary Data
• Information collected for the very
first time to fit a specific purpose.
• Helps identify and understand the
target market
• Questionnaire/survey
*Observation*
Watch-see how many customers would be in that area

*Focus Group*
An interview with groups of target customers who provide
valuable ideas on products or services in depth discussion

Disadvantage of primary data

-Can be very time consuming.
 5 steps in primary
market research
1. Define the question
- You need to define exactly what it is that you
are trying to find out.

2. Select a Research Method

- Survey? Observation? Focus Group? How many
people should be involved in each?
- The method you use will depend on what type of
information you want to gather.

3. Collect Data
- Collect secondary data first. (Demographic &
Psychographic)
- This will help you determine what kind of
primary data research to perform.
- Surveys-need to be clear, easy to answer, and
only include the most important questions.
 5 steps in primary
market research
4. Analyze Data
- Interpret the information
- Consider the market segment you are
targeting

5. Draw Conclusions
- Once you have analyzed and interpreted
your data, you will need to determine how
to use the information.
- Develop a plan of action based on the
information you found in market research.
Identify your Competition Direct Competition

-Competition from a business that makes

most of its money selling the same or similar
products or services as another business.

Indirect Competition

-Competition by a business that makes only a

small amount of money selling the same or
similar product or service as another business.
Audience Q&A Session

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SWOT Analysis

MS. ANGELINE I. CURIOSO

What is SWOT analysis?
 SWOT
analysis
 A technique that enables a group or individual to move
from everyday problems and traditional strategies to a
fresh prospective.

 SWOT analysis looks at your strengths and weaknesses,

and the opportunities and threats your business faces.
 SWOT
analysis
 The SWOT Analysis framework is a very important and
useful tool to use in marketing Management and other
business applications

 As a basic tool its mastery is a fundamental requirement

for the marketer, entrepreneur or business person.
 SWOT
Strengths analysis
Oppurtunity
SWOT Weakness
Analysis

Threats
What is SWOT Analysis?

STRENGTHS

Characteristics of the business or a

team that give it an advantage over
others in the industry.
Positive tangible and intangible
attributes, internal to an
organization.
Beneficial aspects of the
organization or the capabilities of
an organization, process
capabilities, financial resources,
products and services, customer
goodwill and brand loyalty.
Examples - Abundant financial
resources, Well-known brand name,
Economies of scale, Lower costs [raw
materials or processes], Superior
management talent, Better
marketing skills, Good distribution
skills, Committed employees.
What is SWOT Analysis?

WEAKNESSES

Characteristics that place the firm at

a disadvantage relative to others.

Detract the organization from its

ability to attain the core goal and
influence its growth.
Weaknesses are the factors
which do not meet the standards
we feel they should meet.
However, weaknesses are
controllable. They must be
minimized and eliminated.
Examples - Limited financial
resources, Weak spending on R & D,
Very narrow product line, Limited
distribution, Higher costs, Out-of-
date products / technology, Weak
market image, Poor marketing skills,
Limited management skills, Under-
trained employees.
What is SWOT Analysis?

OPPORTUNITIES

Chances to make greater profits in

the environment - External attractive
factors that represent the reason for
an organization to exist & develop.

Arise when an organization can

take benefit of conditions in its
environment to plan and execute
strategies that enable it to
become more profitable.
Organization should be careful and
recognize the opportunities and
grasp them whenever they arise..

Examples - Rapid market growth,

Rival firms are complacent, Changing
customer needs/tastes, New uses for
product discovered, Economic boom,
Government deregulation, Sales
decline for a substitute product .
What is SWOT Analysis?
THREATS

External elements in the

environment that could cause
trouble for the business - External
factors, beyond an organization’s
!
control.
Arise when conditions in external
environment jeopardize the
reliability and profitability of the
organization’s business.
Compound the vulnerability when
they relate to the weaknesses.
Threats are uncontrollable. When a
threat comes, the stability and
survival can be at stake.
Examples - Entry of foreign
competitors, Introduction of new
substitute products, Product life cycle
in decline, Changing customer
needs/tastes, Rival firms adopt new
strategies, Increased government
regulation, Economic downturn.
Audience Q&A Session

ⓘ Start presenting to display the audience questions on this slide.

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