1. Ch.3 Market Potential, Market Demand, and Market Share
MKTG 500: Marketing Concepts
Go Beach!
MKTG 500

2. Strategic Market Definition of the Beverage Market
MKTG 500

3. Broad Strategic Market Definition
“……..” provides three key benefits:
It opens the window of opportunity to a broader set of customer needs.
It provides better understanding of potential substitutes and competitive threats.
It helps a business better understand fundamental customer needs.
MKTG 500

4. Market Potential
“……..” is the maximum potential for the market definition.
For instance, what is the market potential for disposable diapers?
=> The number of babies between newborn and 2y.
The market potential (maximum number) for personal computers is estimated to be 250 million per year.
MKTG 500

5. Maximum Market Potential and Current Market Demand
MKTG 500

6. Market Penetration and Market Development Index
MKTG 500

7. Customer Adoption and Market Development
MKTG 500

8. Market Demand
At any point in time, the market demand for a product is made up of new customers to the market and existing customers who continue to purchase the product.
Example: Market demand for PCs
Existing customers for PCs repurchase at an average rate of every four to five years. Then, the market demand in 2005 can be written as:
Market demand in 2005
= replacement purchases + New customer Purchase
= Average 1999 and entering market in 2005
= 125 million + 75 million
= 200 million
Question: What will be the market demand for PCs in 2010?
MKTG 500

9. Product Life Cycle and Market Demand
MKTG 500

10. MKTG 500

11. PC Market Demand and Marketing Profitability
MKTG 500

12. Sales Forecast How much to produce?
Volume (Units) = Market Demand(Units)*Market Share
IF the unit volume forecast is correct, and a plant with the right level of capacity in built, total production volume will be near plant capacity, and the best production economies will be achieved.
MKTG 500

13. Market Share Development Tree
MKTG 500