Saint Mary’s Academy

Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

The Potential Market and the

Market Need
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

Learning Competency:
• Recognize a potential market and analyze the
market need.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT
Analyze the pictures below and list down at least three (3) potential markets that entrepreneurs should consider
during this COVID -19 pandemic and indicate their needs.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

The Potential Market

1. 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).
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

 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.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

2. Market potential is the total demand for a

product in a given business Environment.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

How to Identify Your Potential

Markets?
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

How to Identify Your Potential

Markets?
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.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT
Questions that will help you identify both new ways to market your current
products or services.
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?
What demographic information does that new group have in
common with each other?
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

Reaching Your Potential Market

 The demographic information that people in a group have in common.
 The best forms of media to reach them.
 How they prefer to shop and make purchases.
 The concerns, struggles, or problems that you can help them
overcome.
 What values matter to them, both in everyday life and when shopping.
 The language that resonates with them.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

A. 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.
 1. GEOGRAPHIC SEGMENTATION
– total market is divided according to
geographical location

VARIABLES to consider:
-climate
-dominant ethnic group
-culture
-density (either rural /urban)
2.DEMOGRAPHIC SEGEMENTATION –
divided based on consumers
VARIABLES to consider :
-gender
-age
-income
-occupation
-education
-religion
-ethnic group
-family size
3.PSYCHOLOGICAL SEGMENTATION
– divided in terms of how customer s think
VARIABLES to consider :
-needs/wants
-attitudes
-social class
-personality traits
-knowledge/awareness
-brand concept
-lifestyle
4.BEHAVIORAL SEGMENTATION –
divided according to customers behavior
pattern
VARIABLES to consider :
-perceptions
-knowledge
-reaction
-benefit
-loyalty
-responses
B. CUSTOMER REQUIREMENTS – are
the specific characteristics that the
customers need from a product or service

2 TYPES :

1.Service requirement
2.Output requirement
SERVICE REQUIREMENT- intangible
things / product that cannot be touched but
the customer can feel the fulfillment

OUTPUT REQUIREMENT – tangible

things that can be seen
- characteristic specifications that a
consumer expects to be fulfilled in the
product
MARKET SIZE – like a size of the arena
where the entrepreneurs will play their
business
- approximate number of sellers and
buyers in a particular market
- entrepreneur’s most critical task is to
calculate the market size and the potential
value that market has for their start-up
business
TO DETERMINE THE MARKET SIZE ,
entrepreneur will conduct a strategic
market research from a reliable source
using the following method :

1st STEP - estimate the potential market –

approximate number of customers that
will buy the product or avail the service
2nd STEP – estimate the customers who
probably dislike to buy your product/ avail
the service

3 STEP – for the entrepreneur to estimate

rd

the market share, that means plotting and

calculating of the competitors market
share to determine the portion of the new
venture
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

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.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

The Market Need

 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

1. Need
A motivating force that compels action for its satisfaction. Needs
range from basic survival needs (common to all human beings)
satisfied by necessities, to cultural, intellectual, and social needs
(varying from place to place and age group to age group) satisfied by
necessaries.
 A driver of human action which marketers try to identify,
emphasize, and satisfy, and around which promotional efforts are
organized.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

2. Market
A Market is a place where two parties can gather to facilitate
the exchange of goods and services. The parties involved are
usually buyers and sellers. The market may be physical like a
retail outlet, where people meet face-to-face, or virtual like
an online market, where there is no direct physical contact
between buyers and sellers.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

A market is any place where sellers of particular goods

or services can meet with buyers of those goods and
services. It creates the potential for a transaction to
take place. The buyers must have something they can
offer in exchange for the product to create a successful
transaction
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

Existing customers: People who have already

purchased your product.
Prospects: People who have not yet purchased your
product but are considering it.
Target market users: People in your target market
who are not currently looking for a solution.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

Why is it important to clearly define market needs?

 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

Below are ways to define your market:

• Consider whether the business offers a new solution
to an old problem or complements an emerging trend.
• Have a clear picture of your target market.
• Determine the benefits that your product or service
offers.
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

• Examine industry data that can confirm whether there is a sustained,

growing demand for your product or service.
• Identify the percentage of market share that it is realistic for you to
capture. The more competition you have, the lower the margins will
be.
• Consider how realistic your pricing is. How can you present your
product or service to potential customers so that it appears to be a
good value, while still affording you a healthy profit?
 Saint Mary’s Academy
Agoo, La Union
SENIOR HIGH SCHOOL DEPARTMENT

THANK YOU