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ENTREPRENEURSHIP
QUARTER 1– WEEK 3
MODULE 3: THE POTENTIAL MARKET AND THE MARKET NEED
MELC: Analyze the market need.

Prepared by: EMERENCIANA H. SALAPARE

SHS Teacher II

INTRODUCTION
Market potential is the estimated maximum1 total sales revenue of all suppliers of a product in a
market during a certain period (https://www.business.dictionary.com). This is important part of
a business growth, to set a target customers that make up its share in the market to ensure future
LESSON 4: THE POTENTIAL MARKET AND THE
MARKET NEED

The following figure depicts what is a potential market with respect to the total
population and how it can be converted to a penetrated market:
(www.mbaskool.com)

Potential Market

 It is the part of the market you can capture in the future.(www.thebalancesmb.com)

Market Potential

 It is the entire size of the market for a product at a specific time.(www.study.com)

Available Market

 Defined as the number of people who are both willing and capable of buying a
particular product or service in a particular market.(www.mbaskool.com)

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Target Market

 It refers to a group of potential customers to whom a company wants to sell its

products and services.(www.investopedia.com)

Penetrated Market

 It refers to the set of customers who is already using a particular product or service.
(www.mbaskool.com)

Need

 It refers to 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. (www.businessdictionary.com)

Market

 It is a place where buyers and sellers can meet to facilitate the exchange or transaction
of goods and services.(www.investopedia.com)

Existing Customers

 It consists of customers who have purchased or otherwise used an organization’s

goods or services, typically within a designated period of time.(www.knowthis.com)

Prospects
 A potential customer that has been qualified as fitting certain criteria.
(www.thebalancesmb.com)

Target Market Users

 These are people in your target market who are not currently looking for a solution.

(Note: The following terms above are very important for you to have a clear understanding
on potential market and the market needs.)

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IMPORTANCE OF MARKET POTENTIAL

(www.mbaskool.com & www.thebalancesmb.com)

1. Potential markets are an important part of a business future growth.
2. Ensure the future of your business by identifying new customers.
3. Think proactively about ways for your business to grow and change.
4. Show the potential of your business to investor or collaborators.
5. Increase your revenue.
6. Create plan B that will weather changes in the economy or market.
7. Market potentials helps your business plan better, and launch your products
and services with better preparation.
8. It helps you identify the sales potentials, or amount of sales you should be
doing in that identified market.

By identifying and pursuing potential markets, you are not increasing your market
share for today: you are ensuring your market share will increase for the future.

HOW TO IDENTIFY YOUR POTENTIAL MARKETS

(www.thebalancesmb.com)

Potential markets take one of three forms:

1. New products that you market to your current customers.
2. New products that you market to new customers.
3. Current products that you market to new customers.

To identify your new 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.

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.

1. What other products do my customers need now?

2. What related products will they need in the future?
3. Who else could make use of the products I am selling now?

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 4. What demographic information does that new group have in common with my
current customers?
5. What demographic information does that new group have in common with
each other.

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. Once you have
identified your potential market, there are two ways to analyze the market need:
(www.sixthfactor.com>market-research)

1. Qualitative Assessment – are ways of gathering information that yield results

that cannot easily be measured by or translated into numbers. They are often
used when you need the subtleties behind numbers – the feelings, small
actions, or pieces of community history that affect the current situation.
2. Quantitative Assessment – tools focus on countable values. They evaluate the
individual skills, knowledge, and performance based on specific standards by
matching outcomes with goals. This is given in the form of objective exams
with multiple choices or questions that require short answer.

In doing the above assessment, in conducting your market research use the following
profile below to identify: (www.thebalancesmb.com)

1. The demographic information that people in a group have in common.

2. The best forms of media to reach them.
3. How they prefer to shop and make purchases.
4. The concerns, struggles, or problems that you can help them overcome.
5. What values matter to them, both in everyday life and when shopping.
6. The language that resonates with them.

STEPS IN CONDUCTING A MARKET ANALYSIS

There are three steps you should take to ensure a thorough and accurate analysis of your
intended market. (https://www.uschamber.com)
1. Establish the purpose of your market analysis - It is important to understand why
you are conducting a market analysis in the first place. Familiarize yourself with the
regulations in your industry, or maybe you’re curious how your business compares to
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 others in your market. Ask yourself what issues or concerns you have, and make them
part of your purpose to conduct a market analysis. That way, you aren’t blindly
researching without an end goal in mind.

2. Identify your target audience and competitors - Your market analysis should focus
on two main groups: your customers and your competitors. You’ll want to know who
your customers are and how many of them exist, and understand their buying habits
and how much they’re willing to pay. As for your competitors, you should know who
they are and understand their challenges and successes, so you can tactfully compete
and stand out from them. Recognizing both sides will help you form a more efficient
business plan.
3. Gather and analyze market data - There are many ways to gather your market data,
from state and local commerce sites to customer interviews and surveys. From there,
find trends to understand where you might be lacking and where you might be
succeeding. Then, organize your findings into your market analysis.

o Size, growth rate, major customer groups and other industry

details
o Target market and their needs, demographics, buying trends,
size and forecasted growth
o Your expected market share percentage, pricing, gross margin
and discounts you might offer
o The results of your analysis
o How you will follow regulations and practice compliance

DEVELOPMENTAL ACTIVITIES

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Direction: List down the potential markets of a business that makes the following
goods/services.
FACE MASKS AND PPEs FOOD DELIVERY
1. 1.
2. 2.
3. 3.
4. 4.

Let’s account for it!

Direction: Give five (5) examples of Market Needs.
1.
2.
3.
4.
5.

WORKSHEETS
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Directions: Evaluate the given business ideas below if they have better opportunities this
time of COVID 19 by writing “YES” or “NO”. Justify your answer in two to three
sentences. Write your answer in the third column of the table.

BUSINESS IDEAS Yes or No REASONS

1. Pickup and Delivery

2. E-Commerce Market

3. Grocery Delivery

4. Fitness and Wellness

5. Computer Shop

Part 1. True or False

Directions: Identify if the statements are true or false. Choose the letter that represents the
correct combination of answers.
1. Statement I – Market is a place wherein buyers and sellers can meet to exchange
goods/services.
Statement II – Need refers to a motivating force that compels action for its
satisfaction.
a. Both statements are true.
b. Only Statement I is true.
c. Only Statement II is true.
d. Both statements are false.
2. Statement I – Market potential refers to the entire size of the market for a product.
Statement II – Target market refers to the set of customers who is already using a
particular product.
a. Both statements are true.
b. Only Statement I is true.

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 c. Only Statement II is true.
d. Both statements are false.
3. Statement I – Customer is the one who consumes the goods.
Statement II – Consumer is the one who buys the goods/services.
a. Both statements are true.
b. Only Statement I is true.
c. Only Statement II is true.
d. Both statements are false.

4. Statement I – Qualitative assessment is a tool focuses on countable values.

Statement II – Quantitative assessment are ways of gathering information that yield
results that cannot easily measured.

a. Both statements are true.

b. Only Statement I is true.
c. Only Statement II is true.
d. Both statements are false.
5. Statement I – Identifying your target audience and competitors focus on 3 main
groups.
Statement II – In recognizing your target audience and competitors will help you form
a more efficient business plan.

a. Both statements are true.

b. Only Statement I is true.
c. Only Statement II is true.
d. Both statements are false.

References:

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A. Online and Other Sources
https://www.mbaskool.com
https://events.uschamber.com
https:// www.thebalancesmb.com
https://www.study.com
https://www.investopedia.com
https://www.businessdictionary.com
https://www.knowthis.com
https://www.thebalancesmb.com)

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