Potential sales, concentration ratios and more (MR, unit 5)

Research into potential sales

Estimates the part of the market within possible reach of a product

Decision to exploit sales potential depends on the cost of sales promotions and selling, which are required to realise that potential.
The market is dynamic & market research should reveal changing situations

Potential depends on:

• how essential to customers
• is it a durable commodity with postponable purchase?
• size of possible market
• competition

Other aspects to investigate;

• inc. or dec. demand in a market segment
• inc. or dec. demand in a geographic area
• timing of demand (cyclical/seasonal)

Concentration ratios
Express market research is to assess % of market held by top firms e.g. top 3 have 60%, top 5 have 68%, top 10 have 85%