PRODUCT MANAGEMENT

NIMISH D

MARKET POTENTIAL
A PRECURSOR TO PRODUCT STRATEGIES

MARKET POTENTIAL
POTENTIAL
THE MAXIMUM SALES REASONABLY ATTAINABLE
CONDITIONS WITHIN A SPECIFIED PERIOD

UNDER

GIVEN

SET

OF

FORECAST
AMOUNT OF SALES EXPECTED TO BE ACHIEVED UNDER A SET OF CONDITIONS
WITHIN A SPECIFIED PERIOD OF TIME

QUOTA
SALES EXPECTED TO BE ACHIEVED FORM AN INDIVIDUAL UNDER A SET OF
CONDITIONS WITHIN A SPECIFIED PERIOD OF TIME

RELATED TERMS

AREA POTENTIAL
DERIVED BY BREAKING DOWN SALES IN THAT AREA
SALES POTENTIAL
FIRM LEVEL ANALOGY FOR MARKET POTENTIAL. MOST OBVIOUS APPROACH TO
CALCULATING SALES POTENTIAL IS TO MULTIPLY ESTIMATED POTENTIAL OF THE
MARKET BY MARKET SHARE.

MARKET POTENTIAL
CAN BE USED

TO MAKE ENTRY EXIT DECISIONS

TO MAKE RESOURCE LEVEL DECISIONS
TO MAKE LOCATION AND OTHER RESOURCE ALLOCATION DECISIONS
TO SET OBJECTIVES AND EVALUATE PERFORMANCE
AS AN INPUT FOR FORECAST

DERIVING MARKET POTENTIAL ESTIMATES

CALCULATION
Secondary Data

Model / Statistical
Method

Past Sales Data

Surveys /
Primary Data

Judgment

Potential Estimate

METHODS OF ESTIMATING POTENTIAL

DETERMINE THE POTENTIAL BUYERS / USERS OF THE PRODUCT

DETERMINE HOW MANY ARE IN EACH POTENTIAL GROUP OF BUYERS DEFINED BY

STEP1

ESTIMATE PURCHASE OR USAGE RATE

PRODUCT STRATEGY

BENEFITS OF PRODUCT STRATEGY

ENHANCES CO-ORDINATION AMONG FUNCTIONAL AREAS OF THE ORGANIZATION

DEFINES HOW RESOURCES WILL BE ALLOCATED
LEADS TO SUPERIOR MARKET POSITION

CHARACTERISTICS OF COMPETITIVELY SENSITIVE STRATEGY

IT IS SOMETHING A COMPETITOR CANNOT DO

IT IS SOMETHING A COMPETITOR WILL CHOOSE NOT TO DO
COMPETITORS WILL BE AT A DISADVANTAGE WHEN THEY DO IT
IT CAUSES US TO GAIN IF THE COMPETITOR DOES IT

ELEMENTS OF PRODUCT STRATEGY

STATEMENT OF OBJECTIVES
SELECTION OF STRATEGIC ALTERNATIVES
SELECTION OF CUSTOMER TARGETS
CHOICE OF COMPETITOR TARGETS
STATEMENT OF CORE STRATEGY
DESCRIPTION OF SUPPORTING MARKETING MIX
DESCRIPTION OF SUPPORTING FUNCTIONAL PROGRAMS

HIERARCHY OF OBJECTIVES

STRATEGIC ALTERNATIVES

INCREASING PROFITABILITY

DECREASING INPUTS
INCREASING OUTPUTS

POSITIONING

SIZE/GROWTH OF THE SEGMENT

OPPORTUNITIES FOR OBTAINING COMPETITIVE ADVANTAGE
RESOURCES AVAILABLE
CHOICE COMPETITOR TARGET

STEPS INVOLVED IN POSITIONING

IDENTIFY ALTERNATE POSITIONING THEMES BY CONSULTING THE ADVERTISING
ACCOUNT TEAM
SCREEN ALTERNATIVES ACCORDING TO - RELEVANCE TO CUSTOMERS
- FEASIBILITY FOR THE FIRM
- COMPETITIVELY SENSITIVE
- HELPFUL FOR MEETING OBJECTIVES
SELECT THE POSITION THAT BEST SATISFIES THESE CRITERIA
IMPLEMENTATION

ASSIGNMENT

5 GROUPS

DEVELOP A PRODUCT STRATEGY BASED ON ABOVEMENTIONED METHOD

TO BE PRESENTED AND ANALYZED BY THE CLASS

REFERENCES

PRODUCT MANAGEMENT LEHMANN & WINER