Many small business owners do not know the real market potential for their products or services. Bob Hennessey
Franklinville, NJ (PRWEB) February 22, 2017
Franklinville, NJ MyMarketingDept. Inc. is making available a free B2B Market Potential Calculator for small business. This calculator is available for download at the company website by using this link https://goo.gl/rNgJhH.
Bob Hennessey, President of MyMarketingDept. Inc. said, “We wanted to offer small business an easy way to calculate their market potential.
The need for knowing your real market potential enables firms to make:
- Superior Strategic Decisions
- Appropriate Resource Spend
- Accurate Sales Goals
Knowing how big your market potential is should impact and drive many business decisions. Many small business owners overlook these marketing fundamentals Hennessey warns them to make sure they do not.
He explained, first, the Internet is a mass-market distribution communications tool. It allows marketers to reach mass audiences of tens to hundreds of millions and billions of people.
The question suggested to small business consider how to utilize a mass-marketing tool like the Internet when small business target audiences are for most in the thousands and tens of thousands. The caution here is about cost. At what cost does it make sense to utilize mass market marketing to reach relatively small B2B audiences?
Second and related to the cost-benefit point above is at any point in time small business needs to know what the market potential is for its B2B goods or services.
To make his point about the need to know market potential Hennessey related an experience working for a B2C company where understanding the potential universe of its customers was imperative given a 100 million plus customer base.
His firm knew that the replacement cycle for their product was on average every seven years. This meant that the total universe of customers was 100 million, but the real in-the-market potential was only 14.3 million customers or one seventh of the total market in any single year due to the product replacement cycle.
Additionally, the customer purchase cycle was between 12 to 18 months from the time their customers began to think about purchasing their product to actual purchasing the product. This factor reduces the available market for the company’s products by approximately another one-third to 9.6 million customers.
Of this number, you must apply the dominant competitor's market share which was 50%. This meant that the available market and that of all other competitors was half of the 9,572 million customers or 4,786 million or only 4% to 5% of the total market in a given year.
As a rule of thumb, the company would project the total market universe of its annual market potential in any given year to be 4% to 7% of the total market potential. This annual total market potential would also allow for market share gains and the varying ups and downs of economic market cycles.
Hennessey summarized the benefits of knowing your market potential as two fold:
1. Your market potential is always smaller than you think
2. Knowing your real market potential allows you to make better tactical marketing decisions including expense spending
For more information about the market potential for small business, contact MyMarketingDept. Inc. at http://www.mymarketingdept.com or call 866-875-2534.