A potential market is a market you haven’t reached that covers people interested in the product, but not yet buyers. If a brand expands its products, it can attract and attain new demographics that aren’t customers now.
In this article, we’ll unveil why a potential market is essential and uncover how you identify it.
Why is a potential market important?
A potential market is crucial when a company expands its product line or customer base. A brand can continue reaching its current customers and target new demographic groups to increase sales and profits.
The accurately identified potential market enables you to
- outline the future of your business growth and new demographic groups;
- choose strategies for your company to expand and reach more people;
- demonstrate the potential of your brand to partners and encourage them to invest;
- increase customer base;
- boost sales;
- increase profits;
- develop a plan that will cover the changes in the economy and market to adapt fast.
When identifying a potential market, an entrepreneur can estimate the investments a business needs. A brand can figure out the size of a potential market and decide whether it’s worth allocating a budget to it. For instance, if a segment of interested consumers is small, it’s better not to put much effort into it because it won't bring the desired result. However, if the market is large, business owners consider investing and developing a strategy.
You can develop a new product, improve an existing one, or modify it to meet the needs of a bigger target audience. Consider calculating potential profits to make sure that they will cover your expenses and have a high ROI.
Now that you know why a potential market is essential, let’s explore the ways to identify your potential market.
How do you identify a potential market?
Entering a new market is an essential step for every constantly expanding business. If you have a business and you plan to grow it in the future, you need to outline your potential market. This way, you’ll be ready with a product, strategy, promotion, and marketing to meet the needs and desires of a demographic group different from yours. In this section, we’ll provide a step-by-step guide on what to do when you want to identify your potential market.
- Pay attention to every demographic group you offer your products to. To find your potential market, you need to explore every audience segment you sell products to and those who aren’t your customers. Identify each group and find out what they have in common. Your task is to discover their needs, requirements, desires, preferences, and life situations in which your product can become a solution.
- Answer specific questions related to the potential market. There are several crucial questions you should ask yourself before you can identify your potential market. Together with your team, think of the products your existing customers might need in the future, what items they need now, and what demographic groups can also be interested in your product. Moreover, you need to identify the characteristics your potential and current customers share. Afterward, consider the things the new customers have in common.
- Find ways to target new markets. Once you answer the questions, you’ll find a way to reach your new target market. You’ll be ready with your unique selling proposition, marketing strategy, and promotion techniques to help you win new consumers. For example, if you sell baby products, you can sell them not only to parents but also to grandparents and children's facilities. Besides, consider producing children's products for different age groups.
- Develop a marketing strategy. After identifying your potential market, prepare new strategies to establish connections with potential clients. Having several target markets means coming up with marketing approaches that will help you build trusting relationships and drive interest. Your offer and message should be personalized and crafted to the needs of your audience segment. This way, you’ll be able to attain your business goals. SendPulse enables you to craft and send your message through the most popular communication channels. With its help, you can design personalized email campaigns, web push notifications, and chatbots. Moreover, you can create a landing page to reach a wide audience of potential clients.
- Create buyer personas. Develop a customer profile for your potential market. You should show your care to potential and current clients. An accurate buyer persona will cover the main points such as demographic information, preferred communication channels, ways they shop (in-store or online), pain points, struggles, concerns, the things that matter for them, and appropriate language for communication. Later, you’ll use this information to create relevant messages, outline a budget, and select the most suitable marketing channels.
Congrats, now you know what a potential market is and why it’s essential. Hope that our guide will come in handy when you decide to identify your potential market.
Last Updated: 28.10.2022