Section 11 Potential Market

February 7th, 2013 Leave a comment Go to comments
WINNERS= Products which can be used by every man, woman, and child in the country.

The American Marketing Association defines potential market as “the maximum possible sales opportunity for all sellers of a good or service”.  I define potential market as the number of persons who would be able to use your product if you gave them one for free.  Again, in my opinion, potential market consists of all people who would be able to USE it, as distinguished from the people who would be able to BUY it, which is two totally different things.  Potential market is a different animal from potential sales and that is why potential sales has a separate chapter of its own (which follows potential market).

I determine the size of the potential market using two inputs:

  1. Primary information, which is information obtained by showing or using the product, and is gathered through focus groups, field research, simulations, observing end users, etc.
  2. Secondary information, which is existing data and research that is found in government reports, trade journals, syndicated marketing services, magazines, club and organizational information data bases and, in some cases, your own company records.

Determination of potential market size must be done objectively to be sure the figures are not inflated and overestimated.

 

You can get a rough estimate of the size and buying habits of your potential market by using population, demographics, age, sec, nationality, and business information which you can find in “The Statistical Abstract of the United States”. http://www.ntis.gov/products/statabs.aspx  I recommend this publication highly.  It contains data from the Commerce Department and the Bureau of Census and is available at your Public Library or you may purchase it for about $39.00 from:

The Superintendent of Documents   In either book form or on CD ROM

U.S. Government Printing Office   http://www.gpo.gov/

Washington, D.C.  20401-0001

Phone (202) 512-1800

Using data from this publication you can “quantify” your answers to the questions which follow, in terms of the number of people who would have use for your product, and arrive at a rough estimate of your potential market size.

Here are some other great research resources:

Research Librarians. Almost every city library has a research librarian who will look up information for you, at no charge, on all sorts of subjects, demographics included.  All you need to do is call “information” and ask for the number for the nearest public library, call the library, ask for the research librarian and tell them the type of information you are looking for.  Most of the time these people are extremely helpful and dedicated and can find out more information in a few hours on virtually any topic than you would be able to find in days.

Companies which sell mailing labels compile directories of businesses listed in the yellow pages and compile databases containing incredibly helpful information and demographics numbers for estimating potential market size.  One of these companies that I have used for years is Info USA.  They have compiled information on over 14 million businesses, 3 million brand new businesses, 250 million consumers, 5 million new homeowners, and 13 million executives and professionals.  They have been in business for over thirty years and they publish a great directory which tells you how many of each type of business are located in each state, and gives you the total number of businesses, of that type, in the whole United States.  For example, if your product will be sold in sporting goods stores, you can find out how many sporting goods stores are located in your state, which states have the most stores, which states have the least amount of stores, and the total number of stores in the nation.  Using this FREE directory, you can immediately tell the overall size of your potential retail market, where you should obtain the highest sales figures, where you will have to have the best “reps” and where you will have to spend the most money on advertising and promotion.  To get your copy, contact:

InfoUSA:   http://lp.infousa.com/generic_g?bas_division=028&bas_offer=01H1X&bas_vendor=103812&gclid=CP7w4Yb927MCFUxxQgodDCgA2w

5711 South 86th Circle

P.O. Box 27347

Omaha, NE  68127

Phone  Toll free (800) 242-5478

Or (402) 596-7649

Fax them at (402) 331-1505

Email them at: lists@infoUSA.com

Or visit their website at: http://www.infoUSA.com

Ask for your FREE copy of “Sales Leads, Mailing Lists and Databases Directory”

Magazines give out “reader profiles” and demographics.  Call the magazine you are interested in, tell them you are interested in possibly placing some advertising in their publication and ask them if they would please send you some information and demographics on their readers.

Radio and Television stations give out listener profiles.  Use the same attack as above.

Tabloid type papers sometimes give out demographics of Counties and Cities broken down into delivery zones.  These publications can be especially helpful if you will be testing marketing your product in local areas.  Again, just call them and ask them to please send you the information.

Information services such as DataQuest http://www.dataquestllc.com/services.asp and Experian http://www.experian.com/small-business/services.jsp do fast research and can dig up more than you ever wanted to know about anything in no time.  Fees range from $150.00 minimum up to about $600.00 for a Patent Search.  You can find these types of companies in your local yellow pages under “data searching” or “research companies”.  For those of you who have personal computers, you can sign on with companies which allow you to access their mainframe computers for all kinds of information. “Compuserve” http://netscape.compuserve.com/menu/ is a good example.

Overestimating your potential market will hurt the credibility of your potential sales figures and calculations as well.  Proceed with care.  When you think you have the most accurate numbers available, discount them by 20%.  You’ll always be better off underestimating than overestimating.

For those of you who are planning on Licensing or selling your patents and trademarks outright to a third party or a company, your potential market will be a much smaller one, but your market research will have to be exacting.  This is not an easy or quick process, and it will become frustrating if you attempt to short cut it.

The patent office offers a service for those of you who wish to sell your invention outright or license it to another party or company.  Once your patent issues, they will publish a notice that the invention is available for sale or license, in their OFFICIAL GAZETTE at a cost to you of only a few dollars.  For the address of the patent office see the “protection opportunities” section.

The National Congress of Inventor Organizations, a non-profit resource for inventors, has a great service for inventors wishing to sell their intellectual property.  As long as you belong to an inventor organization which is a member of the N.C.I.O., they will publish your invention for sale to their affiliated business members and through their international commercialization programs.  To find out how you can qualify, write or call:

National congress of Inventor Organizations   http://www.inventionconvention.com/ncio/

P.O. Box 931881

Los Angeles, CA 90093-1881

Ph (323) 878-6952

FAX (213) 947-1079

I know Stephen Gnass personally after speaking along with him at inventor seminars years ago and he is a good guy in my opinion and has helped many inventors over the years.

 




 

  1. No comments yet.
  1. No trackbacks yet.
You must be logged in to post a comment.