Is the Market fished out? Discover the Real Market Potential
22. January 2019
When you come to the pond, it is hard to see how many fishermen were here before you, and how many fish are still hiding under the surface. Fortunately, it is different for business. Show us your data and we will tell you how large your market share and potential is.
If creating a business plan was an elementary school subject, you would study market potential in the first grade. It indicates the number of (potential) customers for your product. To identify it you need to know your target audience and average turnover, that they will bring to your company account.
Simply put - the market potential will reveal what profit can be achieved in the area. Similar to coming to a pond and know upfront that there are 5 carps and 1 perch waiting for you.
We can calculate how many customers are waiting for you
The most important for CleverAnalytics are catchment areas. We can model a wide range of them, e.g. based on walking distance or according to traffic flows. Still we prefer the real ones based on data from loyalty programs. In all catchment areas we can accurately calculate the number of people, cars and properties. In addition, it can all be divided into specific groups, according to age or size and others.
Thanks to that you know exactly how to determine your turnover, which brings us to the second important concept. Market share (we prefer the term 'fished out') is the percentage of customers who you already won over. Now you can easily see if you caught all the fish in the business pond or you need to use a better bait.
Let’s see how’s your competition doing
You are rarely alone at the pond. In CleverAnalytics we can accurately model the market shares of your competitors, put them together according to regions, and find out immediately if you have the chance to grow or it is already fished out.
Metrics for market shares varies from region to region and depend for example on the availability of service or point of sale. The differences can be found even between market potential and market share.
Stepping potential vs. Dynamic market share
CleverAnalytics can very accurately measure changes in the potential of the area and market share. Potential of the area mostly develops slowly, but the number of areas with rapid changes is on the rise.
The best example are the development projects, that are built from scratch. In previously uninhabited areas there will suddenly be so many representatives of the target group that it is worth to build business there.
Market share is, by contrast, very dynamic. Distribution of the market will immediately change just by opening or closing of the branch by competitor. Same effect might have redesign of the shop or new retail concept.
What happens if…
…a competitor is planning to open a branch in your catchment area? In this case our studies will be very helpful. Thanks to them you will get real data-based estimate on how will this step from competitor affect your sales. You can prepare for any changes and react accordingly.