Market Density

Posted in Marketing and Strategy Terms, Total Reads: 1505
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Definition: Market Density

Market density refers to the number of potential customers of a product or a service per unit area generally per square km or per square mile. The market density multiplied by the total area gives the total number of potential customers in that particular area.


Marketers often use the market density in order to calculate the potential customers for a new product launch which will help them understand the coverage of the new product


Examples

A market density of 100 for an ABC product in a city XYZ refers that on an average there are 100 potential customers for the product in the region per square kilometer. If the total area of XYZ is 4 square km, then the total number of customers will be 400.

 

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