Posted in Marketing and Strategy Terms, Total Reads: 1895
Definition: Available Market
Available market is defined as the number of people who are both willing and capable of buying a particular product or service in a particular market. In some cases it also includes the access to markets for these buyers. This metric is used to measure the potential of a market.
The companies use this metric to concentrate their marketing and advertising in these areas. They also determine the places for putting up advertisements and the retail shops where they will stock their product so as attract these potential customers.
Companies also use this metric to calculate the effect on the potential market with the increase or decrease in price as the size of the available market will be affected accordingly. If the price is decreased then some portion of the market which was earlier willing but not capable to buy the product will now be qualified as available.
This does not necessarily mean that the company will decide to target all of the available market. After determining the available market the companies also look for Qualified Available market which has one more constraint that whether the people in the available market are legally allowed to buy the product or not. For example a liquor manufacturing company not only looks for available market but also the qualified available market. The people in the available market may well be willing and capable to pay for the liquor but if their age is not legal to buy liquor then the companies don’t count them as qualified available market.
The below flow illustrates the complete market definition.
Total Market -> Potential Market -> Available Market -> Qualified Available Market -> Target Market -> Penetrated Market