Available Market - Definition & Importance
What is 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 available market also includes the access to markets for these buyers. This metric is used to measure the potential of a market.
Importance of Available 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.
The below flow illustrates the complete market definition.
Total Market -> Potential Market -> Available Market -> Qualified Available Market -> Target Market -> Penetrated Market
This does not necessarily mean that the company will decide to target all of the available market. After determining the potential customers, the companies also look for Qualified Available market which has one more constraint that whether the people in the market are legally allowed to buy the product or not. For example a liquor manufacturing company not only looks for the market but also the qualified available market. The people available 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 customers.
Hence, this concludes the definition of Available Market along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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