When it comes to marketing every marketer looks to capture as much market share as it is possible because larger the market share higher will be the sales and that higher sales will translate into higher profits for the company. Marketing has many technical terms, potential and available market are two such terms which are used interchangeably and many people gets confused between the two terms and think that they are same but in marketing, they both have the different meaning.
Potential Market Meaning
Potential market refers to that part of the population which wants to purchase or consume the products of the company. So, for example, the majority of youngsters all over the world wants to purchase the iPhone produced by the Apple Company and therefore they all fall under the potential market bracket for the Apple Company as they all are willing to purchase the iPhone.
Available Market Meaning
Available market refers to that part of the population from potential market that has the money or funds to buy the products of the company. So in the above example, only 5 to 10 percent of those youngsters who want to buy the iPhone have the money or are in the position to actually go out and purchase the iPhone produced by the Apple Company from the market.
As one can see from the above that potential market and available market are miles apart from each other because if company manufactures products according to potential market then it will be in the loss as potential market can be huge but available market is very less and hence the company should make products keeping in mind the available market and not potential market.
However, a company can turn the potential market into the available market by either reducing the price of the product or by introducing new features at the same price which will induce buyers in the potential market bracket to buy company’s products. Higher the conversion of buyers from the potential market into the available market the better it is for the company because higher conversion will lead to higher sales which subsequently implies more profits for the company. In simple words, the available market will always be shorter than the potential market for any product produced by any company anywhere in the world.