Why is it important for marketers to estimate sales potential for the entire industry as well as for the individual company?

Question

What will be an ideal response?

Answer 1

The competitive level specifies whether sales are being estimated for a single firm or for an entire industry. Market potential is the total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity. A segment's market potential is affected by economic, sociocultural, and other environmental forces. The specific level of marketing effort will vary from one firm to another, and each firm's marketing activities together add up to the industry-wide marketing effort total. A marketing manager must also estimate whether and to what extent industry marketing efforts will change over time. Company sales potential is the maximum percentage share of a market that an individual firm within an industry can expect to capture for a specific product. Several factors influence company sales potential for a market segment. First, the market potential places absolute limits on the size of the company's sales potential-a firm cannot exceed the market potential. Second, the magnitude of industry-wide marketing activities has an indirect but definite impact on the company's sales potential. Third, the intensity and effectiveness of a company's marketing activities relative to competitors' activities affect the size of the company's sales potential.