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Definition

Company sales potential

Definition (1):

Company sales potential is the sales limit approached by company demand as marketing effort increases relative to that of competitors. The absolute limit of company demand is, of course, the market potential. The two would be equal if the company got 100 percent of the market. In most cases, company sales potential is less than the market potential, even when company marketing expenditures increase considerably. Each competitor has a hardcore of loyal buyers unresponsive to other companies’ efforts to woo them.

Definition (2):

Company sales potential is the market potential’s maximum percentage that a company within a specific industry is able to expect to attain for a particular product.

The marketing manager of a company needs to do more than only forecasting the sales of the company. The process of a sales forecast is complex because the quantity the company is able to sell will rely on several factors like the cost of the product, the competitors’ reaction, and so on. S/he has to take into account every factor to estimate the quantity the company is able to sell. The sales forecast changes with the change of these factors. The initial common step in this process is to estimate the market potential. Once the marketing manager determines the market potential, s/he can estimate the company sales potential.

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