Market Potential Indicator
Market Potential Indicator
Several indicators are used in developing this Market Potential index. According to Global Edge, these indicators are market size, market intensity, growth rate, consumption capacity, commercial infrastructure, receptivity, economic freedom and country risk (Market Potential Index, 2014). Measures used to calculate market size is urban population and electricity consumption. GNI per capita and private consumption as a percentage of GDP were the measures used to calculate market intensity (Market Potential Index, 2014). Market growth rate is measures by the average annual growth rate of primary energy use and by real GDP growth rate (Market Potential Index, 2014). Consumer expenditure and income sharing of middle class were used for market consumption capacity (Market Potential Index, 2014). To calculate commercial infrastructure, measures such as Cellular Mobile Subscribers, households with Internet Access, main telephone lines, Number of PC 's, paved Road Density, population per retail outlet and percentage of households with Color TV were used (Market Potential Index, 2014). Market receptivity was calculated by per capita imports from US and trade as a Percentage of GDP (Market Potential Index, 2014). Economic freedom was calculated by the Economic Freedom Index and Political Freedom Index while country risk was calculated by Business Risk Rating, Country Risk Rating and Political Risk Rating (Market Potential Index, 2014).
Market size, growth rate, consumption capacity and country risk would have a greater impact for a company that markets laptop computers. Market size is important to companies because it provides an idea on the amount of buyers interested in a certain product (Market Analysis, 2010). Growth rate will help the company forecast market growth rate (Market Analysis, 2010). When it comes to consumption capacity, the company should also be interested in the income share of the middle class. Many regions now have a growing
Several indicators are used in developing this Market Potential index. According to Global Edge, these indicators are market size, market intensity, growth rate, consumption capacity, commercial infrastructure, receptivity, economic freedom and country risk (Market Potential Index, 2014). Measures used to calculate market size is urban population and electricity consumption. GNI per capita and private consumption as a percentage of GDP were the measures used to calculate market intensity (Market Potential Index, 2014). Market growth rate is measures by the average annual growth rate of primary energy use and by real GDP growth rate (Market Potential Index, 2014). Consumer expenditure and income sharing of middle class were used for market consumption capacity (Market Potential Index, 2014). To calculate commercial infrastructure, measures such as Cellular Mobile Subscribers, households with Internet Access, main telephone lines, Number of PC 's, paved Road Density, population per retail outlet and percentage of households with Color TV were used (Market Potential Index, 2014). Market receptivity was calculated by per capita imports from US and trade as a Percentage of GDP (Market Potential Index, 2014). Economic freedom was calculated by the Economic Freedom Index and Political Freedom Index while country risk was calculated by Business Risk Rating, Country Risk Rating and Political Risk Rating (Market Potential Index, 2014).
Market size, growth rate, consumption capacity and country risk would have a greater impact for a company that markets laptop computers. Market size is important to companies because it provides an idea on the amount of buyers interested in a certain product (Market Analysis, 2010). Growth rate will help the company forecast market growth rate (Market Analysis, 2010). When it comes to consumption capacity, the company should also be interested in the income share of the middle class. Many regions now have a growing
References: Market Analysis. (2010). Retrieved from http://www.netmba.com/marketing/market/analysis/ Market Potential Index (MPI) - 2014 >> globalEDGE: Your source for Global Business Knowledge. (2014, May 1). Retrieved from http://globaledge.msu.edu/mpi