Market potential- the forecast set of production and consumer forces that determine supply and demand. In other words, it is a quantitative measure that characterizes the absolute or relative number of units of products that can be put on the market or purchased (consumed) by one or another market segment over a certain period of time.
In general terms, the market potential is formalized as follows:
where Wi - power indicators (production or consumer);
E - elasticity of supply or demand;
Fj - other factors and elements of potential;
n is the number of potential units
m is the number of other factors.
Market potential can be production or consumer.
Production potential- the ability to produce and present to the market a certain amount of goods for a certain period of time.
Consumer potential- the ability of the market to buy a certain volume of goods for a certain period of time.
Assessment of production potential
,
where Wi is the production capacity of the i-enterprise;
Z i - the degree of utilization of the production capacity of the i-enterprise (in percent);
Ri - the degree of endowment with the resources necessary for the implementation of the production program of the i-enterprise (in percentage);
[T pr.price * E] - correction for the change in wholesale prices, where Tpr.cen is the rate of price increase, and Er is the coefficient of elasticity of supply from prices for raw materials and finished goods;
Bi - domestic production consumption of the i-enterprise;
Сj - products that competitors (importers, potential competitors) will produce according to estimates;
n is the number of potential units (of the considered industrial enterprises operating in the studied market);
m is the number of competitors.
Without the element Cj, if we assume that the considered enterprises belong to one firm, the formula will reflect the production potential of this firm. The last element in the formula includes potential competitors, the appearance of which is predicted with a certain probability on the market over the period under consideration, as well as substitute products.
The production potential is expressed in monetary or natural units, depending on the units of measurement of the production capacity of the enterprise.
Consumer potential assessment
Consumer potential is determined market capacity .
Market volume- the number of goods that can be sold on the market under given conditions for a certain period of time (usually a year).
The capacity of the consumer market can be expressed by the following formula:
where Si is the number of consumers in the ith group ;;
k i is the consumption standard of the i-group of consumers (technological standards - for means of production; physiological - for food, rational - for non-food products);
Ed is the price elasticity of demand, adjusted for the expected price change during the period under consideration (in percent);
Зi - the volume of the normal insurance reserve of goods for the i-group of consumers;
H is the saturation of the market, i.e. the volume of goods available in consumer organizations and end consumers (in percent);
If - physical wear and tear of goods (percentage);
Immoral wear and tear of goods (percentage);
A- forms of satisfaction of needs alternative to the market, incl. substitute goods.
n is the number of consumer groups operating in the market under consideration.
The market saturation indicator also plays an independent role in market analysis, since it has a strong influence on the cyclical functioning of the market, limiting demand.
Market saturation - the degree to which consumers are provided with goods. The value of the indicator is determined either by expert advice or as a result of a field marketing research. For durable goods, the market saturation at the end of the period is determined by the balance method, but this method assumes knowledge of the degree of market saturation for the previous period and at the beginning of the current period, and estimates the projected income for the period and projected disposal for the period.
The ratio of production and consumer potentials makes it possible to assess the total potential of the market.
If the production potential is larger than the consumer potential (market capacity), then in this market there is an excess of supply over demand, i.e. the market is oversaturated and the conjuncture for new market entities is not favorable. If the production potential is less in size than the market capacity, then the market situation is favorable for its subjects.
Note: when determining the market potential, if the formula contains the element "alternative forms of meeting needs" when assessing the consumer potential, then it is advisable to exclude this element (competition) when assessing the production potential. Conversely, if this element is present in the formula for production potential, then it should be excluded from the formula for consumer potential.
This or that state of the market to a certain extent depends on its potential. Product supply and demand are forms of market potential functioning.
Market potential- This is a forecast set of production and consumer forces that determine supply and demand.
Production potential acts in the form of an opportunity to produce and present to the market a certain amount of goods (products and services). Opposed to him consumer potential, which manifests itself in the form of the market's ability to absorb (i.e. buy) a certain number of products and services. Assessment and analysis of production
military potential are included in the range of the buyer's marketing interests, and consumer potential is of interest to the seller.
The result of realizing the potential of the market for goods and services is the satisfaction of consumer demand, the involvement of the mass of goods and services in the sphere of circulation and their subsequent transition to the sphere of consumption.
The purpose of assessing market potential is to characterize market opportunities both at the macro level and at the micro level of individual firms. To analyze its own capabilities, each firm needs an assessment of the overall market potential in order to reasonably decide the issue of targeting a particular segment.
Micropotential of the firm(production and trade) is its production or trade capacity, the maximum possible volume of production, sales or turnover.
The microcapacity of a research firm is defined as the sum of the capacities of the totality of its enterprises. The firm's consumer micropotential is limited to the market segment it is targeting. Its volume is determined on the basis of specific relevant consumer groups.
The basic scheme for calculating the potential of the market for goods and services is reduced to the following actions: the number of production and consumer units is determined, the indicators of specific capacity (purchasing power) are calculated, respectively, of production and consumption. The formula introduces indicators of elasticity of supply and demand. It is possible to single out the market share, which, according to estimates, will go to competitors, indicators can be introduced that limit or, conversely, expand the volume of production and consumption.
In general terms, the market potential formula is as follows:
P = Σ (N i Wi E x) + F j, (1)
where N i- units of production or consumption;
W i- indicators of the capacity of units (production or consumer);
Eh- elasticity of demand or supply;
F j- other factors and elements of potential;
The consumer potential is characterized by the market capacity. This indicator is close to the volume of demand, but not completely identical to it.
Index market saturation also plays an independent role in market analysis, since it has a strong influence on the cyclical nature of the market, limiting demand.
Market saturation- This is the degree of provision of consumers with goods, determined either by an expert method, or on the basis of a sample study of households.
For durable goods, the balance sheet method is used:
Нк = Нн + П-В, (2)
where Nk- availability of goods at the end of the period;
Market scale is determined by the volume of sales of goods, as well as the number and size of firms that act on the market as sellers, both producers who bring their goods to the market, and resellers. At the same time, the functional specialization of enterprises is characterized: the type of product, its assortment, and the main properties.
Sales volume is determined by the following indicators:
The size of sales of manufactured products;
Wholesale turnover performing intermediary functions;
Retail trade.
The role of each firm in the process of selling products is characterized by the indicator of their market share. Market share of the company is defined as the ratio of the firm's turnover to the total volume of sales in the market.
Along with the quantitative measurement of the share, its qualitative characteristics (large share, average, small, etc.) can be obtained. It is based on a comparison of the share owned by a given firm and the share owned by the largest competitors. Conjunctural assessment of the market determines the operational product policy of the company. If the situation is favorable, the company carries out an attack strategy, invests in expanding the range of products and increases its output. The unfavorable environment forces the firm to use defensive tactics of saving resources and waiting, and sometimes even leaving the given market.
The conjunctural assessment of the scale of the market is manifested in the characteristic market potential. Market potential shows how many goods, under certain conditions, can be offered to the market, how many goods the market can absorb. Market potential is subdivided into industrial(product offer) and consumer(market volume).
The production potential of the market characterizes the marginal possibilities of the product offer. The production potential of the market is characterized by the volume and structure of production of goods, as well as import capabilities.
A key market problem is the estimation of the potential quantity of goods that the market can absorb. The question is, how many products can and do manufacturers and resellers want? The health of the market economy ultimately depends on this, whether the sale and purchase of goods is balanced. In other words, it is necessary to determine purchasing potential. Market potential calculation is necessary to develop strategic and operational marketing plans. It is an integral part of assessing market conditions. The purchasing potential of the market is determined by consumer demand and is characterized by the indicator market capacity. Market volume
characterized by the amount of goods that the market in specific conditions plans and is actually able to absorb (buy) for a certain period of time.
The calculation of market capacity is based on the consumer principle: the number of consumers is determined and the average level of consumption is predicted.
The indicator plays a significant role in the analysis of the market situation and modeling the market capacity saturation of the market.
It can be considered as an indicator of the provision of the population with consumer goods. Market saturation limits its capacity. Market saturation
- availability on sale of goods in sufficient demand.
The term market potential is understood as the ability of an economic entity to have a decisive influence on the general conditions for the circulation of goods in the relevant product market and (or) hinder market access for other business entities, and is not directly related to the share of an economic entity in the product market. The market potential of an economic entity may be associated with the presence of its dominant position in the market. However, in certain product markets, situations arise when an economic entity with a market share of less than 35% has a market potential in relation to other economic entities in the same product market.
Market potential analysis involves:
Measuring market potential;
Determination of directions for using market potential, including at the expense of competition.
When measuring market potential, three different approaches can be applied:
Structural - analysis of the position of an economic entity in the product market;
Assessment of the degree of efficiency of the business entity;
Analysis of the dependence of the performance indicators of an economic entity on the performance indicators of competitors.
The structured approach basically involves counting the number of sellers in a given product market and comparing the shares held by each market participant.
The shares occupied by each market participant are used as indicators of market potential: the larger the share, the greater the market potential.
However, the correct application of the structural criterion requires careful weighing of the various market conditions:
· Taking into account the possibility and likelihood of other sellers entering the market;
· The availability of second-hand goods and other acceptable (but not equivalent) replacement goods on sale, as well as other factors indicating whether a given seller can raise prices and reduce output.
In addition to the structural approach, when measuring market potential, it is recommended to use an analysis of the performance of economic entities. This approach determines:
Deviations of performance indicators of economic entities (profit, profitability) from their average industry values, as well as factors that caused the deviations;
The effectiveness of the activities of economic entities in the commodity market can testify to the market potential only under the condition of long-term preservation of the maximum sizes of performance indicators (at least 1 year).
To measure market potential, you can use the analysis of the dependence of the performance indicators of an economic entity on the performance of competitors:
Calculations of the price elasticity of demand: the greater the inelasticity of demand for the products of a given seller, the greater his potential in the market;
Observations of the behavior of the seller of goods during pricing:
whether prices are set above the competitive level and how long they manage to be maintained at this level. In practice, the method of calculating the residual demand can also be used: after calculating the size of customer demand and supply from competitors in the analyzed period of time, the supplier's ability to increase prices as a result of reduced output is determined.
An integral indicator of the market potential of an economic entity operating on a commodity market is the price it sets, which exceeds the level of competitive prices in this commodity market, including a monopoly high price.
Along with the above, evidence of the presence of market potential may be (especially if several such factors are present at the same time):
· Constant profit making above normal in the given industry;
· A decrease in the level of production, combined with an increase in prices, which occurs in the absence of losses;
· Evidence of ongoing price discrimination, that is, setting different prices for different groups of buyers or in different geographic regions, which is not justified by the difference in costs;
· Excess of the actual costs of the level achievable with the most effective growth in the scale of production;
· The level of trade costs exceeding the economically justified;
· The level of technological progress, significantly outstripping the industry average;
· Conditions for the use of industrial property rights (patents, licenses, trademarks, etc.);
· The presence of agreements between competitors for the supply of necessary goods, services, rights to use patents, intellectual property;
· The emergence in the structure of costs of such items of expense as, for example, payment for services for the creation of organized support for the interests of an economic entity in the executive and legislative authorities, excessive representation costs.
Summary
1. In today's conditions of fierce competition, in almost all markets, sales issues come first, and production tasks take a subordinate position.
2. For a generalized description of the volume of production and sales of products, cost and conditional physical indicators are used.
3. Gross output is the value of all products manufactured and work performed, including work in progress. It is usually expressed in comparable prices.
4. Marketable products differ from gross products in that they do not include the remainders of work in progress and on-farm turnover. Proceeding from the volume of marketable products, labor productivity, capital productivity, capital intensity of production are determined.
5. Sold products - paid, and accountants have a choice - to consider the sale of products by shipment (at the time of transfer of ownership to the buyer) or by payment (at the time of receipt of funds in payment for goods to the current account or to the cash desk of the enterprise).
6. The system of indicators characterizing the volume of production includes, in addition to the volume of marketable output in comparable prices, capital productivity, as well as output per 1 ruble of the cost of objects of labor. The task of analyzing production and sales of products is also to determine how the key indicator - the volume of commercial products (sales proceeds) - depends on one parameter or another and to make an appropriate management decision in order to increase production efficiency.
7. Output can be defined as dependence on three factors: the provision of the enterprise with workers, capital-labor ratio and capital productivity of fixed assets.
8. In conditions of inflation, the growth of nominal monetary values of the volume of production and sales does not provide complete information about the actual state of affairs. Additional analysis required:
a) comparison of the volume index with the inflation index;
b) comparison of output with production capacity;
c) correlation of the volume of production and stocks of working capital;
d) an assessment of the ratio of the volumes of gross, marketable and sold products.
9. Rhythm - uniform release of products in accordance with the schedule in the volume and range provided by the plan. The rhythm indicator complements the characteristics of the size and capacity of the enterprise.
10. Expansion of the range of manufactured products is the most reliable means of gaining competitive advantages for an enterprise.
11. Indicators of the quality of a product characterize one of its properties: utility; reliability; the effectiveness of design and technological solutions implemented in this type of product; aesthetic and ergonomic qualities, safety and other properties. Each property is rated in points. The GPA is a generalized indicator of quality.
12. The market in economic theory is understood as a mechanism that ensures the interaction of sellers and buyers of goods. The typology of markets can be determined, in addition to the interchangeability of goods, also by the interdependence of enterprises and the conditions for entering the market. The industry is a more complex model, but also closer to the realities of financial and economic activities. Parameters defining the industry within the framework of the "Structure - Behavior - Result" concept: the number of sellers and buyers, the height of entry-exit barriers, product differentiation, elasticity of demand (direct, cross) (this limits the market model), technology, product differentiation, vertical integration, diversification of production.
13. You can point to two main possible types of enterprise behavior: passive and active. Such behavior is called strategic when the firm reacts to changes in the external environment. In a market of perfect competition, there is no change. Price is an external parameter for the enterprise. The equilibrium market price is the market price for a given product that appears in most sales and purchases.
14. In the market of monopolistic competition, a decrease in sales proceeds may be the result of a drop in demand for a given type of product, or an excessive increase in the number of products offered for sale.
15. In the oligopoly market, firms can choose output volumes by interacting according to Cournot or Stackelberg. However, the collusion option is preferable for the follower, and it will be beneficial for him to persuade the leader to compromise. If firms with the same unit costs of output try to compete in the oligopoly market by choosing price rather than output, then they will face the Bertrand paradox. It states that the firm, by setting the price above the marginal costs of production and sale, attracts new competitors to the market. Its bargaining power tends to zero as a result.
16. The monopolist can choose such a price so that the marginal revenue is equal to the marginal costs of production and sale. In addition, a monopolist can sell its products to different buyers at different prices, pursuing a policy of price discrimination.
Literature
1. Pyastolov SM Economic analysis of the activity of enterprises. Textbook for students of economic specialties of higher educational institutions, economists and teachers. - M .: Academic project, 2002 .-- 573 p. Chapter 6.
1 Drucker P. New realities. - M: Book Chamber International. 1994. p. 331.
For these data, see the reporting - a) “Sales proceeds” (line 010 of Form No. 2 of the financial statements); or b) "Cost of sales" (line 010 of form No. 2 of the financial statements).
It should be noted that such conclusions need to be accompanied by additional analysis. Sometimes enterprises in a difficult financial position deliberately delay part of the costs on account 20 (they do not write off them to account 43). This is done to improve financial performance.
See "On a unified system of expert assessment of the quantity and quality of exported goods", as revised by Resolutions of the Government of the Russian Federation of 02.07.99 No. 738.
Lancaster K.J. A New Approach to Demand Theory // Journal of Political Economy. 1966, 74, p. 132-157. For details see: Hay D., Morris D. Industrial organization theory,(translated from English). In 2 volumes. - SPb .: ESh, SPbGUEiF, HSE, 1999.
The cross-price elasticity of demand is calculated using the formula: Е i, j =(dQ i / Q i) :( dP j / P j), where About i. - quantity of goods i; P j- product price j.
This condition was first proposed by J. Robinson in 1933. See: J. Robinson. The economic theory of imperfect competition.- M., 1986 /
True, the Russian Antimonopoly Committee makes a reservation: “In conditions of imbalance between supply and demand in the market, calculations of cross-elasticity coefficients in some cases may lead to distorted results” and recommends resorting “to more accessible and less labor-intensive methods for assessing the interchangeability of goods - expert assessments, interviews with consumers and specialists of a particular industry. The choice depends on the specific situation on the market and the degree of awareness of the specialists conducting the analysis. " This is recorded in the Methodological Recommendations for Determining the Boundaries and Volumes of Commodity Markets (Appendix No. 1 to the Order of the State Committee of the Russian Federation for Antimonopoly Policy and Support of New Economic Structures No. 112 dated October 26, 1993).
Chamberlin E.H. The Theory of Monopolistic Competition. Harvard University Press, 1933. This book, along with the work of J. Robinson, laid the foundation for the development of the theory of monopolistic competition.
Bain J.S. Barriers to new Competition. Harvard University Press, 1956.
In the basic course of economic theory, there is another classification of markets - according to the number of buyers and sellers.
A. Labor motivation and norms of labor interactions in enterprises with various forms of ownership. On Sat. Nureyev P.M. (ed.) Economic subjects of post-Soviet Russia (institutional analysis).- M .: Moscow Public Science Foundation, 2001.
Espahbodi, Reza; John, Teresa A: Vasudevan, Gopala. The Effects of Downsizing on Operating Performance. Review of Quantitative Finance & Accounting. Vol. 15 (2). P. 107-26. September, 2000
See Methods for determining monopoly high (low) prices and monopoly profits. - M .: Bureau of Economic Analysis. 2001.S. 24-25.
Frazer T. Monopoly, Competition and Law. St. Martin's Press. 1988. P. 37.
From lat. Absent-minded.
In the sense that they can be described using game theory
Derivation of formulas can be found in the textbook by Varian Hal R. Microeconomics, intermediate level, modern approach.- M .: UNITI, 1997, p. 501-524.
Approved by the Order of the MAP of Russia (Ministry of the Russian Federation for Antimonopoly Policy and Support of Entrepreneurship) dated 20.12.96 No. 169 (as amended by Order of the MAP RF dated 11.03.99 No. 71. Registered with the Ministry of Justice of the Russian Federation on January 10, 1997, No. 1229) - a summary ...
In a situation where the alleged violation of antimonopoly legislation is considered in relation to the buyer of the product (monopsony, as a special case), the opinion of the seller is decisive in the issue of product interchangeability.
If an economic entity produces this product and uses part of its products for the needs of its own production, then only that part that is sold by it on the market should be included in the total sales volume.
If there are unified structures in the market, it is possible to allocate a share of vertically (horizontally) combined structures in the total volume of supplies to the market.
The consumer potential is characterized by the market capacity.
Market volume- This is the amount (value) of goods that can be absorbed by the market under certain conditions for a certain period of time. As a rule, market capacity is determined in the context of specific goods and services.
Market capacity can be expressed by the formula
- market volume;
- number i th consumer group;
- the level (coefficient) of consumption in the base period or the standard of consumption (physiological or technological);
- coefficient of elasticity of demand on prices and incomes;
- the volume of the normal insurance reserve of goods;
- market saturation;
- physical wear and tear of goods;
- obsolescence of goods;
- alternative forms of satisfaction of needs (household, black market, substitute goods);
- the share of competitors.
Market saturation- This is the degree of provision of consumers with goods. For durable goods, the formula is used
,
- availability of goods at the end of the period;
- availability at the beginning of the period;
- purchase for the period;
B - retirement for the period (based on the average duration of the product's service).
Competition analysis
Competition analysis is carried out in the following stages:
1. Definition of competitors. It is necessary to give a list of all real and potential competitors of the firm.
2. Collection of information about a competitor.
Market Potential - Glossary of Financial and Legal Terms
To organize the collected data, you can use the following questionnaire.
Competitor Information Form
1) General data:
1) the name of the company;
2) form of ownership;
3) the location of the enterprise and its branches;
4) the organizational form of the enterprise.
1) the number of employees;
2) the professional level of employees;
3) the reputation of the company as an employer;
4) Full name and the positions of the most important employees of the enterprise.
1) geographic region of service;
2) the market for which the products of the enterprise are designed;
3) the market share occupied by a specific market;
4) the main market segments and their characteristics;
5) the most important clients of the firm;
6) prioritizing the market;
7) strategies used when working on the market;
8) methods of penetrating new market segments;
9) ways of introducing new products and services to the market.
4) Financial results:
1) solvency and financial stability;
2) income for the previous period of time;
3) recent trends in financial activity;
4) general financial situation;
5) sources of investment;
6) the ratio of own and borrowed funds;
7) investment efficiency.
5) Commodity policy:
1) the range of goods and services;
2) the quality of goods and services;
3) accepted pricing methods;
4) engineering and design potential of the company;
5) the main trends in the field of creating new products;
6) the effectiveness of the competitor's actions in the field of extending the life cycle of goods and services.
6) Organization of commodity circulation:
1) strategy in the field of sales of products and services;
2) main distribution channels;
3) forms and methods of marketing used by a competitor;
4) the organization of the sales service;
5) the qualifications of the company's sales staff;
6) methods of control over sales channels.
7) Organization of promotion:
1) the main strategy for promoting the enterprise;
3) sales promotion activities;
4) the main instruments of propaganda;
5) promotion costs;
6) methods of calculating the budget for the organization of promotion.
8) Marketing Management:
1) the structure of marketing management of the enterprise;
2) Full name heads of the company and the main divisions of the marketing service;
3) the qualifications of the company's management;
4) the system of motivating employees of the company;
5) entrepreneurial culture of the company;
6) the reputation of the company in the business community.
This questionnaire can be changed depending on the specific characteristics of the enterprise, market, manufactured goods and services. Answers to the questionnaire can contain both short numerical and detailed and detailed notes.
Read also:
Potential market- a group of consumers with purchasing power and showing an interest in a particular type of product or service.
Types of market demand and its definition
When starting your own business, you need to understand which group of people or enterprises will have the most demand for products.
Based on the end user, the potential market can be industrial or civil. The industrial market will be the main audience if the manufactured products are not final and are used as raw materials. If the product or service is an end product, then the potential market will consist of the intended consumers of the end result.
Identifying a potential segment
A detailed market analysis will help you identify a potential segment. First of all, it is necessary to assess the expected scale of future economic activities. The breadth of the market can be on the scale of a country, a particular region, a specific industry (for example, the supply of raw materials for the pharmaceutical industry) or a specific group of consumers.
After determining the scope of the business, the segment itself is analyzed. This is done by evaluating the following criteria:
- Demographic - age group, gender, education level, ethnicity. This group of characteristics can be used to determine the preferences of the potential market regarding product design, service level and other criteria;
- Production - the frequency of delivery, based on the expected demand, dosage volume, delivery methods, type of packaging, etc.;
- Geographic - climatic conditions of residence of the target audience, population density in the selected segment, ecological features, type of territory.
With the correct identification of the potential market, it is possible to analyze the expected demand for a product or service, as well as assess needs. Identifying a potential market will also provide the following data:
- Market capacity, which determines the scale of the consumer group and the required capacity to carry out production;
- Sales channels of final products, which will allow to form the future distribution network of goods;
- Stability of a potential segment - will allow you to analyze the feasibility of large-scale production and evaluate the effectiveness of the selected type of activity;
- The size of the estimated profit, which allows you to calculate the profitability of the organization's economic activity in the selected potential segment;
- Competitors, the data about which will allow you to understand their strengths and weaknesses and decide on a strategy line and create a distinctive product.
Assessing the profitability of a potential market
To attract investors, as well as to assess the profitability of the selected type of activity, the potential market is assessed in the following ways:
- A superficial assessment of the potential market. Analysis in this way is subjective and cannot guarantee that the figures obtained in superficial calculations will correspond to reality. The profitability in this case is hypothetical. As a rule, data from third-party agencies are used for this;
- Internal assessment. The results of this analysis are more substantiated, as they are based on the potential of the company. To calculate the profitability of a potential market, the number of orders attracted by one employee, the cost of attracting one client and other data can be used;
- Comparative evaluation. The method is based on the analysis of data from similar competing companies. However, the information is not always up to date. Companies operating in a potential segment, as a rule, do not disseminate information regarding their reporting;
- Valuation based on potential market growth. Data for analysis can be obtained in analytical reviews and forecasts. Based on the level of growth, a development strategy is created to maximize profits.
It is more expedient to analyze the potential market in all possible ways. After receiving the data, their average value is displayed. Only after this is it possible to determine how efficient the potential market will be and how profitable the production will be.
E.A. Nemkina
Growth potential of the Russian agricultural market
Recently, one can observe an active growth of the agricultural sector of the Russian economy. So, if we turn to statistical data, we can see that in recent years, despite the negative impact of global economic trends, the agrarian segment of the Russian economy continued to develop dynamically.
So, for example, if we refer to Fig. 1 and 2, it can be noted that, despite the crisis in the country's economy, analysts predict a steady growth in the agricultural segment of the Russian economy, both in monetary and physical terms. It is assumed that by 2012 the volume of the agricultural market should increase by 38.6% in monetary terms and 14.4% in commodity terms compared to the indicators of 2007, selected as the point of the report. All this testifies to the positive dynamics of the development of agriculture in the country, as well as to the existence of a “margin of safety” in the analyzed market as a factor in counteracting the crisis phenomena in the world economy.
Rice. 1 The volume of the Russian agricultural market in monetary terms
This or that state of the market to a certain extent depends on its potential. Product supply and demand are forms of market potential functioning. Market potential is a predictive aggregate of production and consumer forces that determine supply and demand. The production potential appears in the form of the ability to produce and present to the market a certain amount of goods (products and services). It is opposed by consumer potential, which manifests itself in the form of the market's ability to absorb (i.e. buy) a certain amount of products and services. Naturally, the assessment and analysis of production potential are included in the marketing interests of the buyer, and the assessment and analysis of consumer potential are primarily of interest to the seller. The result of realizing the potential of the market for goods and services is the satisfaction of consumer demand, the involvement of the mass of goods and services in the sphere of circulation and their subsequent transition to the sphere of consumption.
The scheme for calculating the potential of the market for goods and services is reduced to the following actions: the number of production and consumer units is determined, indicators of specific capacity (purchasing power) are calculated, respectively, of production and consumption. The formula introduces indicators of the elasticity of supply and demand from prices, incomes and other market factors. You can also highlight the market share that, according to estimates, will go to competitors (this amendment is designed to assess the potential at the micro level of a particular firm). The formula can also be entered by indicators that limit or, conversely, expand the volume of production and consumption.
In general terms, the market potential formula is as follows:
P = Y (Ni Wi Ex) + Fj, where
Ni -units of production or consumption;
Wi - indicators of the capacity of units (production or consumer);
Eh - elasticity of supply or demand;
Fj-other factors and elements of potential;
n is the number of potential units.
Determining the consumer potential of the market is an important link in the system of studying consumer demand. The consumer potential is characterized by the market capacity. This indicator is close to the volume of demand, but not entirely identical to it. Market capacity - the amount (value) of goods that can be absorbed by the market under certain conditions over a certain period of time. Sometimes this indicator is determined, like demand, using a multivariate forecasting model of demand. This calculation is probabilistic, often multivariate. Another method for calculating market capacity is building a multiplicative-additive model based on normative and expert indicators. It can be considered universal and used both for the consumer market for means of production and for the consumer market for consumer goods and services. Market capacity is determined in the context of individual local markets for specific goods and services (often regional). Market capacity can be expressed by the formula:
E = U (Ni k Ex) + P- (N-If-Im) - A - C, where
E - market capacity (quantity or cost of products and services that can be purchased in a certain period);
Ni is the number of the i-th consumer group;
k-level (coefficient) of consumption in the base period, or the standard of consumption of the i-th group of consumers (standards: technological - for means of production, physiological - for food, rational - for non-food products and services);
Eh - coefficients of elasticity of demand on prices and incomes;
P is the volume of the normal insurance reserve of goods;
H-saturation of the market - the volume of goods available to the household of the population, or means of production at enterprises at a given point in time or for its segment;
If - physical wear and tear of goods;
They are the obsolescence of goods;
A - forms of satisfying needs, alternative to the market (in particular, natural sources of consumption, the black market, etc.), as well as the consumption of substitute goods;
С - the share of competitors in the market.
The market saturation indicator also plays an independent role in market analysis, since it has a strong influence on the cyclicality of the market, limiting demand. Market saturation is the amount of goods available in a household or capital goods at a given moment. Market saturation is also understood as the availability of goods in the trading network.
For durable goods, the balance sheet method is used:
Нк = Нн + - П-В,
where Нк - availability of goods at the end of the period;
H n - availability of goods at the beginning of the period;
P - purchase (receipt) of goods for the period;
B - disposal of goods for the period.
In this case, the disposal is calculated according to the standards for the average duration of the product's service. Physical and obsolescence causes the so-called demand for replacement.