After reading this article you will learn about:- 1. Meaning of Demand 2. Components of Demand 3. Company Demand 4. Market Demand 5. Company Potential 6. Market Potential.

Meaning of Demand:

In evaluating the marketing opportunities, the step is to estimate total market demand.

According to Philip Kotler, “Market demand for a product is the total volume that would be bought by a defined customer group, in a defined geographical area, in a defined time period, in defined marketing environment, under a defined marketing programme.”

Components of Demand:

From the above definition the following components can be drawn:


1. Product: How is it defined.

2. Volume: Measured in sales units or rupees.

3. Bought: Means volume ordered or purchased.

4. Defined customer group: Particular segment/segments or market.


5. Defined geographical area.

6. Defined marketing environment.

7. Defined marketing programme: Elements of marketing Mix.

Company Demand:

It is the total volume that would be sold by the company in a definite time period. Company demand is the company’s share of market demand.


CD – MD x Cs

CD – Company demand, MD = Market demand, Cs = Company’s market share.

Market Demand:

Market demand is the total demand of all the firms in the market (industry) in a particular time period.

Company Potential:

Company potential is the maximum number of units (sales volume) that can be sold by the company in a particular time period.

Marketing Efforts

Market Potential:

It is the maximum number of units that can be sold by an industry in a particular time period. It is a maximum amount of sales that might be available to all the firms in an industry during a given period, under a given level of industry marketing effort and given environmental conditions.

Q = nqp

Q = Market potential

n = Number of buyers in the specific product/market


q = Quantity purchase by an average buyer

p = Price of an average unit.