International Business. Imports and Market Potential

The market potential of a product can be defined as “the estimated maximum total sales revenue of all suppliers of a product in a market during a certain period” (Pride and Ferrell 172). Questions linger over whether a country’s imports can be a good measure of the market potential for a product. From this analysis, it will be found that imports do not provide an essential picture of the potential of a product.

First, imports might increase or be subject to significant barriers due to competition from local producers (Seyoum 66). In addition, imports do not provide any idea about the marketing of a product. Marketing is an essential component in generating sales for any product. It is through marketing that people are informed about the availability of a product, prices, and location. Marketing deals with all the approaches that a company uses in order to generate sales for the organization (Kotler and Armstrong 15). Indeed, all the efforts that a company employs must ensure that what is delivered to the clients meets their needs (Capela 72).

Therefore, good marketing ensures that a company is able to identify the needs of the market, understand their requirement, and provide products that satisfy their needs. However, since imports do capture information about the poor marketing efforts, it cannot be a good tool for determining the demand for a product.

Another significant reason why imports cannot be a good measure of a product’s potential is that import data does not capture the changes in the political structure of a given country (Capela 73). The political climate is an indispensable component in international marketing. However, it is true that politics of each country continue to change every now and then. Investors always consider political risk in making their investment decision. Equally, companies also need information about a country’s political disposition in their marketing effort. The demand of a product can easily be affected by a change in the political landscape of a given country (Stevens 41).

This means, anew regime can decide to avoid product of a certain country, or it might prefer products from another region. However, import data does not capture this valuable information, thus making it an ineffective tool for determining the market potential of a product (Pride and Ferrell 65).

According to Kotler, potential demand is an essential component in evaluating or forecasting sales of a product. It is defined as “the maximum possible demand that could be given for one or multiple products in a given market” (Pride and Ferrell 66). Indeed, a company or country must be able to determine demand for its products or services they offer to determine the levels of sale in the future. Estimating potential demand of a product is therefore an important aspect of achieving growth within a company (Seyoum 66). However, import figures do not give any clue about future demand of a product. This therefore goes on to prove that it cannot be relied on to determine the potential that a product can have in a given market.

As discussed above, potential demand might not be properly determined due to poor marketing, information that import data does not provide. In addition, the provision of inferior products, as well as high prices, could be a hindrance in getting demand for a country’s product. For instance, the demand of MP3 increased tremendously after the introduction of the iPod, which had the same technology packaged in a different way. Moreover, the existence of black market might hamper sales of a product (Seyoum 66). This information cannot be availed by import data. Therefore, it is not a good measure of the potential of a product.

In summary, it is clear from the discussion that a country’s imports cannot be relied to provide a good measure for the potential of a product. A country could be making the product locally. In addition, import data does not provide clues about high prices, poor marketing, or changes in the political structure of a given country. Moreover, import data does not give any information about future demand of product, and it is therefore not a good measure of the market potential of the product.

Works Cited

Capela, J. John. Import/Export Kit for Dummies. New Jersey: John Wiley & Sons, 2011. Print.

Kotler, Philip and Armstrong, Gary. Principles of Marketing. New York: McGraw-Hill, 2011. Print.

Pride, M. William, and Ferrell, O. Charles. Marketing. New York: Cengage Learning, 2011. Print.

Seyoum, Belay. Export-Import Theory, Practices, and Procedures. New York: Routledge, 2007. Print.

Stevens, E. Robert. Market Opportunity Analysis: texts and cases. New York: Haworth Press, 2006. Print.

Find out your order's cost