Market Demand Potential

INTRODUCTION

An important issue for most businesses is answering question, "What is my market share?" Fixed in the question is a series of related business issues. The underlying themes typically include the following:

Market demand - "How many dollars are there in this market for our product?"

Market potential - "How much of the potential in the market can we capture?" (Tipp 2001).

This paper attempts to estimate the market demand and potential of Personal Digitial Assistant (PDAs) in a defined geographic market of the State of Maryland. The study focuses on the TOSHIBA AMERICA INFORMATION SYSTEMS, INC. - a major PDA manufacture and based in California, U.S.A. It begins with a brief product description followed by methodology and an estimate of market and potential demand supported by primary and secondary research. It concludes with a summary of findings.

Product Description

Toshiba designed PDA for users who need a PDA that does more than simple calendar and address book functionality, the Toshiba PDA with Pocket PC Series delivers a robust application feature-set and expansion capabilities empowering the user to stay productive all the time. These PDAs are Powered by the Intel® processor with Intel XScale™ technology at 200MHz to 300MHz and 32 to 64MB of RAM, the Pocket PC edition of PDAs delivers a powerful feature-set to keep users productive at all times. Toshiba competes with the other manufacture that also uses Palm operating system in the PDA.

Methodology

Kotler and Gary (2001) defines, "the total market demand for a product or service is the total volume that would be bought by a defined consumer group in a defined geographic area in a defined time period and in a defined marketing environment under a defined level and mix of industry marketing effort". There are several methods exists to determine market demand and potential such as chain ratio method, market buildup method, market factor index method. This specific case uses the chain ratio method. This method involves multiplying a base number by a chain of adjusting percentages. The simple chain of calculation provides only market demand but additional segments and other qualifying factors would yield more accurate market potential. Please see below the two steps method to determine market demand and market potential.

Step 1. The first step was to determine and quantify the level of PDA demand in the state of Maryland. By using current household population data, an estimate of demand is provided.

Step 2. The second step was to estimate the market potential of Toshiba PDAs.

The underlying assumption for this paper is that an industry survey of potential users would provide the best measure of demand.

There are a number of things this Report does not attempt to address or accomplish.

Among these are:

1. This Report was not designed to determine market potential based on industry marketing expenditure or the specific business and marketing techniques necessary for operating an ongoing PDA manufacturing business concern. Kotler suggests that market potential is a function of market demand and marketing expenditure (Kotler 2001, p. 63). The Toshiba company is very competitive and secretive. Little if any data is made public without purchase from a third party. For instance, annual sales figures for Toshiba are held private and are hidden within the parent company.

2. This Report was not designed to determine or speculate specific market share as defined by Phillip Kotler using customer penetration, customer loyalty, customer selectivity, and price selectivity formulas. As stated previously, no substantiated reference is available without third party research expense.

2. This Report was not designed to forecast the long-term (greater than one year) future economic utility of the PDA as a commercial venture within the state of Maryland.

A number of assumptions were made at the outset of this Report.

These included:

* The Toshiba's PDA manufacturing division will not compete with international wholesalers, manufacturers, and suppliers.

* The Toshiba Company is the only supplier and wholesaler of PDAs in the state of Maryland.

* The average price of PDA is $250 per unit in the state of Maryland.

* The state of Maryland's usage of PDA is proportional to the national average

* This reports considers the household member with the age 25 and above with Bachelor's degree and also commuting at least 15 minutes or more per day are likely to use PDAs.

* This report also considers that household who owns a personal computer are more likely to use PDAs, and there are 40% of households in the state of Maryland who owns at least one personal computer.

Estimate of Current Market Demand and Potential

Calculating the market demand and potential for Toshiba offers insights into the company's strategic options. To find the answers, one can turn to readily available geo-demographic and industry data from trade associations, NAISC, and U.S. Census data.

Facts

* The Toshiba Company is classified as a PDA manufacturer and wholesaler - NAICS 334111-01 (SIC 3571-01) - Electronic Computer Manufacturing (e.g., PDAs manufacturing). Data for the state of Maryland is not available.

* Americans