Market Potential Indicators

Market Potential Indicators

The Market Potential Indicator (MPI) was born after critically considering several indicators used to compare the emerging markets. Over time, globalization has become another important factor influencing its significance and application by many ambitious business investors according to Warf. MPI has not only become a vital tool for such firms but also has had an important place regarding decision making of going global. With that in mind, the paper seeks to find answers to the indicators used in developing this index, the indicators that would a significant impact for a company marketing laptop computers and the countries ideal for the company to enter using the MPI and reasons supporting such a decision.

The Indicators used in Developing MPI Index

The components that define MPI are eight in total. They include commercial infrastructure, market size, country risks, economic freedom, market consumption, market receptivity, market growth and market intensity.  As Burns and Scapens noted, the market size offers an overview of the population percentage in urban areas and importantly their average consumption. In other words, as opposed to just considering the apparent statistics, only the feasible market has a significant importance to business investment. Growth rate provides the historical data pertaining particular goods and services. By considering the preferences and tastes of a particular niche, investors would identify the potential of that market to grow over time or what could be done at best to coin the intended growth.

Moreover, as Coombs et al. note, the market consumption capacity plays a central role in determining the potential of a particular market for specific products. The consumption, however, could not be ascertained without considering the income of the population. For instance, most businesses thrive in urban areas since most people hailing from such settings are working and hence with higher consumption rate as compared to those at the remote locations. Commercial infrastructure is yet another important factor necessary in pointing out the potential of the market. It demonstrates the technological potential of the market in question. Economic freedom, which makes another crucial indicator delineates the degree of political freedom the target population has. Therefore, this means that economic freedom has its heart on the critical relationship that exists between the governments and their citizens. For instance, state controls that seem to interfere with the individual autonomy of its citizens limit their economic freedom.

Also, important to consider is the market intensity. At a glance, it offers a general overview of the gross consumption rates of the domestic products mostly in private sectors. It as well borrows the knowledge of understanding the income of various factions of the population. Country risk offers another important indicator that any ambitious business cannot ignore. It reflects understanding the factors that can contribute high-risk or low-risk for a given country. Social factors such as religion and politics provide good examples of such considerations. Finally, the market receptivity helps in measuring the amount of the importations a particular country makes in comparison to the gross domestic product (GDP). It helps in determining the willingness of the state to accept the foreign products. All these indicators are instrumental in formulating the MPI. None of them should be left for chances (Heisinger).

Indicator with greater impact on companies that market laptop computers on international platforms

Hypothetically considering the laptops as the product and the global market as the target, the market growth rate, consumption capacity, country risk and commercial infrastructure becomes the indicators to consider. The internet use regarding the running of daily activities makes the major landmark of the current century (Warf). A significant portion of the population from across the world have turned t6o the use of devices that connect them to the other parts of the globe that could have been a nightmare without them. Social networking also coins the increased demand of the related devices. With that in mind, pricing of the laptop computers is of great necessity. However, this cannot stand on its own with considering the market consumption capacity as the stepping stone. It acts as the initial factor that could help in influencing the consumers into purchasing the product.

On the other hand, the growth rate could be demonstrative on how well the related companies offering the same product are performing. Importantly, this helps to point out the level of competition that exists in the market with the product in question in mind. Furthermore, commercial infrastructure becomes a necessary indicator (Wiengarten et al.). The level of technology of a particular country affects the willingness with which they accept the features as provided for by the laptop computers. Those that consider themselves developed may hardly recognize the same products from countries they believe they are not equals. Lastly, the country risk determines the confidence the foreign investors may have in establishing their business. For instance, countries predisposed to civil wars may discourage foreign investment due to fear of loss their business. The above factors are hypothetical to the laptop computer case study.