Market potential refers to the maximum level of sales or revenue that a product or service can achieve within a specific market. It takes into account factors such as consumer demand, competition, and economic conditions to determine the potential size and growth of a market. This concept is crucial for businesses to understand as it helps them identify opportunities and make informed decisions about their marketing strategies and target audience. A high market potential indicates a favorable environment for a product or service to succeed, while a low market potential may require businesses to adapt their approach or consider alternative markets.