Final answer:
The first step in estimating a product's potential sales is to estimate total demand for the product in the market, taking into account market size and customer demand.
Step-by-step explanation:
The first step a marketer should take to estimate a product's potential sales is to estimate total demand for the product in the market. This involves analyzing the market size, customer needs and preferences, and the demand for similar products.
Before determining production levels or conducting surveys, it is vital to understand the broader market environment, which will affect every other decision in the product's sales strategy. Understanding the market helps to better predict the company's potential market share and to plan how to expand market share effectively.
In looking at how firms operate in various market structures, it's clear that analyzing market power and the competitiveness of the industry are integral in determining a product's potential. This process is akin to a monopolist determining its profit-maximizing output by evaluating marginal revenues and costs; for any firm, determining potential sales involves a similar assessment of the market conditions and expected demand.