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This is an Open Access article, distributed under the terms 
of the Creative Commons Attribution CC BY 4.0

1 Odesa National University of Technology, Ukraine
E-mail: savchenko1802@ukr.net
ORCID: https://orcid.org/0000-0001-7990-1570
ResearcherID: AAA-9860-2019
2 Dnipro State Agrarian and Economic University, Ukraine (corresponding author)
E-mail: olga_gelevan@ukr.net
ORCID: https://orcid.org/0000-0002-3215-9521
ResearcherID: T-7950-2019
3 Odesa National University of Technology, Ukraine
E-mail: alenavn11@gmail.com
ORCID: https://orcid.org/0000-0002-1665-0361
ResearcherID: W-4105-2017

DOI: https://doi.org/10.30525/2256-0742/2024-10-1-210-215

FORMATION OF A MODEL FOR MANAGING  
THE POTENTIAL OF REGIONAL MARKETS

Tetiana Savchenko1, Olga Rodina2, Olena Nikoliuk3

Abstract. In an unstable and rapidly changing economic environment, it becomes even more difficult to determine 
the state and prospects of development of specific markets, especially regional ones, where specific conditions are  
in place. In order to effectively coordinate the development of a particular regional market, it is necessary to clearly 
define the extent to which its potential has been exploited and to identify the factors that influence the formation 
of the regional market's potential. The subject of the study is the theoretical and methodological foundations of 
managing the potential of regional markets. The aim of the study is to develop a model for managing the potential 
of the regional market. Methodology. To achieve the goal of the study, the following tasks were set and solved: 
a critical analysis of approaches to the definition of the concept of "regional market potential" was carried out, 
the theoretical and methodological foundations for the formation of a model for managing the potential of the 
regional market were substantiated, the components of this model were clarified, and the types of links between 
the components of the model for managing the potential of the regional market were identified. The paper uses the 
following methods and approaches to research: abstract and logical approach used in the study of the theoretical 
and methodological foundations of interaction management, analysis of theoretical approaches to the formation 
of a model for managing the potential of the regional market, inductive and deductive (used to determine the 
factors influencing the formation of a model for managing the potential of the regional market), systematisation 
and generalisation (to clarify the concept of "regional market potential"). Results. The research considers the 
processes of formation and management of the potential of regional markets. It reveals the essence of the concept 
of "potential of the regional market" on the basis of studying the definition of the concept of "potential". The article 
describes and groups approaches to determining the market potential of a region and formulates its own definition 
of the regional market potential as "the upper limit of production, sales and consumption of a certain type of 
product in the region, at which the financial interests of market participants are maximally satisfied, for which the  
existing resources are sufficient". The article characterises the structure of the regional market potential: the forming 
component (production, consumer and trade potential) and the ensuring component (socio-economic potential 
of the region). A model of management of the regional market potential is proposed. Practical implications. The 
proposed model will help to clarify the role and functional relationships between the components of the regional 
market potential and take into account the peculiarities of the functioning of regional markets in the implementation 
of market forecasts. Value/originality. In the structure of the regional market potential, unlike the well-known ones,  
the forming and ensuring components of the regional market potential are distinguished. The addition of the trade 
potential component to the traditional forming components, such as consumer and production potential, will allow 
taking into account trade opportunities and conditions for fast and high-quality trade organisation in the region. 

Keywords: regional market potential, consumer potential, production potential, trade potential, factors of influence, 
management model, agricultural products.

JEL Classification: A10, R12



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1. Introduction 
As a result of the historical and economic 

preconditions for the development of individual 
territories, there is a varying degree of development 
not only of commodity markets, but also of regional 
markets. This can be explained by many reasons: 
regional population density, income levels, industrial 
development and job availability, commodity  
specifics of production in certain regions, and thus 
opportunities for the production and consumption 
of certain groups of goods. The saturation of regions  
with certain products, demand for certain types of 
goods, the dynamics of production and consumption 
of products all characterise the future opportunities 
and trends in the sale of a certain group of goods  
within a particular regional market, and thus  
characterise the potential of this market.

The study of various aspects of the theory of  
enterprise potential management is devoted to the 
works of many domestic scientists – Ye. Beltiukov, 
I. Dolzhanskyi, R. Krasnokutskaya, O. Olesiuk,  
I. Riepina, H. Udalykh, O. Fedonina, and others. 
The study of the issues of managing the potential of 
regional markets is covered in the research of such 
authors as: S. Alieksieev, T. Ruzhytska, D. Teslya, 
S. Shults, T. Zaychuk. However, the structure of 
the regional market potential and the impact of its 
individual components on the degree of development 
of the regional market potential have been  
insufficiently studied.

The aim of the study is to form a model for managing  
the potential of the regional market. To achieve the 
research goal, the following tasks have been set and 
solved: to carry out a critical analysis of approaches 
to defining the concept of "regional market potential", 
to substantiate the theoretical and methodological 
foundations for the formation of a model for managing 
the potential of the regional market, to clarify the 
components of this model and to identify the types 
of links between the components of the model for 
managing the potential of the regional market.

The article uses the following methods and 
approaches to research: abstract and logical approach  
used in the study of the theoretical and methodological 
foundations of interaction management, analysis of 
theoretical approaches to the formation of a model for 
managing the potential of the regional market, inductive 
and deductive (used to determine the factors influencing 
the formation of a model for managing the potential of  
the regional market), systematisation and generalisation 
(to clarify the concept of "regional market potential").

2. Genesis of the Concept  
of "Regional Market Potential"

The state of market conditions characterises both  
the realities of cooperation between all market 

participants at the current stage of development 
and outlines the possibilities for the development 
of a particular market under certain circumstances. 
Opportunities for economic entities to fulfil their  
needs depend not only on the type of products 
sold on the market, but also on the region in which 
the products are sold. Possibilities of satisfying the  
interests of representatives of supply and demand in 
 the market are commonly referred to as its potential.

Economic science has borrowed the term "potential" 
from physics, and accordingly, the concept of 
market potential is "...the production and consumer  
capabilities of business entities that determine 
the equilibrium level of supply and demand." 
(Derevyanenko, 2001; Krstevski et al., 2024)

Considering potential as an economic category, one 
usually relies on three main concepts: resource (as 
a set of resources and links between them), functional 
(as a set of functions that ensure the realisation of  
abilities and opportunities), resource-target (as 
a set of resources and abilities to achieve certain results, 
goals) and other concepts. The optimal structure 
of the capability should have a minimum number 
of components, but at the same time, they should 
fully perform the assigned functions. Some authors, 
such as Kovalska L. S., distinguish such a concept as 
"regional potential", interpreting it as a set of economic, 
social and natural resources available in the region  
(Kovalska, 2012).

It is when considering the definition of the region's 
market potential that there is a discrepancy in the  
views of scholars (Table 1).

Based on the analysis, this paper offers the following 
definition of the concept, in particular, that the  
regional market potential is the upper limit of 
production, sales and consumption of a certain type  
of product in the region, which maximises the  
interests of market participants, for which existing 
resources are sufficient.

The potential of a regional market is assessed primarily 
as an opportunity to sell products in a particular region, 
with the maximum possible consumption of products 
in a given region being taken into account. In turn,  
when assessing the potential of the regional food  
market, the norm recommended by the Ministry of 
Health for rational food consumption should be used  
to calculate the absolute market potential. 

Today, according to the Ministry of Health, the 
rational consumption of meat and meat products is 
83 kg per year (while the average consumption in 
Ukraine in 2021 was 53 kg per year). Therefore, it is 
the assessment of the potential of regional markets  
that should be given sufficient attention today. Thus, 
today, the potential of regional food markets (Figure 1),  
using the example of meat consumption in the  
regions of Ukraine, demonstrates the undercon-
sumption of this food product in the diet. 



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To determine the untapped potential of the regional 
market, a comparison of the consumption of meat and 
meat products by region of Ukraine in 2021 with the 
consumption rate recommended by the Ministry of 
Health, taking into account the consumer preferences 
of the population, will be made. The untapped potential 
can be considered as the potential sales volume for 
enterprises engaged in the production and sale of meat 
and meat products, provided that the level of socio-
economic security of the population improves and 
consumption of meat and meat products grows.

3. Conceptual Approaches to the Formation  
of a Model of Interaction of Components  
of the Regional Market Potential

The region's market potential is developed and 
shaped by a number of factors (Savchenko et al., 2023): 

the availability of powerful industrial production 
facilities; the level of development of the region's 
market infrastructure in general; the development and 
availability of logistics routes for the sale of products; 
the demographic situation in the region, which has 
a direct impact on the creation of aggregate demand; 
household incomes that form the purchasing power 
of demand; the region's resource base (raw materials, 
material, labour, financial resources; the possibility 
of selling products outside the region, taking into  
account the possibilities of international trade.

A clear and unambiguous picture of the structure of 
market potential, especially regional potential, has not 
yet been formed. This is due to the fact that research 
on this issue is carried out within the framework of 
individual manifestations of potential. As a result, 
a rich toolkit for assessing the market, production, 
and financial capabilities of an enterprise has been 

Table 1
Approaches to determining the market potential of the region

Approach basis Definition

Consumption options Possibilities of consumption by the regional market of a specific quantity of a specific product in different 
environmental situations (taking into account risks) during the year (Alieksieev, 2014)

System of relations A system of relations between producers, intermediaries and consumers of goods and services (Plotnytska, 2015)

Sales volume The amount of sales of any product or group of products of the entire industry in a certain market over a certain 
period of time (Krasnokutskaya, 2008)

Resulting performance 
potential

The resulting potential of any industry complex and the accumulation of economic potential (resource, 
production, export, investment, and so forth) (Revutska et al., 2012)

Upper limit of demand Absolute market potential as an upper bound on demand (Zaychuk, 2012) 

Part of the region's 
economic potential

A part of the economic potential of a region, a separate set of interconnected elements of its economic system, 
distinguished by the principle of their function in the market, characterising the region's ability to produce and 
consumption opportunities (Teslya et al., 2014) 

Source: compiled by the authors

0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00

Volhynia
Rivne

Lviv
Ternopil

Khmelnytskiy

Ivano-Frankivsk

Zakarpattіa

Chernivtsi

Chernihiv
Poltava

Sumy
Kharkiv

Vinnytsia
Zhytomyr
Kyiv

Kropyvnytskyi
Cherkasy

Dnipro

Zaporizhzhia

Donetsk

Luhansk
Odesa

Kherson 
Mykolaiv

Kherson 80,00

Developed potential of the regional market

Figure 1. Share of the utilised potential of the regional food market 
(meat and meat products) in Ukraine, %

Source: compiled by the authors



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accumulated, but at the same time, there is a lack of 
comprehensive coverage and a systematic approach to 
presenting the structure of market potential. The most 
common opinion is that the total market potential 
consists of production and consumer potential.

Production potential as a component of market 
potential characterises the ability of aggregate 
production to supply products to this market. At the  
same time, it also reveals the peculiarities of its 
components: both in terms of the production 
potential of individual enterprises and production 
factors: production capacity utilisation, technology 
innovation, human resources, and financial resources. 
Consumer potential characterises a certain capacity 
of the regional market in terms of consumption of 
a particular type of product. The authors of this study 
agree with this opinion, but at the same time note  
that such a characterisation of the aggregate potential 
of the regional market does not take into account  
some aspects that influence its formation. 

Market potential is also considered from the macro 
and micro levels. At the macro level, the overall 
market potential (opportunities) for consumption 
and production of a particular type of product is  
determined, depending on the market conditions of 
a particular region. At the micro-level, production, 
consumer and trade capacities are characterised 
separately.

Thus, the components of the regional market 
potential can be divided into two categories (Figure 2): 
forming (production, consumer and trade potential) 
and ensuring (socio-economic potential of the region).

The constituent components form the basis of any 
business process – the structure of the regional market 
is formed on the basis of consumer, production,  

trade opportunities and needs. Support and realisation 
of the production, consumer and trade potential of  
the regional market is achieved through the realisation 
of the socio-economic potential of the region.

Production potential describes the material and 
technical condition of the poultry sector and the 
availability of production and technological support 
required for the production of products, as well as 
the ability to quickly reorient production facilities 
and launch new products. Production potential is the 
material and resource base that ensures or limits the 
ability of production to achieve business prospects. 

Consumer potential as a component of market 
potential characterises the aggregate demand for 
products. If one considers consumer potential from 
a regional perspective, it can be described as the 
purchasing power of consumers identified by a certain 
territorial feature.

In addition to the purchasing power to absorb 
a certain amount of goods, which directly depends 
on the income of the population, consumer potential 
characterises the structure of the assortment with  
which the manufacturer reaches the consumer.

Consumer potential is also a reflection of the 
economic and social development of the region, 
as it shows, on the one hand, the level of provision  
of the region's population with the necessary products, 
and, on the other hand, the ability of the population  
to make purchases.

The size of potential demand indicates the degree  
of attractiveness of the region for enterprises and  
serves as an incentive for the development of their 
production potential.

In turn, consumer potential allows to forecast the 
potential capacity of the regional market. Market 

Regional market potential

Production Trade рotential   

Consumer 

Socio-economic potential of the region

Fo
rm

at
iv

e 
co

m
po

ne
nt

Su
pp

or
tin

g 
co

ns
tit

ue
nt

s

potential

potential

Figure 2. Regional market potential management model

Source: compiled by the authors



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Vol. 10 No. 1, 2024
capacity is the amount of goods that a market can absorb 
under certain conditions in a given period of time.

Both the production and consumer potential of the 
region is influenced by the level of trade potential,  
which is also a component of the regional market 
potential.

Trade potential is characterised by the ability of 
producers to deliver and the availability of retail  
chains to sell their products, and by the availability  
and convenience of purchases for consumers.

The component that ensures the potential of the 
regional market is the socio-economic potential of the 
region. The level of the region's social and economic 
potential is evidenced by socio-economic indicators 
that characterise the situation in the region, such as  
the number of available population, available income  
per capita, population expenditures per capita, 
consumer price index, etc.

It is the development of the region that is the  
starting point for the formation of the regional  
product market, as this is what determines the growth 
or decline trends for a particular type of product in  
the region.

A certain region can be viewed as a certain market 
segment, which means that the attractiveness of  
a region can be characterised by: the availability of  
the regional market (from the perspective of 
producers – the degree of market monopolisation 
and barriers to entry; from the perspective of 
consumers – the price and logistical availability of 
products; from the perspective of intermediaries –  
the ability to supply products);
– potential profitability of the market (pricing policy 
of both producers and intermediaries, possible sales 
volume, level of consumer solvency;
– development of the regional market (the level of 
consumer demand satisfaction, the degree of product 
saturation in the market, the established communi-
cation links and the degree of awareness of the terms  
of cooperation among all market participants.

On the basis of determining the characteristics of 
a particular region and the degree of involvement 
of all resources in the production and consumption 

of products, it becomes possible to formulate a  
conceptual approach to improving the efficiency 
of using the potential of the regional market. This 
approach requires the formation and selection of 
a certain system of indicators, which, on the one  
hand, will meet the specifics and requirements of 
a particular industry, and, on the other hand, will 
take into account the possibilities for the territorial 
separation of regional markets as single objects of  
research in the national market system. The 
methodological approach should be aimed not only 
at stating the results of the study, but also at finding 
opportunities to increase the level of the market's 
exploited potential.

4. Conclusions 
The article describes and groups approaches to 

determining the market potential of a region and 
formulates its own definition of the regional market 
potential as "the upper limit of production, sales 
and consumption of a certain type of product in the  
region, at which the financial interests of market 
participants are maximally satisfied, for which the 
existing resources are sufficient".

The authors define the components of the regional 
market potential, which can be conditionally divided 
into two categories: forming (production, consumer 
and trade potential) and ensuring (socio-economic 
potential of the region). The constituent components 
form the basis of any business process – public 
authorities set goals, objectives and ways to achieve  
them based on consumer needs and production 
capabilities of the region. The support and 
implementation of the set goals is based on the level  
of human and land resources in the region,  
infrastructure development, speed of information 
processes and compliance of the level of innovation  
ith modern market requirements. The proposed  
model will help to clarify the role and functional 
relationships between the components of the 
regional market potential and take into account the 
peculiarities of the functioning of regional markets  
in the implementation of market forecasts.

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Received on: 23th of January, 2024
Accepted on: 12th of March, 2024
Published on: 05th of April, 2024