The 2006 Economic and Product Market Databook for Conakry, Guinea

Market Potential Estimation MethodologyOverviewThis study covers the outlook for products and services in Conakry. Estimates reported are given for the latent demand, or potential industry earnings (P.I.E.), for Conakry across hundreds of categories (in millions of U.S. dollars) and of the region and of the globe. These comparative benchmarks allow the reader to quickly gauge a Conakry vis-à-vis the world. Using econometric models which project fundamental economic dynamics, latent...
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Market Potential Estimation MethodologyOverviewThis study covers the outlook for products and services in Conakry. Estimates reported are given for the latent demand, or potential industry earnings (P.I.E.), for Conakry across hundreds of categories (in millions of U.S. dollars) and of the region and of the globe. These comparative benchmarks allow the reader to quickly gauge a Conakry vis-à-vis the world. Using econometric models which project fundamental economic dynamics, latent demand estimates are created. This report does not discuss the specific players in the market serving the latent demand, nor specific details at the product level. The study also does not consider short-term cyclicalities that might affect realized sales. The study, therefore, is strategic in nature, taking an aggregate and long-run view, irrespective of the players or products involved.This study does not report actual sales data, but give, however, my estimates for the latent demand, or the P.I.E. for a variety of categories. In order to make these estimates, a multi-stage methodology was employed that is often taught in courses on international strategic planning at graduate schools of business.What is Latent Demand and the P.I.E.'The concept of latent demand is rather subtle. The term latent typically refers to something that is dormant, not observable, or not yet realized. Demand is the notion of an economic quantity that a target population or market requires under different assumptions of price, quality, and distribution, among other factors. Latent demand, therefore, is commonly defined by economists as the industry earnings of a market when that market becomes accessible and attractive to serve by competing firms. It is a measure, therefore, of potential industry earnings (P.I.E.) or total revenues (not profit) if a market is served in an efficient manner. It is typically expressed as the total revenues potentially extracted by firms. The "market" is defined at a given level in the value chain. There can be latent demand at the retail level, at the wholesale level, the manufacturing level, and the raw materials level (the P.I.E. of higher levels of the value chain being always smaller than the P.I.E. of levels at lower levels of the same value chain, assuming all levels maintain minimum profitability).The latent demand is not actual or historic sales. Nor is latent demand future sales. In fact, latent demand can be lower either lower or higher than actual sales if a market is inefficient (i.e., not representative of relatively competitive levels). Inefficiencies arise from a number of factors, including the lack of international openness, cultural barriers to consumption, regulations, and cartel-like behavior on the part of firms. In general, however, latent demand is typically larger than actual sales in a country market. It should be noted that the estimates are "culture blind" and "climate blind", meaning that sales may in fact be lower than the latent demand due to cultural or exogenous factors, such as religion or climate (e.g. the presence of certain religions can effect the actual sales of certain food and beverage products, in the same way that climatic conditions can affect the actual sales of clothing and/or heating products). The estimates of latent demand do not explicitly control for either these long-run exogenous factors or shot-run exogenous factors that may be present from year to year (e.g. the effects of war, SARS, terrorist activities, civil wars, natural disasters, elections, or similar events).For reasons discussed later, this report does not consider the notion of "unit quantities", only total latent revenues (i.e., a calculation of price times quantity is never made, though one is implied). The units used in this report are U.S. dollars not adjusted for inflation (i.e., the figures incorporate inflationary trends) and not adjusted for future dynamics in exchange rates (i.e., the figures reflect average exchange rates