How is the potential volume calculated in the SPPD opportunity gap?

The calculation of potential volume in the SPPD (Sales, Profit, Pricing, and Distribution) opportunity gap is focused on understanding the difference between current and desired conditions, particularly in terms of distribution. The correct approach involves taking the dollar volume and factoring in the current distribution percentage to isolate the opportunity for growth based on target distribution.

By using the formula, the dollar volume is divided by the current distribution percentage to adjust for the volume that's currently being realized within the available distribution. Then, by taking the target distribution percentage and subtracting the current distribution percentage, you’re identifying the additional market access needed to capitalize on potential sales. This calculation accurately reflects how much more volume could be achieved if distribution were to expand and align with the target.

This method not only considers the current market size and distribution but also the necessary adjustments needed to reach the desired level of market presence. It provides a clear pathway to understanding potential growth opportunities in a structured and quantitative manner, which is essential for effective category management.