Analyzing market size can help businesses develop competitive strategies that are tailored to their specific market and competition. It can reveal opportunities for growth, as well as potential risks and challenges.
What’s your revenue potential? Understand market size to know that.
Market size is measured by the total potential revenue or volume of sales for a particular product or service in a given market. Calculating it is a good way to arrive at a potential indication of the revenue you can make, the audience you can sell to. It’s also useful for being in the know of the existing and future economic conditions and the market’s growth rate.
Estimate market size matters for your success. Here’s why.
Knowing the market size is essential to serving it effectively. The calculation can help you make successful business decisions and strategies, and improve your operations. With an accurate estimate of your market size, you can:
Determine your market share
Determine your market share and find out how much dominance you can have in the market.
Know growth potential
Know your growth potential and strategically work towards it.
Determine competitors’ power
Determine your competitor’s market share and the power they hold.
Here are some different ways to calculate the market size
To create an effective business plan and marketing strategies, you need to know how to calculate market size. You can estimate market size using any of these approaches:
Estimate the overall size of the market, and then break it down into smaller segments to get an accurate result of the market size.
Bisect the market into individual segments or sub-segments and estimate for each of them. Then, put that information together to get an aggregate result of the market size.
Industry reports and surveys can provide accurate information based on data from experts and credible sources. You can use these to as well to gather an estimate of market size.
Get the right competitor sales and revenue numbers to gain insight into how large the market is, and how much share your competitors are tapping into.
Turns out, accurate market size estimation is not always straightforward.
Determining the market size accurately can be a challenging task. After all, there’s quite some guesswork involved. Here are 6 challenges you must be aware of before diving into it: