How to determine the size of the market
Video: How to Estimate Market Size for a New Product 2024, June
Determining the size of the market is a necessity that provides company management with an objective assessment of the market situation. It allows you to see opportunities for business development, determine a place among competitors, choose new areas of activity, plan production volumes.
Instruction manual
1
Note that there is no single approach to determining market size. In addition, the size (volume) and market capacity are often confused. Market capacity is the maximum sales volume that all enterprises can achieve within a certain period of time. Market size - this is the real sale of goods in a certain market for a certain period.
2
You can determine the size of a market across a country or region based on structural characteristics. At the same time, take into account the following indicators: production, export and import volume, stock balances. The calculation is based on data from state statistics. To assess the market size in this way can a marketer with high analytical skills.
3
Use a method based on determining the volume of production to estimate market size. It also needs statistics, but it is much more accurate, especially if the market is relatively transparent, served by few participants, and exports and imports are easily determined. In our country, these markets include the market for raw materials, cars, capital construction.
4
You can determine the volume of the market by the volume of consumption. However, to do this is somewhat more difficult than to assess the market from the side of production. There is not enough statistics for this, so resort to various marketing research. It can be telephone surveys, expert opinions, personal interviews. Most often, this method is used to determine the size of the market for food, cosmetics, and cigarettes.
5
You can estimate the size of the market by the volume of sales, using a retail audit, a wholesale company survey or expert estimates. A retail audit is based on the fact that goods are sold only through a retail network (shops, supermarkets, kiosks, etc.). Market size is determined by summing up all sales at all points of sale. When interviewing wholesalers, find out the volume and frequency of purchase, preference for types and brands of products, etc. You can evaluate sales in the market if you take into account the conclusions of experts. As experts, as a rule, are heads of commercial services, representatives of professional associations, journalists, and analysts.
