Market Sizing and Market Types

Market Sizing

• Market sizing defines the total potential buyers or revenue, this should be done before setting campaign objectives
• It determines how big the market is for a product

Potential Market

• The potential market includes all consumers who show interest in a product, irrespective of their current buying ability
• It encompasses everyone who wants the product, even if they can't afford it

Available Market

• The available market is the segment of the potential market that possesses the income and access to purchase the product
• This includes those who want the product and have the means to buy it

Target Market

• The target market denotes the specific segment within the available market that a company aims to serve
• In essence, it is the group the company chooses to sell to

POM (Potential Obtainable Market)

• POM refers to the portion of the market a company can realistically capture, considering its resources and capabilities
• This represents the realistic chunk of the market a company could win

TAM (Total Addressable Market)

• TAM is the total market demand for a product or service, assuming 100% market capture
• It signifies the biggest possible opportunity if everyone bought the product

SAM (Serviceable Available Market)

• SAM is the segment of the TAM that the company can effectively serve with its current offerings & geographic reach
• It's the chunk of the total market the business can serve right now

SOM (Serviceable Obtainable Market)

• SOM is the portion of the SAM that a company aims to capture, especially considering competition and internal constraints
• This indicates the share of the market the company can realistically win

Market Forecast

• Market forecast provides a projection of future market size or growth
• This projects how the market will either expand or contract in the future i.e prediction

Market Demand

• This is the product quantity a defined customer group will buy in a defined market
• It tells how much of a product people want to buy in total

Product Demand

• This focuses on the demand for a specific product or brand within a market
• It represents how many people want a business' version of a product

Market Share

• This represents a brand's portion of total sales in a market
• Market share shows the slice of the sales pie for the business

Relative Market Share

• Relative market share compares a brand's market share to that of its largest competitor
• Relative Market Share (I) =Brand’s Market Share (%) / Largest Competitor’s Market Share (%)

Market Penetration

• Market penetration is the percentage of the target market that purchases a product
• Formula: Customers Who Have Purchased a Product in the Category (#) / Total Population (#)

Product Penetration

• This is the proportion of people in a market who use a specific product.

Numerical Distribution

• This measures the percentage of retail outlets that carry a product
• Use the formula: Number of Outlets Carrying Brand (#) /Total Number of Outlets (#) to calculate it

Weighted Distribution

• This focuses on the percentage of category sales volume from outlets that stock a product
• It shows how well the business is stocked in the correct locations

Market Concentration

• Market Concentration highlights the degree to which a few firms dominate total sales in a market

Return on Sales (ROS)

• ROS is calculated by Net profit divided by total sales revenue — measures profitability
• (How much profit you make per €1 of sales)
• Formula: Return on Sales—ROS (%) = Net Profit ($) / Sales Revenue ($)

Return on Marketing Investment (MROI)

• MROI refers to the revenue or profit generated for every euro spent on marketing
• (How much money you make for every €1 spent on marketing)
• Formula: Incremental Financial Value Created By Marketing ($) – Cost of Marketing ($) / Cost of Marketing ($)

Sales Force Effectiveness

• This describes the efficiency and productivity of a sales team in generating revenue
• (How good your sales team is at converting leads into deals)
• It can be shown using 2 formulas: -Sales ($) / Contacts with Clients (Calls) (#) -Sales ($) / Potential & Active Accounts (#)

Comparative Pricing Index

• This highlights a brand's average price relative to the category average (How expensive your product is compared to the competition)

Customer Acquisition Cost (CAC)

• Total marketing and sales spend is divided by the number of new customers acquired to find CAC

Customer Lifetime Value (CLV)

• This describes the total net profit expected from a customer over their relationship with the brand (How much a customer is worth to you over time)

Sell-In vs Sell-Out

• Sell-In: Sales from the company to intermediaries like distributors or retailers
• Sell-Out: Sales from those intermediaries to the final consumers
• (Sell-in = to stores; Sell-out = to buyers)

5C Model

• This tool uses 5 lenses: Company, Customers, Competitors, Collaborators, and Context, to give a comprehensive view
• This view allows understanding the market, identifying opportunities and aligning the business
• This gives a 360° assessment of the playing field

Product Portfolio Analysis

• This method assesses all products a company offers to ensure the business strategy aligns with profitability

BCG Matrix

• This portfolio management tool categorises products in 4 parts: market growth rate (industry attractiveness) & relative market share (competitive strength)
• This sorts products by how they well and how fast the market is growing
• Stars are high growth, requiring investments to sustain their growth
• Cashcows generates steady cashflow with minimal investment
• Question Marks are high growth but need a lot of cash but don’t deliver much returns yet
• Dogs need divestment or repositioning

Product life cycle

• This model describes the 4 stages of launch, growth, maturity, and decline of a product

Cannibalization

• It describes a situation where a new product reduces sales of an existing product from the same company
• It's the concept of your new product stealing customers from your old one

PESTEL Analysis

• It analysis macro-environmental factors like Political, Economic, Social, Technological, Environmental, Legal
• Understanding the big external forces shaping the market

Porters 5 Forces

• This analysis looks at the competitive dynamics within the industry to determine intensity of competition
• Looks at: -Competitive Rivalry to determine intensity of existing players -Buyer Power to measure how customers influence prices -Supplier Power to measure influency of power over prices and availability -Threat of Substitutes is the risk that alternative products may fulfill the same need -Threat of New Entrants shows how easy for new competitors to enter

Market opportunity

• Market opportunity is where can address unmet consumer needs

Setting Objectives

• Setting objectives is to set milestones and goals within the business

Coherence and consistency

• Coherence makes sure everything aligns

Market Growth

• Market growth shows overall increase

Market Share Growth

• Share growth shows incrtease in slice

Stakeholder Analysis

• Stakeholders are people who it affects most - so find out who those are

Perceived Value

• Value to the customer - not cost

Product Market fit

• It shows when product satisfies needs

MVP (Minimum Viable Product)

• MVP is basically bare bones version

Pricing strategies

• Value is based on perception
• Plus - adds market up
• Beat - low price to gain

Value based process

• Based on total
• push means product through retailers
• you can't max everything

Paid/owned/organic

• Paid you pay
• Owned you control
• organic is unpaid

Reach

• How to gain interest

What is a SMART framework

• Specific with outcomes

Value creation

• Create customers

Go to market

• Speed / how is business

Revenue growth formula

• Tell you were revenue is

BMC model - nine building blocks

• What are major costs
• Who’s customer based