Why Keeping Tabs on Your Market Size is Paramount for Business Success
Evaluate the supply side of the market The supply side of the market can be evaluated by consolidating and adding the sales of companies that operate within a market. In order to obtain the suppliers’ sales, researchers will have to consult a variety of sources. But the challenges here is that, in many cases, small […]
Evaluate the supply side of the market
The supply side of the market can be evaluated by consolidating and adding the sales of companies that operate within a market. In order to obtain the suppliers’ sales, researchers will have to consult a variety of sources. But the challenges here is that, in many cases, small and medium-sized companies are not required to make their turnover figures public. In such cases, researches must try to accurately estimate the sales of various companies. Other sources which may provide insights on the sales turnover may be are in websites, articles in the trade press, or in the company’s sales literature. In many cases, the references might prove to be oblique; thus, referring to the number of employees or productive capacity rather than sales. However, they provide a position which can be further refined.
Another option which provides a quick and more accurate means of assessing the market size is to find people with an overview of the market. Insights from these market and industry experts help sharpen the estimates and add to the researcher’s wider appreciation of the market.
Having a comprehensive understanding of the competitors is critical when determining your market size. Your available market depends significantly on the amount of direct competition you face in your industry. If your competitors deal in products that are outdated, provide terrible customer service, and set higher prices, then you can position against their weaknesses and start attracting some of their customers. On the other hand, if there are a handful of excellent competitors in your space doing lots of things right, it’s going to be harder to break into that market, so you’ll really need to dig into their customer bases and look for areas in their products that fail to meet customer expectations. Your company’s products can be then positioned to win some of those frustrated customers by using the correct marketing mix.
Tips for effective market size measurement
There are no hard and fast rules as to how market size need to be ascertained. Here are some useful tips for companies to determine the size of the market:
- It is important for companies to conduct both primary and secondary research. Primary research explores the specific aspects of a market that are not addressed without interacting with the parties directly involved. Secondary research, on the other hand, identifies criteria or assumptions on which further analysis is based and points out the gaps that require rectification.
- Communicate with different audiences that include manufacturers, suppliers, distributors, and end-users. An important but sometimes overlooked group is that of the industry experts who have significant experience in a given market. They can include regulators or legislative bodies, trade associations, or other industry groups.
- It is important to ensure that all sources are documented so that they can be updated and referred to later.
- Even in the most comprehensive analysis, there might be some gaps in This requires researches to display the confidence to make assumptions and to be explicit to decipher the analysis.
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