For any startup, apart from developing a unique product or hiring the right talent, doing some market research is also very crucial. A part of this market research should include market size analysis. It is very difficult to make money for a startup without any market size analysis. Market size estimation helps to distinguish between two categories, the market that has to be addressed and the available market. The addressable market provides the opportunity for your product or service and the available market is the one for which you compete realistically. If you are able to understand the difference between these two, it can help you to develop a customer specified product offering. Market sizing gives you a sense of key market trends. It can give you the clue of the necessary demand driving products and services and move in the required direction. Moreover, those trends also indicate whether a substitute for your product is on the horizon that could potentially affect your market size. But to achieve the desired result, you need to have proper strategies for market size analysis in place. In this article, we have tried to provide you with such strategies by the help of which you can really stand ahead of your competitors.
Strategies for Market Size Analysis
Define subsegment of the market
Defining the subsegment of your market is the first thing that you should do while doing market size analysis. This helps you to target each segment separately, addressing their needs and demands. Initially, you have zero in your pool of customers and that’s why it is important that you ensure to have the handle on these subsegments before you expand your business.
Conduct top-down market sizing
A top-down analysis can be done by determining the potential of the total market and then estimating your own share in that market. This can help you make strategies according to the market potential and can help you grow in the right direction.
Administer bottom-up analysis
A bottom-up analysis can be done by estimating potential sales in order to determine a total figure of sales. This analysis helps you to evaluate where your products can be sold, the sales of competitive products, and the slice of current sales. Such analysis usually gives much more accurate results.
Analyze the competition
Analyzing the competition is one of the very crucial parts of market size estimation. This helps in analyzing how crowded your industry is and what types of organizations are at the forefront. This also gives an analysis of the list of the competitors with whom you are going to compete in the long run.
Gauge the static market size
If you are going to start in a static market, then you should be ready to face fierce competition. Gauging at the static market size will help you understand how the addressable market size will likely change and thus can aid you to respond to trends positively.