Market Sizing is the process of estimating the potential of a market. Comprehending the potential of a market is essential for companies looking to launch a brand-new service or product. Utilizing a broad range of secondary market of sources and databases, we synthesize results from previously published research along with other data sources to help define: The total size of a market – The major competitors in a market by category – The composition and profile of a target customer – The products\/services available in the market – The most significant trends in the market – Market Sizing Analysis – To estimate the potential of a market we often use a bottom approach breaking the unknown pieces down into granular sets of assumptions and then bring them back up to an overall market size estimate.
Because of the extremely unique nature of every Market Sizing project, they require a lot of consulting and special attention to produce an accurate Market Sizing analysis. Market Sizing Approach – We typically start with a quick estimate a back of the envelope market size estimate that can provide marketers with enough information to decide if further investments in product\/service development even make sense. A second step to the market sizing question involves much more granular analysis. Frequently well develop 2 or more estimates using different approaches. When these approaches triangulate confidence in the estimated market size range is increased. When the approaches provide widely disparate results, we use sensitivity analysis to understand which assumptions are most critical. Additional research or risk reduction is sometimes recommended to narrow down the range of market size estimates. The Value of Market Sizing – Developing a Size of Market estimate is a critical initial step in building the company case for any new product development initiative.