Personally, our team uses Restream for conferences and broadcasts , but all the other services on this list are also worth your attention. When launching a new product, diversifying your offering, or entering new regions, it is critical to have a clear understanding of the market potential. Making important, costly decisions requires extensive knowledge, and you must use all available tools to fully assess the potential market size. Why is it necessary to determine market size? When a company decides to expand, launch a new product, or offer its services in new locations, it is taking on a significant financial risk.
For this reason, companies go through a market sizing process twitter datatwitter data that involves understanding the overall potential market size and what share they can hope to capture of it. How to calculate market size Market sizing involves a lot of metrics: If you’re even slightly familiar with market sizing, you’ve probably heard the terms TAM, SAM, and SOM. We use Similarweb to determine market size . Here, we’ll dive into what each of these means and how to calculate them using bottom-up analysis that takes into account a variety of variables that affect market value.
Total Addressable Market (TAM) looks at the entire potential value of a market (think, for example, of the total value of toothbrush sales in the U.S. in a given year). This is a huge number, and unlikely to be achieved by a single company (unless it is a monopoly). TAM can provide a basis for assessing the potential and stability of a market. Calculate TAM by adding up all the product sales in the market. There are two ways to do this: ) add up the toothbrush sales figures for each grocery, drugstore, and retail chain, and ) estimate the number of toothbrushes the average person buys, multiply that by the number of people in America, and then multiply that by the average price of a toothbrush.