Have you determined market size and value for each segment?
|A.||We have little or no information on market size and value.|
|B.||We have anecdotal information on market size and value for some segments, much of which is assumption based.|
|C.||We have accurate information and analysis on market size and value for some segments.|
|D.||We have accurate information and analysis on market size and value for existing and potential customers in our main segments.|
|E.||We have accurate information and analysis on market size and value for existing and potential customers in all segments.|
|[Score: A=0, B=1, C=2, D=3 and E=4]|
Why is this question important?
Determining market-size is laborious, tiresome, sometimes relatively easy, sometimes quite difficult, but the value it adds to your planning and marketing efforts will almost certainly make the time, money and effort invested in it more than worthwhile.
Define your target market
- The importance of this cannot be emphasised enough. If you don’t know the type of customer you want to serve, you could and almost certainly will waste a lot of time and money trying to get any customers.
- Determining market-size is much easier when you know the precise groups or categories you’re searching for.
- Determine the needs of your target market and how they create demand for your products or services.
- What benefits does your product or service offers your target customers.
- What problem does it help them solve?
Start with a very clear statement about why your target customers need your product.
Identify the information you need to obtain estimate the size of your market
Having identified your target market and clearly understanding the reasons why potential customers demand your product, what information do you need to construct your estimates? For instance if your target market is consumers this might include [among other aspects]:
- The age distribution within your geographic area
- The number of households within your geographic area
- The distribution of family income within your geographic area
- How many competitors, direct and indirect are competing in the same marketplace etc.
Identify the sources you need to obtain that information
So where do you find information about your market? There is any amount of published statistics about almost every industry and market segment, that a combination of library and online research can meet most of your information needs.
In some cases, if you are looking for very specific or specialized information, you may need to conduct your own primary research (surveys, interviews with experts, etc.) to get the information you need.
The CSO (Central Statistics Office), company’s office, directories such as Kompass, Dun & Bradstreet, government publications, industry associations, local chambers of commerce, web sites of each of your existing competitors.
Collect the data
Now that you have identified where to go data ‘mining’, you need to extract and collate the data.
Analyse the data
- What does it all mean?
- What is it telling you?
- Remember to remain objective and to conduct cross-checks where you can.
Determine your market estimate
Now that you’ve compiled and analysed your data, you need to come up with an estimate of market size.
Use your estimate
Estimate how much of the market you can reasonably get based on the competition and other relevant factors.
Remember also that the size and characteristics of your market will help you determine how best to market your services, whether by direct selling, agents, direct mail, networking, or other means.