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market size

Market Size

We have produced global estimates for Fortune 500 companies as well as country and even region level estimates. This has included both existing products as well as new-to-market products and services.

Accurate market sizing can be key to successful business decisions and strategies.

Benefits of Knowing the Market Size 

Market sizing is an essential tool for any business looking to stay competitive and increase their profits.

Fundamentally, having a clear and accurate view of the market size:
•    Clarifies the company's position.
•    Enables businesses to develop strategies to capture a larger share of the market and increase their profits. 
•    Identifies opportunities, both in untapped markets or unexplored areas of existing markets.
•    Enables resources to be deployed effectively to capitalise on opportunities for growth.
•    Enables more informed decisions when it comes to developing products and investing in new initiatives. 
•    Gives organisations 'one truth' that helps end internal debate.  
•    Allows organisations to move forward with confidence.
•    Helps attract investment.

Market Size Information Sources

Market sizing is a flexible methodology and can deliver simple estimates or very precise and detailed market models. 

Desk research can be used to give a 'quick view' of the market size or to sense check market size calculations. However, the amount of public information does vary considerably by industry and by country. Often the 'ideal source' is simply not available, and a view of the market has to be pieced together and cross referenced using multiple sources. 

 

Sources include:
 

Market reports 
•    Trade associations, companies and other sources will publish market reports which can be ideal.
•    These can also be a valuable starting point if the information is not exactly what is needed.


Proxy indicators

  • In other situations, a proxy measure may be the best source. For example, there may not be a published report on the ‘plastic cork’ market, but a report on the wine industry gives a starting point that can then be refined.

  • In other cases, we estimate the market size based on the relative size of country GDP.

  • In some situations, reports from other countries can help build the picture and validate the estimate.

 

Competitors and sales channels

  • Looking at the financial information of competitors and distributors etc. can also be valuable source of market information.

  • In reality, this is an over-simplification as small companies do not need to report their financials and large companies will often be engaged in a range of activities, not just the one of interest. This means a degree of manual adjustment is needed.


Customers 

  • Understanding how many customers there are (whether this is be this specific demographics, number of households, airports etc.) provides another starting point for calculating the market potential.

Calculating Market Size

Market size estimations can be calculated for each company's unique situation, for both products and services.

 

Latest forecasts can also be included to estimate the market size today and what it will be in 3-5 years time. This can be for the market as a whole, or broken down by industry vertical and by product / service category.  

Our methodologies include top-down market sizing (where we calculate market size by using a big-picture view of the market and then whittle it down to the specific country or region) and bottom-up market sizing (where we calculate the market size by multiplying a single product or service by the number of potential buyers in the market). 

Normally, a combination of both methods are used to develop and sense check sensible estimates. 

 

Depending on your industry, we customise and combine approaches for best results, drawing on global and local information sources as well as support from our network of local experts.

​Top Down Method

This is where a 'big picture' view of a market is used as a starting point and a series of filters are applied to give an estimate for the specific market.

A simple example of this is taking a global market estimate and splitting it to a country estimate based on GDP. 

Market sizing - top down method

Bottom Up Method

This uses the reverse approach, building up the estimate from the lowest point where the product can be used.

 

For example, if a product is sold into hospitals we could start with the number of hospital beds. We then multiply the potential per bed by the number of beds.

Market sizing - bottom up method

If you would like to know more or have a project in mind, please get in contact. We will be happy to help. 

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