Market Sizing Example
Short Description
marketing 2...
Description
MY PROJECTS
Using this tool with colleagues can be more helpful than using it alone. You may want to wo the analysis by themselves. Then come together to compare the results. The tool will help y hypotheses and more-objectively come to consensus about marketing and product develop Important Note: Any changes you make to this file are permanent once you save the file. To it to your desktop. Then, when you are ready to run an analysis, immediately save as anothe HOW TO BEGIN In order to use the tool, you’ll first need to research: · The current and potential markets for your product or service · Market Segments · Competitors Start your research by thinking about who’s likely l ikely to buy your product or service. What job
product or service to perform? In other words, who needs your product to do what? For example, let’s consider who would hire this Market Sizing Tool, and for what purpose: Who? What Purpose?
· · Mar Marke keti ting ng and and Pro Produ duct ct Dev Devel elop opme ment nt Pro Profe fess ssio iona nals ls · Entrepreneurs
· · To To conf confid iden entl tlyy fore foreca cast st th th · To determine if a new pr
Two ways to start thinking about your potential market are from the bottom up or the top d BOTTOM UP If you’re currently selling other products, it’s often easiest to start by l ooking at your current find this new product useful? Build up your forecast from there. Think about other people w customers, including those who are in market segments adjacent to those you already serve For example, let’s start with current customers of this Market Sizing Tool. Who else might fi
have purchased from Harvard Business Review (HBR): · Other products on market sizing (books, articles, online tools, etc.) · Products on different aspects of marketing, product development, or entrepreneurship
Other potential customers include people who have never bought HBR products but subscri HBR’s blogs about marketing, innovation, product development, or entrepreneurship. Furth bought from or visited HBR’s website but are members of industry groups focusing on mark
TOP DOWN Start with a large, diverse population and then use a series of qualifying attributes to narro reasonable estimate. These qualifiers will help you identify your potential customers’ comm for the product, age, income, geographic location, access to distribution channels, etc. For example, this Market Sizing Tool’s potential customers could include all entrepreneurs a
development professionals in the world. That large number can be narrowed down accordin · Speak English · Hold a senior-level position in their organizations · Live in the United States, Europe, or India (some of Harvard Harvard Business Publishing’s major WHERE TO FIND YOUR DATA Often a simple Google search may be the best place to start, whether you’re trying to answe researching data on your competition.
Consider this question to help focus your search: Is your product or service meant for: ·Established or emerging markets and which ones, specifically? ·A well-known mass-market segment or a unique customer niche? ·B2B or B2C customers? It’s also not difficult diffi cult to obtain data on existing brands. Nielsen and SymphonyIRI Group are t companies that sell scanner data for mass-market mass-market consumer goods. You’ll find detailed infor
product category, brand, and individual product SKU (stock-keeping unit). You can also combine scanner data with retailers’ re tailers’ proprietary customer-shopper-card data t
customer demographics such as gender, age, household composition, and zip code. Industry associations’ websites and online trade journals also provide demographic and sale
public and sometimes only to members or subscribers. PLAY AROUND Market sizing is an iterative process. This tool allows you to easily test your assumptions by assessing the impact on the final calculations.
Play around with the tool to identify the assumptions that move your needle the most. Thes more precise estimates, requiring a greater investment of your time and/or money. For exa are sensitive to assumptions about how many units an average customer buys per year, con confirm this customer behavior—rather than relying on publicly available data.
Copyright © 2013 Harvard Business School Publishing
k in pairs or ask a few people to run ur group use concrete data to test ent plans. maintain the integrity of the tool, save r name so that you can calculate your
ould a potential customer “hire” your
e growth potential of an existing product or service duct or service idea is worth pursuing own:
customers. Who among them might
ho are similar to your current
d this product useful? Individuals who
(e.g., brand building, market segmentation, etc.)
e to HBR’s free e-newsletters or read r afield are individuals who’ve never ting, product development,
your potential market to a more n characteristics, including their need
d marketing and product
g to how many of these individuals:
arkets)
r questions in a top-down approach or
o of many market research mation on unit and dollar sales by
match actual purchases with
data—sometimes for free to the
hanging the values in each field and
are the numbers that may warrant ple, if you find that your estimates ider buying retail scanner data to
MY DATA Fill in each field with your data. Mouse over the red corner for a quick explanation. Enter Project Name CURRENT MARKET CUSTOMERS 1. Enter # of customers in current market.
POTENTIAL MARKE 2. Enter # of custom
MARKET SEGMENTS FOR POTENTIAL MARKET 3. Identify segments for your potential market.
MARKET SEGMENTS 4. Enter each segme
SEGMENT LABEL
% OF CURRENT MARKET
% OF POTENTIAL MARKET
1
1
2
2
3
3
BRAND 5. Identify other brands that compete in your market – including your own. BRAND COMPETITION
# OF CUSTOMERS/YEAR
1 2 3
OPTIONAL: add notes regarding your assumptions.
UNITS/YEAR
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CUSTOMERS rs in potential market.
FOR CURRENT MARKET t’s % of customers, units and price. AVERAGE UNITS/YEAR
REVENUE/YEAR
AVERAGE PRICE PAID
MY RESULTS
0
Project Name: 1. MARKET PENETRATION Total 2. MARKET PENETRATION FOR EACH SEGMENT
0 0 0
3. POTENTIAL MARKET
UNITS
0 0 0
0 0 0 0
Total 4. CURRENT MARKET
0 0 0 Total 5. CURRENT MARKET
0 0 0
UNITS
0 0 0 0 SHARE BY CUSTOMER
#DIV/0! #DIV/0! #DIV/0!
6. AVERAGE # OF UNITS AVERAGE PRICE PAID
#DIV/0! 7. BRAND'S AVERAGE
0 0 0 8. BRAND'S
0 0 0
#DIV/0! # OF UNITS
#DIV/0! #DIV/0! #DIV/0! MARKET SHARE OF CUSTOMERS
#DIV/0! #DIV/0! #DIV/0!
NOTES:
Copyright © 2013 Harvard Business School Publishing
#DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
REVENUE
$0 $0 $0 $0 REVENUE
$0 $0 $0 $0 SHARE BY UNITS
SHARE BY REVENUE
#DIV/0! #DIV/0! #DIV/0!
#DIV/0! #DIV/0! #DIV/0!
PRICE PAID
#DIV/0! #DIV/0! #DIV/0! MARKET SHARE BY UNITS
#DIV/0! #DIV/0! #DIV/0!
MARKET SHARE BY REVENUE
#DIV/0! #DIV/0! #DIV/0!
1. MARKET PENETRATION 1. Market Penetration 0.00%
2. MARKET PENETRATION FOR EACH SEGMENT 2. Market Penetration for Each Segment 0.00% 0 0 0
3. POTENTIAL MARKET 3. Potential Market in Revenue
3. Potential Market in Units 1
$1
1
) $1 $ ( e $1 u n e $0 v e R$0
s t 1 i n U0
0 0
$0 0
0
0
0
0
Segment
0
Segment
4. CURRENT MARKET 4. Current Market Size in Revenue
4. Current Market Size in Units 1
$1
1
) $1 $ ( e $1 u n e $0 v e R
s t 1 i n U0
$0
0
$0
0 0
0
0
0
0
0
Segment
Segment
5. CURRENT MARKET SHARE 5. Current Market Share by Customers
5. Current Market Share by Revenue
0.00%
0.00%
0
0
0
0
0
0
5. Current Market Share by Units 0.00%
0 0 0
7. BRAND'S AVERAGE UNIT SALES AND PRICE 7. Average Price by Brand
7. Average Number of Units Sold by Brand $1.00
1
t i n U$0.80 / e $0.60 c i r P e $0.40 g a r $0.20 e v A
/ s e 0.8 l a r S e 0.6 t i n m U o t 0.4 e s g u a C r 0.2 e v A 0
$0.00
0
0
0
0
Brand
0
0
Brand
8. MARKET SHARE BY BRAND 8. Market Share of Customers by Brand
8. Market Share of Units by Brand
0.00%
0.00% 0
0
0
0
0
0
8. Market Share of Revenue by Brand 0.00% 0 0 0
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