Market Sizing Example

7/22/2019 Market Sizing Example

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MY PROJECTS

HOW TO BEGIN

In order to use the tool, youll first need to research:

The current and potential markets for your product or service

Market Segments

Competitors

For example, lets consider who would hire this Market Sizing Tool, and for what purpose:

Who? What Purpose?

Marketing and Product Development Professionals To confidently forecast th

Entrepreneurs 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

Other products on market sizing (books, articles, online tools, etc.)

Products on different aspects of marketing, product development, or entrepreneurship

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

Start your research by thinking about whos likely to buy your product or service. What job

product or service to perform? In other words, who needs your product to do what?

If youre currently selling other products, its often easiest to start by looking 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, lets start with current customers of this Market Sizing Tool. Who else might fi

have purchased from Harvard Business Review (HBR):

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


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TOP DOWN

Speak English

Hold a senior-level position in their organizations

Live in the United States, Europe, or India (some of Harvard Business Publishings major

WHERE TO FIND YOUR DATA

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?

PLAY AROUND

Copyright 2013 Harvard Business School Publishing

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 behaviorrather than relying on publicly available data.

For example, this Market Sizing Tools potential customers could include all entrepreneurs a

development professionals in the world. That large number can be narrowed down accordin

Often a simple Google search may be the best place to start, whether youre trying to answe

researching data on your competition.

Its also not difficult to obtain data on existing brands. Nielsen and SymphonyIRI Group are t

companies that sell scanner data for mass-market consumer goods. Youll find detailed infor

product category, brand, and individual product SKU (stock-keeping unit).

You can also combine scanner data with retailers 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.

Market sizing is an iterative process. This tool allows you to easily test your assumptions by

assessing the impact on the final calculations.

Start with a large, diverse population and then use a series of qualifying attributes to narroreasonable estimate. These qualifiers will help you identify your potential customers comm

for the product, age, income, geographic location, access to distribution channels, etc.

Other potential customers include people who have never bought HBR products but subscri

HBRs blogs about marketing, innovation, product development, or entrepreneurship. Furth

bought from or visited HBRs website but are members of industry groups focusing on mark


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e growth potential of an existing product or service

duct or service idea is worth pursuing

own:

(e.g., brand building, market segmentation, etc.)

k in pairs or ask a few people to run

ur group use concrete data to test

ent plans.

ould a potential customer hire your

customers. Who among them might

ho are similar to your current

d this product useful? Individuals who

maintain the integrity of the tool, save

r name so that you can calculate your


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arkets)

are the numbers that may warrant

ple, if you find that your estimates

ider buying retail scanner data to

d marketing and product

g to how many of these individuals:

r questions in a top-down approach or

o of many market research

mation on unit and dollar sales by

match actual purchases with

datasometimes for free to the

hanging the values in each field and

your potential market to a moren characteristics, including their need

e to HBRs free e-newsletters or read

r afield are individuals whove never

ting, product development,


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MY DATA

Fill in each field with your data. Mouse over the red corner for a quick explanation.

CURRENT MARKET CUSTOMERS POTENTIAL MARKE

1. Enter # of customers in current market. 2. Enter # of custom

MARKET SEGMENTS FOR POTENTIAL MARKET MARKET SEGMENTS

3. Identify segments for your potential market. 4. Enter each segmeSEGMENT LABEL % OF POTENTIAL MARKET % OF CURRENT 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 UNITS/YEAR

1

2

3

OPTIONAL: add notes regarding your assumptions.

Enter Project Name


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CUSTOMERS

rs in potential market.

FOR CURRENT MARKET

ts % of customers, units and price.AVERAGE UNITS/YEAR AVERAGE PRICE PAID

REVENUE/YEAR


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MY RESULTS

1. MARKET PENETRATION

Total

2. MARKET PENETRATION FOR EACH SEGMENT

3. POTENTIAL MARKET UNITS

0

0

0

0

4. CURRENT MARKET UNITS

0

0

0

0

5. CURRENT MARKET SHARE BY CUSTOMER

#DIV/0!

#DIV/0!

#DIV/0!

Project Name: 0

0

0

0

0

0

0

0

Total

0

0

Total

0

0

0


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6. AVERAGE # OF UNITS AVERAGE PRICE PAID

#DIV/0!

7. BRAND'S AVERAGE # OF UNITS

#DIV/0!

#DIV/0!

#DIV/0!

8. BRAND'S MARKET SHARE OF CUSTOMERS

#DIV/0!

#DIV/0!

#DIV/0!

NOTES:


#DIV/0!

0

0

0

0

0

0


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#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

#DIV/0!

REVENUE

$0

$0

$0

#DIV/0! #DIV/0!

$0

REVENUE

$0

$0

$0

$0

SHARE BY UNITS SHARE BY REVENUE

#DIV/0! #DIV/0!

#DIV/0! #DIV/0!


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MARKET SHARE BY UNITS

#DIV/0! #DIV/0!

#DIV/0! #DIV/0!

#DIV/0! #DIV/0!

PRICE PAID

#DIV/0!

#DIV/0!

#DIV/0!

MARKET SHARE BY REVENUE


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1. MARKET PENETRATION

2. MARKET PENETRATION FOR EACH SEGMENT

0.00%

1. Market Penetration

0.00%0.00%0.00%

2. Market Penetration for Each

Segment

0

0

0


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3. POTENTIAL MARKET

4. CURRENT MARKET

5. CURRENT MARKET SHARE

0

0

0

1

1

1

0 0 0

Units

Segment

3. Potential Market in Units

$0

$0

$0

$1

$1

$1

0 0 0

Revenue($)

Segment

3. Potential Market in Revenue

0

0

0

1

1

1

0 0 0

Units

Segment

4. Current Market Size in Units

$0

$0

$0

$1

$1

$1

0 0 0

Revenue($)

Segment

4. Current Market Size in Revenue

0.00%0.00%0.00%

5. Current Market Share by Customers

0

0

0

0.00%0.00%0.00%5. Current Market Share by Units

0.00%0.00%0.00%

5. Current Market Share by Revenue

0

0

0


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7. BRAND'S AVERAGE UNIT SALES AND PRICE

8. MARKET SHARE BY BRAND

0

0.2

0.4

0.6

0.8

1

0 0 0

AverageUnitSales/

Customer

Brand

7. Average Number of Units Sold by Brand

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

0 0 0

AveragePrice/Unit

Brand

7. Average Price by Brand

0.00%0.00%0.00%

8. Market Share of Customers by Brand

0

0

0

0.00%0.00%0.00%

8. Market Share of Units by Brand

0

0

0

0.00%0.00%0.00%

8. Market Share of Revenue by Brand

0

0

0


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Market Sizing Example

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