Market Sizing
Evaluating the
Opportunity
School of Management
Strategy & Innovation Department
It’s the most common engagement
question Cricket is huge in
• How large could this
market be?
• No known data
source
• Limited awareness of
the need
• Market doesn’t exist
yet
India and the UK .
How large is the
market in the US
Sales Funnel – TAM SAM SM CM
• Total Available Market
– Affected Population
TAM
• Served Available Market
SAM
– With the need
• Served Market
SM
– and capability to buy
• Covered Market
CM
X
– covered by Sales Channel
USAGE
Page 3
Start with what you know
• Population
–
–
–
–
US
EU
BRIC
Indonesia
• Volume Weight
– Gallon of Water
– Liter of Water
• Round the numbers
so that they’re easily
divisible by ten.
• Current Prices
• Relative Size
What is the total Available Market for
Cricket Balls in the United States?
Total Available Market
• What Questions did
you ask?
• How did you
determine the number
of people that might
potentially have the
need?
• Did you round it to
300 million not 313.9
million
Of the 300 million residents how many
of them have a need?
Served Available Market
• What Questions did
you ask?
• Did you use an
elimination technique
or work from an
assumption up?
• Did you note your
assumptions clearly?
Of the 1 million residents how many of
them have the capability to buy?
Serve Market
• What Questions did
you ask?
• Does the price of a
cricket ball make a
difference?
• Did you note your
assumptions clearly?
Why do you treat Need (want)
before the Capacity to buy?
• Path dependency
• Greater degrees of
freedom
• Treat pricing as a
distinct assumption
and avoid
simultaneous
equation
Assessing the critical role of channel of
distribution?
Covered Market
• What Questions did you
ask?
• Sales Logic –
Customers will not buy:
– That which they don’t
know (build awareness)
– That which they can’t
physically get (channel)
• Did you note your
assumptions clearly?
Existing Market case questions often
hinge on USAGE
USAGE
• What Questions did
you ask?
• Replacement logic
• Churn logic
• Recidivism
• Did you note your
assumptions clearly?
What did you
conclude?
The size of the cricket ball market in the
United States is _____________