ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What Is Market Sizing? The “market size” is made up of the total number of potential buyers of a product or service within a given market, and the total revenue that these sales may generate. It’s important to calculate and understand market size for several reasons.

Detailed explanation-2: -Market Size Definition If you’re rolling out a new brand of shampoo or car, it’s unlikely that you’ll cause people to buy significantly more bottles of shampoo or new cars, so the market size is essentially the existing sales numbers in the industry. Market potential is often used as another term for the same concept.

Detailed explanation-3: -Target or available market – this is the size of the market that your start up business can realistically reach. It’s a subset of the total addressable market, and is sometimes referred to as the Segmented Addressable Market (SAM).

Detailed explanation-4: -That is, how big is the potential market for your company. The relevant market size equals a company’s sales if it were to capture 100% of its specific niche of the market. It is calculated by multiplying the number of prospective customers by the amount they could realistically spend on your product/service each year.