How to calculate market size

The volume of the market is the indicator telling you how much goods or services consumed in a geographical area per unit time. The concept of "volume" of the market is often confused with its "capacity", the difference being that the capacity is evidence of effective demand, the volume of really sold products or services.

Instruction

First you need to define the geographic area described by the market (or segment) and sources of information – as a rule, the results of surveys, studies, expert opinions, statistics etc. Determine the period of time that will be (usually the month, quarter or year) and the units in which you will measure the volume of the market. Can be in pieces or litres (when it comes to certain groups of goods), but rather in monetary units.

Evaluate possible sources of information and collect in sufficient for your needs, the amount of opinions of experts, statistics, survey data. You need to find the most accurate and, most importantly, check the data. In some cases, will have to do analytical work, comparing the disparate pieces of information and bringing all data into a common format (say, in rubles). There may be a number of difficulties, for example, the amount of market goods in General easier to calculate than market services. Also much easier to estimate the amount of the market or a sector in General, the volume of the market of a single product or (especially) services; in this case, most likely you will have to resort to methods of indirect assessment.

The resulting "raw" data you need to present several important indicators. The first is the total volume of the market in a given time interval, the dynamics of its changes in two or three preceding time interval and the forecast or trend the next. The second is the distribution of the total volume between territories, as a rule, show the share of large cities in the total volume), their dynamics and trends. The third indicator is the volume distribution of the market between the leading players (and therefore how varied their share in the past, what is the prognosis). The fourth – largest selling products or product groups and their share, respectively, the dynamics and prognosis. And finally, the fifth indicator (it is not necessary, because it requires a separate study, but very significant) – the ratio in the total volume of the market and its capacity.

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