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Defining Market Opportunity—You Be the Judge

by Kevin Horne  |  
January 19, 2010

The business and marketing news during the past many months hasn't exactly been pleasure reading. Revenue shortfalls, negative profits, layoffs, bankruptcies—you could be excused for focusing your attention on some mind-numbing reality TV.

Maybe it's me, but for some strange reason I see some interesting "stories behind the stories." And it is there that marketers could revisit some fundamentals about one of the most important elements of marketing strategy: defining market opportunity.

At its core, market opportunity is your sizing forecast for a specific product or service, now and over the next several years. At a minimum, you should know that information in terms of sales dollars.

For example, "The market opportunity for netbooks is $x billion and is expected to grow at y% per year for the next z years." Ideally, you would also have a quantitative handle on your projected market share and profitability when defining your opportunity.

As I skimmed the news over the past year, I often wondered whether businesspeople were thinking about the market in that context. Let's look at some examples.

When the government reported retail sales data for last February, the stock market swooned. Wall Street, as you know, is priced on expectation, and when reality doesn't match, share prices adjust accordingly.

Economists, who don't ever seem to be right (and are never fired for it), thought retail would be flat in February. They ended up missing widely, like the 6% decline in appliance sales.

What drives appliance purchases? Among other things: new home sales, new renters, movers, and replacement of old appliances, etc. All those drivers were down significantly, of course. How could smart economists have misjudged the "opportunity" for the appliance market?

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Kevin Horne is an independent marketing strategist working with advertising agencies and interactive firms in NYC. His blog can be viewed at

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