MarketingProfs' Members Register for B2B Forum 2010 for just $695! (good until 11/30) »

Ask your question ... sign up today! It's FREE!
Strategy     
 
This question has been closed, and points have been awarded.
Determining Market Size
Posted By: korlean* on 8/22/2004 8:36 PM (CST) 500 Points
I am currently writing our business plan and need a solution for finding the potential market size for our customer acquisition and financial services solutions. We currently sell electronic check processing solutions to retailers and business to business clients. We also publish an upscale magazine called The "Best of Long Island that we plan on expanding to other markets. This lifestyle magazine reaches upscale consumers who can afford to purchase products and services from our upscale advertisers. I need to find the size of my local market and the national market.

Posted by: ASVP/ChrisB Member Response
8/22/2004 9:27 PM (CST)
This sounds like two questions in one.

To determine the potential market size for check processing by retailers and b2b prospects, you need to have defined the geographic territory into which you are planning to sell these services. Let's assume you are talking Eastern Long Island... You can probably get statistics from the NY State Sales Tax office on number of businesses registered. Or try the local chambers of commerce - although that may involve quite a few calls to a number of organisations in each town. Failing that see if the Federal Bureau of Statistics (or whatever they are called) has statistics by zip code you can access.

Second part - the potential size of the local and national market for an upscale magazine - isn't it mainly going to be of interest to inhabitants of LI? Plus those fortunates with weekenders in the Hamptons, etc? You need to access statistics on the number of people or households with an income in your target range within the zip codes you plan to serve to be able to estimate this. Fed Bureau of Statistics again... You might also look at the circulation of comparable magazines to see what they are achieving as you will be catering to the same market.

Just a thought, but so many companies seem to be targeting HNW's (High Net Worth People) - you may find a massively broader market lower down the marketing pyramid, with a conseqently larger prospective base of potential advertisers.

Just my 2 cents worth.

Hope this helps.

ChrisB
 
Posted by: Mushfique Manzoor Accepted Answer
8/23/2004 7:14 AM (CST)
Hi korlean

CrisB gave great solutions in terms of US/NY. here are my 2 dime in a more generalistic terms.

for e-Check processing solutions

- first determine the geographic area you want to serve.
- then take help of the local Statistics Office/Chamber of Commerce to get the entire population of businesses that fall in your category and make list.
- Find out the existing customers you have from this list
- Find out the cusotmers who are using your competitors service/ no service at all. thats the max incremental potential customer for you.
- Find out the average frequency of purchase of your-type service per customer.
-Multiply that frequency with no of non-customers. This will give you potential new business.
- find out the frequency and total no of purchase from other companies by customers. This is your ready potential business to capture from other companies.

for upmarket magazine, both local and national

- find out the income group of the target customers and from Statistics Dept get the total household of that income & target group.(both local and national)
- look at the circulation of all other competition as well as magazines that cater to your same target as well as income groups.
- combined circulation of all magazines(incl urs) is the potential market.

hope this helps.

cheers!!
 
Posted by: thinkmor Accepted Answer
8/23/2004 8:52 AM (CST)
Hi Korlean

You can try to find market size, market share by:

Accessing past corporate annual reports from your competitors as a quick start.
You can access some online too using http://www.reportgallery.com - gives you 2,200 annual reports.

Standard & Poor's Industry Surveys - print source, defined broadly. Available at many librabry and university libraries.

American Tally Statistics & RAnkings for 3,165 US Cities - reference demographic, sociological and economic stats. Not every city is included. Available at many librabry and university libraries.

Hoovers is excellent for basic directory and financial info on more than 13,500 companies for free but specific info you will need to subscribe for.

http://www.hoovers.com/company-information/--HICID__1345--/free-ind-factshe...

Subscription sites:

TableBase-allows search for info in table and charts of journal articles. May include summary stats about companies,markets, industries, consumer behaviour, rankings, forecasts, market shares, products and product sales.

http://www.galegroup.com/servlet/ItemDetailServlet?region=9&imprint=000&tit...

Investext - subscription contains full text investment reports for more than 11,000 US & International companies and for 53 industries.
http://www.tfsd.com/products/analyst/default.asp


http://www.financial-insights.com/doc.asp?docid=1484

Hope these help.
 
Posted by: mjklanac* Member Response
8/23/2004 10:38 AM (CST)
When in doubt keep it simple.

Define your market geography.
Define the variables you need to identify people in your po-market.
Define the places to gather that information.
Calculate.

The key word is aggregate.
 
Posted by: jstiles* Member Response
8/23/2004 12:14 PM (CST)
You have recieved some great advice so far. I would add that the census.gov site has a lot of free data by various geographies that would help you develop a general size perspective of your target.

You could also contact a data company like Claritas to run an off-the-shelf custom report at relatively small cost. D&B and InfoUSA also provide such report services and may also be able to pull a targeted mail list for you.

Best of luck.
 
Posted by: Peter (henna gaijin) Member Response
8/23/2004 7:28 PM (CST)
I agree with what others have said already. Particularly in that you are really working with 2 very different products (electronic check processing solutions and the magazine). You really need to work these as separate businesses, with separate plans.

One challenge people often have after they determine the market size is determining what share they feel they can get. Often this shows up in people being way too optimnistic ("everyone could use our product").

The numbers I have pretty consistently heard is that you should shoot for betwen 3 and 30% of the potential market. If you feel you can get more, you will likely be disappojnted. If you feel less, you probably have defined your market too broadly, so should redefine it as more of a niche until you are in that range.
 
Posted by: Carl Crawford Member Response
8/25/2004 3:41 AM (CST)
hi korlean

www.va-interactive.com/bankofamerica/resourcecenter/workshops/competition/c...

hope this helps

Sweetasman01
 
Posted by: jose04 Member Response
8/27/2004 7:08 AM (CST)
Hello Korlean

Great advice above!
In addition...

Calculating market size is an estimate. You need to ensure that the estimate is documented. Establishing a documentation system in the long run will be sensible. You could collect facts based on issues like the time frame for the forecast, the geographic markets covered, whether the market size is based on production or consumption, sources of data (secondary, competitor interviews etc), Units of measurement (currency involved, units etc), the break up of size calculations for each product category related to your check processing units), the size break up between retailers, B2B. Collecting such facts will get you confidence in the estimates made.

As the market size calculation is a fundamental measurement based on which all other company activities (sales and marketing expenses, R&D expenses etc) are measured, the emphasis on the truth factor is a must. Most strategies set for the future will be based on trustworthy Market size estimates.

For the upscale mag, the advice by other experts seem quite sufficient.

Hope these thoughts help!!
 


Get more answers ... ReTweet this!

Would you like to post a response?
Welcome to Know-How Exchange!
This is a collaborative community. We welcome everyone's participation.
All you need to do is login. Enter your account info in the box above (top right).
Not a member? Not a problem. Register here (it's FREE and EASY).




Know-How Exchange powered by MarketingProfs


Sponsored Links

Buy a Link Now

Just Released ... Download Today!
Just Released ... Download Today!
Look inside
Included with Premium Membership
User Name:
Password:
Remember Me
Forgot your password?

Top 25 KHE Experts
(Strategy)
ASVP/ChrisB (39143)
Jay Hamilton-Roth (36484)
mgoodman (31658)
mbarber (28529)
Frank Hurtte (24822)
W.M.M.A. (24343)
telemoxie (24010)
CarolBlaha (20554)
wnelson (18695)
Peter (henna gaijin) (16342)
NuCoPro (16053)
michael (15775)
stevea (13066)
thinkmor (10820)
SteveByrneBranding (9826)
PhilGrisolia=Results (9649)
Puru Gupta (8760)
Deremiah *CPE (8318)
Wiglaf (8292)
SRyan ;] (7862)
darcy.moen (7712)
Pepper Blue (7080)
Gary Bloomer (6359)
Mikee (6119)
Michele (5978)
Recently Posted Marketing Jobs
Director of Marketing and Communications
Demand Generation Manager
Marketing/Advertising Faculty
Director of Marketing
Market Analyst
Sr. Field Marketing Manager - Business Intell.
Associate Vice President of Marketing and Corporat
Marketing Manager
[more jobs]

Join over 355,000 members ... SIGN UP!

My email address is and I'd like my password to be .

Already a member? Sign In!

My email address is , and my password is .


HACKER SAFE certified sites prevent over 99.9% of hacker crime.