Marcus Richards
Market research, acquiring top talent, and developing customer-centric product/service is crucial for any modern business.
Your market size is the main driving factor that distinguishes between two essential things: your position in the available market and the addressable (global) market.
The former is part of the latter and allows you to set realistic business goals. The latter, however, is the total revenue opportunity for your business organization. In other words, knowing your market size allows you to see where your business stands locally and globally.
By knowing these things, you gain insights to determine market concentration by industry and develop a product or service to expand your business into new territories.
However, since there are so many industries today, it’s pretty challenging to determine your exact market size. Here are several tips that will help you with this complicated task and, hopefully, allow you to stay one step ahead of the competition.
Segment your market
Even the largest conglomerates don’t have a full 100% share of the market. Start working on expanding your business by determining the initial pool of consumers, and make sure you fully understand what your target audience wants. This knowledge can help you thoroughly segment your market and define the target subsegments before expanding.
Start sizing your market from the top
The most efficient way to accurately and realistically determine your exact market size is to get the latest updates on the total market for your line of business and the type of product/service. Compare those insights to what you’re currently making, and you should get a clear picture of your market share.
Conduct bottom-up analysis
Determine the highest paying marketplaces for your products/services, as well as competitive offerings that are high in demand and how many marketplaces will stock them. The insights you get from such an analysis could help you set short-term and long-term growth goals.
Compare the facts and figures to the global addressable market to get a realistic business objective. If you’re having trouble understanding the advantages and disadvantages of a specific market, you can rely on the location quotient to determine the most prosperous industries in a particular region and your chances of expansion.
Monitor your competitors
You should know what industries dominate your market and the leading types of enterprises. This knowledge can tell how competitive your industry is and help determine the specific type of product/service that’s high in demand.
If you were the only one to sell a specific service, it’s common sense that you get half of the market share percentage. Naturally, newer industries would have small market shares.
Steps to increase your market share
Here are a few steps that could help you increase your market share.
Tap into the potential of innovation
Whether it’s introducing new technology to your market, production method innovation, or service innovation, innovation can be an incredibly efficient way to beat your competitors and dominate the market.
Make your pricing more competitive
Lowering your prices can help you to expand your market share, attract more consumers, increase revenue, and reach a broader target audience. However, you should lower your prices according to the current events and trends in the market to achieve the result you desire.
Nurture your customer relationships
Always remember to nurture your existing customer relationships. Establishing a loyal consumer base is the best way to increase your market share and get ahead of the curve.
Advertise at all times
Since a business should always aspire toward beating competition, increasing customer satisfaction, and expanding operations, advertising is an effective way to achieve all those goals and increase your market share along the way.
Conclusion
Knowing your place in the market is the only way to accurately determine your market size. You need to set realistic business goals to stay objective about your target audience’s needs and wants and about your product/service.
You don’t want to limit yourself to a market too small for you. That’s why constant market research and analysis are paramount for companies looking to stay relevant and competitive. Expanding into new territories can be challenging, but you can easily conquer it if you know what moves to make and the right time to do so.
