- Information
- AI Chat
Type of marketd - Case Study
Marketing Management (2020)
Hebron University
Recommended for you
Preview text
Total Available Market (TAM)
Definition: Total Available Market
Hebron University
MBA Program
Marketing Management.
To-Prof: Samir Abuznaid.
From: Shireen Al-Qawasmeh.
Subject-
Types of Markets.
Forecasting and Demand Measurement.
Chapter 4
Concluding Marketing Research & Forecasting
Demand.
2
nd
2019-
The Total Available Market refers to the total demand for a product or service across all segments, all possible substitutes or alternatives and via all potential channels i. it is the total demand available to a supplier if they were the only provider of a product or service and no alternatives were available.
In understanding the TAM, it is important to make a distinction from the SAM (Served Available Market) that sits within it. The Served Available Market is the more specific or defined market that an individual supplier will serve – perhaps as a premium supplier; operating through certain channels or offering a particular or niche product within the wider market.
TAM example 1: Hot drinks machines
Imagine a supplier of coffee vending machines for locations such as petrol stations, small supermarkets or sports clubs is looking to understand the size of their market and the future growth opportunity.
Identifying the Served Available Market would require an understanding of the demand for coffee among users of such venues i. the number of venues, the number of users of such venues and the proportion likely to purchase coffee when they are there.
The Total Available Market would extend beyond this to include all types of beverage that could be considered as an alternative to coffee i. hot and cold drinks and all of the different places from which they could be purchased i. café, fast food outlet, other vending machines, chilled counters etc.
SOM or Serviceable Obtainable Market is the portion of SAM that you can capture. 2
Potential Market
Definition: Potential Market
Potential market is the part of the total population that has shown some level of interest in buying a particular product or service. This includes individuals, firms and organizations. Potential market is also called Total addressable market (TAM). 2
A potential market is the part of the market you can capture in the future.
2 The business plan shop, TAM SAM SOM - what it means and why it matters, link: thebusinessplanshop.
2 Marketing dictionary, MBA, business-concepts/,marketing-and-strategy- terms,potential-market, link: mbaskool.
Your potential market includes the demographic groups that are not currently your customers but could become customers in the future. They might become your customers because you expand your available products or services, or because you begin marketing your current products and services in a new way and to new groups of buyers.
Potential Risk
Potential risk refers to any risk associated with an action that is possible, in certain circumstances. A risk refers to a threat or damage that may occur in operations of a business. When a business firm undertakes any operations within a particular industry and in specific markets, they face potential risk. 1
Potential risk could be any type of risk that is possible for a business like systemic risk, arising from systems, or financing risks, due to finance problems, or even operational risks, occurring due to human error and failure of internal procedures of the organization. 2
Example :
- Industries in a capital intensive industry face greater potential risk in finance. For instance – Airlines, shipping industries.
- Industries that depend heavily on human capital face greater potential risk in operations.
1 The definition and concept has been researched & authored by our Business Concepts Team members of mbaskool. Marketing dictionary, MBA, business-concepts/,marketing-and-strategy-terms, Potential Risk, link: mbaskool.
2 Business concepts, operations logistics supply chain terms, potential-risk, link: mbaskool.
determine the places for putting up advertisements and the retail shops where they will stock their product so as attract these potential customers.
Companies also use this metric to calculate the effect on the potential market with the increase or decrease in price as the size of the available market will be affected accordingly. If the price is decreased then some portion of the market which was earlier willing but not capable to buy the product will now be qualified as available.
Target Market
Definition: Target Market
A target market is a group of consumers or organizations most likely to buy a company’s products or services. Because those buyers are likely to want or need a company’s offerings, it makes the most sense for the company to focus its marketing efforts on reaching them. Marketing to these buyers is the most effective and efficient approach. The alternative - marketing to everyone - is inefficient and expensive. 1
Target marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments consisting of the customers whose needs and desires most closely match your product or service offerings. It can be the key to attracting new business, increasing sales, and making your business a success. 2
Qualified Available Market
1 Business encyclopedia, target-market, link: shopify/encyclopedia/target-market.
2 The balance small business, marketing and sales, target marketing and market segmentation, By Susan Ward, Updated June 25, 2019,link: thebalancesmb/target-marketing.
Definition 1: Qualified Available Market the individuals and organizations in a particular market who are interested in a product, can afford it, and who are not prevented from purchasing by any access barrier or legal restriction. 1
Definition 2 :The consumers who have the interest, income, access, and qualifications to buy a particular product or service. 2
Definition 3 : The overarching term for consumers who are interested in a product, can afford it, and who are not prevented from purchasing by any access barrier or legal restriction. Defining the market is the first step in analyzing it. Identifying who the potential consumers will be is based on the knowledge that needs and wants differ. This is where research and where implementing market segmentation is useful in order to better understand and meet those needs and to select the groups within the market that will realistically respond to a brand, product or service. 3
Penetrated Market
Definition: Penetrated Market
Penetrated market refers to the set of customers who is already using a particular product or service. In a penetrated market, users are aware of the product already and most of them are active users. Markets that are not penetrated are called target markets, potential markets or 1 Marketing information Centre , marketing definitions_(Q-R-S), link: http:// marketinginformationcentre/marketing_definitions_(q-r-s).htm.
2 Academic, Big dictionary of business and management, qualified available market, link: manage_en.enacademic.
3 icontact , define qualified available market, link: icontact/define/qualified-available-market.
The below flow illustrates the complete
market definition.
Total Market -> Potential Market -> Available Market -> Qualified Available Market -> Target Market -> Penetrated Market
TiGer
Shireen.I
Type of marketd - Case Study
Course: Marketing Management (2020)
University: Hebron University
- Discover more from:
