Getting your arms around it

January 8, 2014


I was talking the other day to a friend who raised the question of how to get an idea of the size of the market in which their firm operates. The market is not so large or so trendy that there are a half a dozen syndicated research reports easily available.

To compound the problem, she indicated that there were two estimates of the size of the market: one from a trade magazine covering this market and half a dozen adjacent markets, and a second from a research service (reputation unknown to her) that publishes a multi-thousand dollar study every several years. The estimates of the gross size of market differed by 100% between them.

The first thing we explored was why the difference. The most likely reason is that the smaller estimate deals with sales by the businesses in this market to distributors and retailers and the second deals with the retail sales of the same products. An alternative is that the smaller study deals only with a select group of manufacturers and not the entire market space. Yet another issue may be how the two sources define the “market”. As it turns out there was a small but growing electronic segment which “traditional” participants in the market consider separate and do not generally aggregate when talking about the “market”.

From here, the only options are to contact the publication and talk to the vendors of the study.

The second thing we explored with how to figure this out without spending a lot of money, i.e., not buying the study, what to do if there are no studies. Here, there are several fairly good options:

  •      The first is to buy back issues of the trade magazine reporting on the market and read them to understand its exact definition of the market as well as its methodology.
  •      The second is to contact the magazine and obtain an advertising kit for the publication. From time to time these kits will actually include information on studies or surveys the publication has done to show potential advertisers not only the magazine’s grasp of market space but also the importance of the market the magazine serves.
  •      The third is to determine if there is somewhere a trade association that covers this market space. The odds are the trade association covers this market space and many more, but may have research materials available to its members, and occasionally the public at large, on this particular market.
  •      A fourth is to search for U.S. Department of Commerce studies and surveys about retail and wholesale markets. This is a bit of a longshot as those studies tend to encompass more rather than less and also tend to be anywhere from 2 to 5 years old.
  •      The fifth is to search for a research center or even an academic studying this market space. Occasionally such resources will do their own research which may be valuable to look at, if they let you.


In any case, to generate your own “horseback” estimates, it may be necessary to assemble a bit from here and a bit from there to get a partial look at a market space.

Here is where a real problem arises for those not comfortable with competitive intelligence: they tend to look at their results and say that they are incomplete, they are partial, they are only estimates, they cover a range, or something similarly negative. What they forget is the starting point was they knew virtually nothing about the market space; now they know something, and they also know where their blind spots are.

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