How to estimate market volumes

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Before launching a business or project, it is necessary to understand how many people can theoretically use it. To do this, marketers resort to various methods, including PAM, TAM, SAM and SOM. Alexey Leibov, Director of Demand Generation at CAST AI, explained what these metrics are and how to work with them.

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Content:

Why Estimate Market Size
Where to get market information
Calculation examples
What is PAM
What is TAM
What is SAM
What is SOM


How to estimate market volumes
Estimating market size is an important step in strategic armenia whatsapp number data planning for any business. It helps to understand how big the demand for a product or service might be, identify potential growth opportunities, and develop an effective marketing and sales strategy.

To analyze the market you need to know four parameters:

how many companies (for B2B) or people (for B2C) are there in your niche;
how many of them could potentially benefit from your product;
how many are already using your competitors' products;
how many will actually want to buy your product.
These are PAM, TAM, SAM, SOM — four metrics that characterize the capacity of any market. They can be calculated in two ways:

In money: how much money you can potentially earn.
In pieces: what volume of products can be delivered to the customer.
It is important to base your calculations on the number of companies or people, but at the same time, you need to analyze potential purchases. Because the fact that there are people in your niche does not mean anything. They may simply not want to buy the product.

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