Market Size. Market size is a measurement of the total volume of a given market. When determining market size, it is very important to define the measurement as precisely as possible. A statement like, "The market for recorders is over $100 million per year," leaves a lot to be desired. What is wrong with that statement? Just like engineering, when monitoring or measuring a dynamic variable, the measurement must be well defined and all external variables considered. For example, if you were testing a jet engine for its vibrational characteristics, you would not just document the vibration level of the engine during operation. In a test of this nature you might also like to note the status of other parameters such as: Engine speed Fuel mixture Wind speed Wind temperature Time Oil temperature Weather conditions Altitude It is obvious that fluctuations in these measurement variables could influence the engine's vibrational dynamics.
What is the time period? One year (usually assumed) Six months One month. 2012 SEO & Inbound Marketing Outlook. Calculating the Growth Rate [The Fool Ratio] Forecasting Revenue | ontigio.com. Top Down Approach A top down approach starts with a macro view of the industry and refines the inputs to estimate revenues. The inputs used are the size of the industry, the expected growth rate, the market share of the company and the expect growth rate of the company’s market share.
The advantage of this method is that it can be done more quickly as there are fewer figures to deal with. An intimate understanding of the drivers is not required as you’re simply looking at the industry as a whole and forecasting it based on general trends. The downside of course is that it’s hard to determine where the sources of growth are.
ExampleAn IT company’s market share stands at 10% of a $1bn market. Bottom-up Approach A bottom-up approach starts with a micro view of the business that is built up to estimate revenues. The bottom-up approach can in theory yield more accurate numbers and allow an analyst to quickly see how minor changes in assumptions can affect revenues. What method to choose? Steps. When was the last time you did something for the first time? - Eastpak.
Guerilla Marketing.