Market size may be defined as the amount of people who are potential buyers and/or sellers for a certain product. Market size research is important and companies conduct it before releasing a new product in order to see how many people would be interested in it.
In order to get the most accurate results, market size research may last longer than it is wanted. As the consequence of the prolonged research, the competitor may launch the same product and get the customers’ attention first.
So, the aim is to have high quality research with credible results and to get it done relatively fast, while the product remains its significance.
Depending on the product, different levels of accuracy may be required. Sometimes is enough to do a rough research but other times it needs to be very detailed.
Different market sizes
Not all the products have the same interest group. Market sizes may significantly vary.
Having large market means there are many people who would by certain product; however, large market usually means having a lot of competition, so there is always a race between competitive companies in offering the best possible terms (price, quality etc.)
Small market, on the other hand, means less competition but also less potential buyers. If company applies smart marketing techniques and target the market properly, it often has the chance for a great success.
Targeting is the technique widely used in promoting the product. It helps the company determine who their perfect client is and how many of those clients can they count on. For example, if the company plans to launch new kitchen pots set, the targeted group are housewives of certain age from certain area. Of course, proper targeting is more complicated than this example, but the main idea is there.
Without calculating, or at least roughly estimating the market size there is no way to know if the product could be sold or not. There are many examples of people thinking that something would sell a lot, and it didn’t. Also, many times some non-promising products showed up to be bestsellers. Research isn’t almighty and it can not give 100% accurate results, but it will get the company as close as possible to the real selling situation and help lower the risk of producing large quantities of a product that won’t sell good.