Market Target Plan
Industry & Location Targets
Overview
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Market Defined
The marketplace for retail analytics software is robust and dynamic, driven by the increasing need for retailers to leverage data for competitive advantage. Our current offering will continue to be most appealing to brick-and-mortar retailers that utilize an in person one-to-one sales process.
Primary Sector – Wireless Retails North America
- Verizon Independent Dealers xxx With more than xxx locations
- Verizon Corporate Retail Locations 6,227
Expansion Sector – Mattress Retailers
- Brands xxx With more than xxx locations
- Corporate Retail Locations 6,227
Strategy Overview
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Addressable Market Data
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Determining our Market Targets
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Market Sizing
Market sizing refers to the process of estimating the potential sales revenue and demand for a particular product or service within a specific market or industry. For a sales organization, market sizing is a crucial aspect of strategic planning and decision-making. Here’s a methodology for evaluating the market size for a product:
- TAM refers to total potential revenue or sales opportunity available for a product or service within a specific market of industry. In other words, TAM represents the maximum amount of demand that exists for a particular product or service.
- SAM the portion of the TAM that a particular company or business can realistically target and serve with it’s products or services.
- SOM the portion of the SAM that a company can realistically capture and generate revenue from, given it’s marketing and sales efforts, pricing strategies, competitive landscape, and operational constraints.
Segmentation
Market segmentation is the process of dividing a heterogeneous market into distinct and homogeneous segments based on certain characteristics, needs, behaviors, or demographics. The goal of market segmentation is to better understand and respond to the diverse preferences of various customer groups, allowing businesses to tailor their products, services, and marketing strategies to meet the specific needs of each segment. By recognizing that different customer segments may have unique requirements and preferences, companies can optimize their resource allocation, refine their messaging, and create more targeted and effective marketing campaigns. This approach enhances overall customer satisfaction and facilitates a more efficient use of resources, ultimately contributing to a more successful and customer-centric business strategy.
Buyer Personas
A customer persona, also known as a buyer persona, is a detailed and semi-fictional representation of an ideal customer for a business. Developed through market research, customer interviews, and analysis of demographic and psychographic data, a customer persona goes beyond general target audience demographics to include specific details about the individual’s preferences, behaviors, and motivations. It typically includes information such as age, gender, occupation, goals, challenges, interests, and purchasing patterns. The purpose of creating customer personas is to humanize the target audience, allowing businesses to better understand and empathize with their customers. By having a clear and vivid picture of their ideal customer, companies can tailor their products, services, and marketing strategies to effectively meet the needs and expectations of specific customer segments, ultimately improving customer engagement and satisfaction. Customer personas serve as valuable tools in guiding decision-making across various business functions, ensuring that efforts are aligned with the desires and characteristics of the intended audience..
When a software company is trying to size their addressable market, there are several key considerations to take into account. These factors ensure a comprehensive and realistic estimation, which is critical for strategic planning, fundraising, and growth projections. Here are the primary considerations:
- Market Definition:
- Industry and Sector: Clearly define the industry and sector the software targets. For instance, is it healthcare, finance, education, etc.?
- Geographic Scope: Determine if the market is local, regional, national, or global. Different regions may have varying market potentials.
- Market Segmentation:
- Customer Segments: Identify and segment potential customers based on relevant criteria such as size (SMEs vs. large enterprises), industry, or specific needs.
- Use Cases: Determine the different use cases your software addresses. This helps in understanding how many businesses or individuals could benefit from your solution.
- Total Addressable Market (TAM):
- Top-Down Approach: Use industry reports, market research, and publicly available data to estimate the overall market size. For example, if the global market for a certain type of software is $50 billion, this figure can be a starting point.
- Bottom-Up Approach: Estimate the TAM by calculating the potential revenue from all customers. This can involve multiplying the number of potential users or businesses by the average revenue per user (ARPU).
- Serviceable Available Market (SAM):
- Target Customer Base: Narrow down the TAM to those customers that you can realistically reach with your sales and marketing efforts.
- Geographical and Demographic Constraints: Consider limitations such as language barriers, regulatory environments, and infrastructure availability.
- Serviceable Obtainable Market (SOM):
- Market Share: Estimate the portion of the SAM that your company can realistically capture, based on competition, market penetration strategies, and your company’s capabilities.
- Competitive Analysis: Analyze competitors’ market share, strengths, and weaknesses to gauge the likely share your product can achieve.
- Customer Needs and Pain Points:
- Value Proposition: Understand the specific needs and pain points of your target market to better assess the demand for your software.
- Market Trends: Keep abreast of industry trends, emerging technologies, and changing customer preferences that could impact market size.
- Market Growth Rate:
- Historical Growth Data: Analyze historical data to understand past market growth.
- Future Projections: Use industry reports and expert analyses to estimate future growth rates. Consider factors such as technological advancements, regulatory changes, and economic conditions.
- Regulatory and Compliance Factors:
- Legal Requirements: Identify any regulations or compliance issues that could impact market size, such as data privacy laws or industry-specific regulations.
- Market Barriers: Understand any barriers to entry that could affect your ability to capture the market.
- Distribution Channels:
- Sales Channels: Consider the effectiveness of different sales channels (direct sales, online sales, partnerships, etc.) in reaching your target market.
- Marketing Channels: Evaluate the reach and cost-effectiveness of various marketing channels to promote your software.
- Technological Adoption:
- Adoption Rates: Assess the technology adoption rates within your target market. Some sectors may be slower to adopt new technologies than others.
- Infrastructure Readiness: Ensure that the necessary technological infrastructure is in place for your software to be used effectively by potential customers.
- Economic Factors:
- Economic Conditions: Consider the overall economic environment, which can affect business spending and investment in new software.
- Pricing Sensitivity: Understand how price-sensitive your target market is and how this might impact market size and penetration.
By carefully evaluating these factors, a software company can develop a more accurate and actionable estimate of their addressable market, aiding in strategic decision-making and resource allocation.