What is a Market Size?

A market size describes the number of potential customers and can be measured by three terms: TAM, SAM and SOM.

Oscar de la Hera Gomez
Written by Oscar de la Hera Gomez
First published on 02/27/2024 at 13:19
Last Updated on 02/27/2024 at 14:27
<p>A flower that represents business with the text "Market Size" beneath it.</p>

A market size describes the number of potential customers and can be measured by three terms: TAM, SAM and SOM.

Subscribe

As part of taking a product, service or experience (i.e. an initiative) to market or deciding whether it is worth pursuing, companies and individuals need to determine the market size that is available for the initiative and how much it is worth (i.e. the market value)

What is a Go-To-Market (GTM) Strategy?What is a Product-Market Fit (PMF)?What is Market Value?

Defining a market size is be broken down into the following three terms: TAM, SAM and SOM.

Total Addressable Market (TAM)

The maximum customer base that a company could achieve if it were to capture 100% of the market share.

Serviceable Addressable Market (SAM)

The portion of the TAM that aligned with the company's resources, capabilities and vision.

Serviceable Obtainable Market (SOM)

The portion of the SAM that a company can get at its current scale.

This may consider budget, marketing and sales strategies, competitive positioning and demand.

Looking to learn how to calculate a market size?

Consult our guide below to learn how to calculate a TAM, SAM and SOM.

How to define a Market SizeWork with Us

Looking to learn more about Innovation, Project Management, Design, Technology and Strategy?

Search our blog to find educational content on innovation, project management, design, development and strategy.

Search our Blog

Any Questions?

We are actively looking for feedback on how to improve this resource. Please send us a note to inquiries@delasign.com with any thoughts or feedback you may have.
SubscribeContact UsVisit our BlogView our ServicesView our Work

Partner with us

We would love to get to know you and see how we can help your organization with its goals and needs.
Let's Talk

Stay Informed

Get occasional updates about our company, research, and product launches.
Subscribe