Sizing imperfect and emerging markets
November 6, 2009 § 2 Comments
Imperfect markets are local “pockets” of unmet need within a mature market. Emerging markets are those which are ready to go through rapid growth (in market size). A commonly known problem is the sizing of such markets. A commonly known solution is “niche marketing”.
Investors know emerging markets cannot easily be sized.
If you claim you can with an easy definition, or base yourself on readily available industry figures, likely that will be interpreted/red flagged as “absolutely clueless”. If you claim a market to be “unknown” likely you’ll be considered as not having assessed market potential and therefor stealing their time and energy. Exclaiming “A kazillion size market!” will likely receive you the projection of “foolish wit”.
You can use the market build-up method. Below is an example applied to the Agile market for “organisational sculpting”, a service that focuses on adding the subjective details that often get overlooked, but can be used to actually solve some of the real problems. It is merely used to show how the “market build-up method” can be used.
Market build-up method
A market is a set of actual and potential buyers.
A potential market is a set of actual and potential buyers that have money and desire to buy a product or service with specific price and performance characteristics.
An available market is a set of actual and potential buyers that have money, desire and access to buy a product or service with specific price and performance characteristics.
A served available market is a set of actual and potential buyers that have money, desire and access to buy a product or service with specific price and performance characteristics, that we decide to serve.
- Obtain starting point data, for example the amount of people with agile alliance membership.
- Determine the percentage of agile alliance members that might have a desire for organisational sculpting, by a-select checking 50 member sites for “people problems” and “systems thinking concepts”.
- For each site try to determine “roles” by looking at “about us” or “who we are”, assuming that managerial roles give access to money, the power to buy, and have decision making power (are MAD). These may actually be hard to find in agile contexts themselves, but maybe “higher up” in the company or organisation you can find a MAD person.
- Determine size of the available market by taking into account MADness.
- Diversification Is Critical With Emerging Markets (forbes.com)
- “Look to Emerging Markets as the Federal Reserve Diminishes the Dollar” and related posts (moneymorning.com)
- WisdomTree Emerging Markets Equity Income Fund (DEM) Receives 5-Star Overall Morningstar Rating TM (eon.businesswire.com)