The marketing process for calculating marketing size is the most important and most critical factor determining the size of your company. This is because of the fact that the marketing “market” has many variables and components. Some of these components include the following: demographic, geographic area, customer preferences, spending habits, purchasing power, channel mix, and competition from similar companies. Therefore, to get a handle on all of the variables in this marketing environment, it is necessary to have a process for calculating market size that is as accurate and precise as possible.
This process requires three elements: the marketing budget, the marketing focus, and the actual marketing activities. These three factors must be determined and analyzed. One can make an accurate estimate of the size of the market by analyzing these three factors.
The first step is to create a marketing budget. The marketing budget should take into account such factors as the number of employees, the cost of marketing activities, and the amount of available marketing space. A detailed budget should be prepared which will cover every aspect of the marketing budget. This includes data regarding sales volume, average cost per sale, number of new customers a firm has had, the cost of new and existing customers, sales personnel, and the amount of time spent on marketing.
Next, the focus of the marketing activities should be identified. This should be done by studying the marketing activities undertaken by various firms in relation to market size. The market size should then be analyzed by looking at factors such as the size of the market segment, competition from similar firms, target customers, and market shares held by competitors. Based on this analysis, suitable strategies should be developed for marketing. It is also necessary to establish whether or not the market share held by competitors has been eroded since the last analysis.
Once the market size has been established, the relative importance of each firm should be determined. Firms should be ranked according to their strength in particular markets, services offered, market shares, and market goals. The relative importance of each firm should be determined in terms of its industry experience, its profitability, products and services offerings, and market reach. Since market share and profits are considered to be important factors, firms with large market shares should be ranked higher than those firms with small market shares. Meanwhile, firms with greater market reach should be ranked lower than firms with smaller market reach.
Next, the scope of the market should also be determined. This refers to the number of consumers a firm has targeted, counting all sections of society. The breadth of a firm’s market reach should include all geographical regions, including urban and rural. A market size that falls between one and two hundred should be taken into consideration as well.
Marketing programs should also be studied to identify how the firm plans to penetrate new markets. The penetration rate of the firm’s products and services offerings should be studied to determine if it is expanding the market or not. The company’s future market growth should also be evaluated based on the existing market share of the company. The firm’s competitive advantage and potential growth should also be studied.
Lastly, the marketing budget should also be analyzed to ensure the financial allocation is made for necessary marketing programs. The size of the marketing budget should be based on available funds, the projected marketing needs over the next five years, and the expected profitability of the company over the next five years. In addition, the marketing budget should also take into account the current market share as well as the anticipated competition in the near future. Since the size of the marketing budget depends on the size of the company, the analysis of the marketing activities of the firm can help determine its future size and the allocation of resources.