Question

I have a Total Available Market (TAM) of 20 million Americans that are snoozers, having difficulty waking up, hotel chains, and health enthusiasts. Serviceable Available Market (SAM) is 540,000 of fit Americans. My question is what is the Serviceable Obtainable Market? My product that I am trying to target is a mat that you have to step on to stop the alarm from going on which takes your effort to get out bed.

Answer 1

Hi student, the answer which I am providing is purely subjective in nature, it can differ if you change your assumptions

As you have clearly mentioned that the serviceable available market is 540,000. So the max available market that can be captured is 540,000.

As the '' Alarming door mat" is a fairly new concept product. It needed extensive marketing to reach the right set of audience. So even in the right set of audience only few will come forward to make a purchase because the product is although innovative but it is completely new.

Assuming the using right set of social media, we were able to meet 30% of customers. (Considering fair amount of marketing period)

It would be really difficult to all the SAM, as the target population is completely less and we require huge amounts of marketing spend. So assuming 30% is decent percentage.

So the serviceable obtainable market is 30% of SAM

= 0.3*540,000

= 112,000

And out of these. 10-20% might likely purchase in the Initial phase.

So at max we can expect 20,000 sales for the initial marketing run.

Please note that these are general assumed numbers and can differ from industry to industry, we might require significant market research to be done to find the exact match.

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