Markets & Industry
What a market sizing can and cannot tell you
· Priya Nadkarni
A market sizing estimates the value or volume of demand under stated definitions. It is a measurement, not a forecast, and it answers a narrower question than it is often asked to.
What it can tell you
- The current size of a defined market, within a stated range.
- How sensitive that size is to the definition you chose.
- Which assumptions carry most of the number.
What it cannot
A sizing cannot tell you what share you will win, or how a market will behave after a price change you have not yet made. Those are separate studies with their own methods.
The most common error is treating a sizing as a business case. It is an input to one.
We build every estimate two ways — bottom-up from units and top-down from spending — and publish the range between them. When the two methods are far apart, the gap tells the client where the real uncertainty sits, which is more valuable than a single confident figure.