Market Sizing (TAM / SAM / Target / Share)
A market sizing diagram showing Total Available Market, Serviceable Available Market, Target Market, and current Market Share, each with value, annual growth, and description.
About Market Sizing (TAM / SAM / Target / Share)
A market sizing diagram shows how big an opportunity is by nesting four measures inside one another: the Total Available Market, the Serviceable Available Market, the Target Market and your current Market Share.
It is used to judge whether a market is large enough to justify investment, to focus on a realistic slice of it, and to explain that reasoning to investors and colleagues. Each layer is shown with its value, its annual growth and a short description of how it is defined.
At a glance
- Category
- Marketing
How it is structured
The Total Available Market (TAM) is the total demand for a product or service category if every potential customer bought it. The Serviceable Available Market (SAM) is the part of that demand your business model, geography and channels can actually reach. The Target Market is the segment you are focusing on now. Market Share is the portion you currently hold.
Each layer sits inside the one above, so the picture shows how quickly the addressable opportunity narrows from the theoretical maximum to the customers you win today.
Use cases
Investor and board presentations
Show the size of the opportunity and the reasoning behind the segment you are pursuing.
Go-to-market planning
Decide which segments to focus on first based on size and growth.
Setting targets
Ground revenue and share goals in the size of the market rather than in internal aspiration alone.
How to use it
Tips and common mistakes
- Build estimates bottom-up from customer counts and prices where you can. Top-down figures quoted from reports are often too generous.
- State the source and assumptions for every number so they can be challenged.
- Revisit the figures regularly. Growth rates and segment definitions change.
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