What is the annual market capacity. Calculation of market capacity - the basis of sales volume planning

This article describes in detail the entire process of calculating the market capacity with good example. It is told why this indicator should be calculated and whether it can change. Useful formulas and calculations for future and current entrepreneurs.

Launching own business, it is necessary to carefully analyze the market and possible risks. And it doesn't matter which one. In order for the business to become profitable, and the start-up capital not to go down the drain, you need to calculate the market capacity.

Calculation of the market capacity is necessary in order to:

• Determine the share of the future company or enterprise in a particular market segment.
• Plan sales and marketing strategy.
• Regularly monitor the position of the business in the market.

Such calculations are resorted to not only when they are brought to the market new company but also a product, service or brand. It also allows you to identify a new niche or segment.

You can perform the calculation in 2 ways - use the services of a specialized company or independently. How to do it yourself, we will describe in detail below.

Don't confuse "capacity" with "volume" of the market

Many entrepreneurs, and especially beginners, are often confused in terms of "volume" and "capacity" of the market. Because of this, mistakes are often made. The reason often lies in the fact that on many sites they offer to calculate the market capacity using the formula for calculating the volume.

In order to avoid such confusion in the future, we immediately want to clarify:

• Market volume is the potential sales volume for a given period of time.
• Market volume is the actual volume of sales for a certain period of time.

In this article, we will consider only the calculation of market capacity.

Methods for calculating market volume

There are 4 main and effective methods calculation. They are based on:

• calculation of consumer costs;
• norms of consumption of specific goods;
• calculation of sales volumes in a particular region, regions or throughout the country;
• expert assessments.

Each of these methods is applicable to a specific situation. Therefore, so that you can choose the one that is right for you, we will consider each method individually.

Calculations based on consumer costs

This method allows you to fully explore the required range of goods, products or services in all market segments, and also involves a wide range of information sources. However, the latter can create some difficulties.

The fact is that Rosstat does not make public all the statistical data. And to collect the necessary information will have to work hard. As a result, the duration of the study is extended. It is also difficult to verify the accuracy of information taken from various sources.

As sources of information for calculating the capacitance in the described way, the following can be used:

• Rosstat.
• Consumer surveys.
• Price monitoring.
• Obtaining sales data from other companies.
• Customs declarations.

The collected information is structured, its reliability is checked, after which calculations are carried out according to the following formula:

E=N*K*F*P, where:

(*) - multiply;

N - the number of potential buyers (customers) in the selected segment;

K - % of potential buyers who are ready to make a purchase of the studied product (service);

F is the average rate of purchases in the selected segment for the study period;

P is the average cost of goods (services).

There is another formula that applies to this method. It looks like this:

In this formula, there are no indicators "P" and "K", but there is "C" - the volume of one-time consumption of a good or product.

Calculations based on product consumption rates

In this case, to calculate the market capacity, we need annual norms of consumption of goods per 1 inhabitant and the total population in a particular region. That is, it is necessary to multiply the norm of 1 person by the total population. The resulting figure is the average annual level of product consumption per capita.

Here you will also have to resort to the help of Rosstat and the analysis of secondary sources.

Calculations based on the calculation of sales volumes in a particular region

This method is one of the cheapest. It takes little time, and a consumer survey allows you to quickly get the most accurate data. But at the same time, the psychographic features of the target audience (buyers) are not taken into account here.

In this case, the calculations use the factors that determine sales, from which you can get the sales ratio in the ratio of one region (city) to another (population, average salary, prices, "portrait" of the consumer, consumption patterns, urbanization, etc.) .

This method has one drawback - the lack of access to some information necessary for the study. Therefore, it is often used by companies with experience in a particular region.

Calculations based on expert estimates

This method has several separate types:

• Average rating based on individual expert assessments.
• Optimistic, pessimistic and probable expert opinions.
• Settlements involving commission.

That is, such a technique consists in surveys of experts in a particular industry and segment in the required region. But there are a lot of difficulties here: a large percentage of failures and unreliability of information.

Everything that we have just listed may seem complicated and incomprehensible. Indeed, the process of calculating market capacity is difficult. And the methods themselves are difficult to understand for an inexperienced entrepreneur. However, we will still try to show by example how the market capacity is calculated.

Market Capacity Calculation Example

For example, let's imagine that we are preparing to enter the Internet services market - an Internet provider. The territorial market is a city with a population of 300,000 people. The audience is 100,000 houses (on average, 3 people live in one house in Russia). The frequency of payment for services is 1 month (subscription fee). The price, for example, is 250 rubles. The product is Internet access.

Now let's move on to mathematics.

1. 000 houses x 250 rubles. = 25.000.0000 rub.

That is 25,000,000 rubles. is the potential market capacity. This amount is received by all providers operating in the city per month or 300,000,000 rubles. in year. But this is provided that all 100,000 homes use the services of Internet providers. This, of course, cannot be. Therefore, it is necessary to bring the numbers closer to reality.

By studying the market and interviewing consumers or potential consumers, we found out that 65% of city residents use the Internet or want to use it. Accordingly, 100.000/100x65=65.000 houses. The final figure is an indication of the market in which all ISPs in the city operate.

Now we need to decide on the share of all competitors and our own sales volume.

For example, an Internet service provider provides its services to 15,000 subscribers. While competitors have the following base:

• Competitor 1 - 7,000 subscribers;
• Competitor 2 - 5,000 subscribers;
• Competitor 3 (or small ISPs) - 1,000 subscribers.

In total, we get 28,000 subscribers, which we multiply by 250 rubles. and we get the actual market capacity - 7,000,000 rubles. Actually, for the sake of this figure, all calculations were carried out. Now you can get market share from it that you can fight for.

65,000 - 28,000 \u003d 37,000 subscribers (56.92%), which is equal to 9,250,000 rubles. It is on this uncovered part that you need to work. And in the future, you can increase your market share with the help of competent marketing and offers that are beneficial for subscribers.

Let's consider one more example. Now, for calculations, we will take not a service, but a product - pork.

Meat consumption per capita in Russia is 50 kg/year. We will sell meat in a city with a population of 1,000,000 people, where the market capacity in full size is 50,000,000 kg of meat per year. Of which 30% is pork, 40% is beef, 25% is poultry, 5% is other.

It turns out that the share of pork consumption in our city is 15,000,000 kg/year. What is in monetary terms, at a price of 150 rubles. per 1 kg, equal to 2,250,000,000 rubles / year - the market capacity in a particular region (city).

Thus, by analyzing and obtaining statistical data, as well as mathematical calculations, you can get the actual market capacity in any segment and in a particular region.

Is the market capacity changing?

Market capacity is not constant. There is always a chance that she will stay on the same level. But most of the time it changes. For example, new ones appear or old ones leave the market. Consumers increase or decrease demand for a product or service. That is, one must be prepared for the fact that the market can both expand and contract. And all possible risks are worth in advance, to be ready to emerge victorious from any circumstances.

the maximum possible volume of goods, works or services that can be sold in a given market or market segment for a selected period of time, for example, in the national goods market, or the sales market of one company, or the territorial market

Information on the concept of market capacity, definition of market capacity and types of market capacity, including actual and potential market capacity, market capacity research, market capacity research goals and factors influencing market capacity, market capacity formula and market capacity calculation, capacity calculation market by various methods, the value of the market capacity indicator for business

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Market capacity is, the definition

The market capacity is calculated as a result of research or its segment, the actual or potential quantity, works or services that are sold on the market or may be sold in the future for the selected . Market capacity studies are necessary for business entities for and future. Various methods are usually used to determine the market capacity; when using several methods in one study, the calculations of this indicator are more accurate.

The market capacity is the size of the market for a particular service or service, expressed in the total volume of goods for the billing period; or general per category of goods, expressed in the purchasing power of the population. Often, instead of the concept of "market capacity", its synonyms are used - the size and the market.

Why do we need to calculate market capacity?

The market capacity is the possible volume of sales of goods / services at a certain price level. The market capacity indicator is calculated in (, tugriks, etc.) - i.e. it is the maximum amount that (sellers) in a given market can receive under constant circumstances (volume of supply, level of demand, etc.). Market capacity is the volume of those goods or services that are offered and purchased within the market ().

The market capacity is the volume of transactions for the purchase and sale of goods or services made in a certain territory (territorial market) or in a separate (branch market).

The market capacity is the potential volume of sales of a certain product on the market during a given period, depending on the demand for the product, price levels, the general market, business activity.

On the capacity of the tourism market

The market capacity is the quantity (value) of goods that the market can absorb under certain conditions over a certain period of time. As a rule, the market capacity is determined in the context of specific goods and services.

The market capacity is the total effective demand for a particular product at the prevailing price level.

The market capacity is the total solvency of buyers for a particular product at the current price level for this product.

The market capacity is the possible volume of sales of goods of a certain type or services for a certain period at the existing price level. Market capacity is not a constant value, its change depends on many variables of a general and specific nature - the existing demand for a product, the degree of its elasticity, the level of potential, their number, the manufacturer for advertising, price levels, geographical location and general market conditions.

The market capacity is the maximum amount of sales that all markets can achieve within a certain period.

The market capacity is the maximum possible quantity of a product that can be sold within a certain market in a certain period of time.

The concept of market capacity

If we turn to business terminology, then in the marketing sense - market capacity - the total effective demand of buyers for a certain product at the current price level. However, there are other definitions that are similar in nature.

Why do you need to know what is the market capacity of a particular product or group of goods and what share does it occupy in the market (as a rule, they calculate the market capacity and / or the position of the organization in this market)? First of all, in order to correctly assess the situation and the dynamics of changes in the market and, accordingly, make the only correct management decisions, which in the future will affect the viability of this enterprise or the product it produces (sales). Of course, this does not always work out, but, nevertheless ... you need to try.

In other words, market capacity is one of the key characteristics of any market, and without deep and detailed information about this indicator, "entering it" pursuing bold and ambitious plans would not be entirely correct.

Types of market capacity

In global practice, there are 3 types of market capacity:

actual;

Potential;

Available.

In kind (in pieces);

In value terms (in rubles);

In the volume of goods (in liters, kilograms, etc.).

Let's give short description each type of market capacity.

Potential market capacity

Potential market capacity - the size of the market, based on the maximum level of development of demand for a product or service among consumers. The maximum level of demand means that the culture of using the product has reached its maximum: consumers consume the product as often as possible and use it constantly. Potential market capacity is the maximum possible market size, which is determined on the basis that all potential consumers know and use the product category.

The potential market capacity is a concept artificially introduced into marketing and has no practical significance, in connection with the definition of the concept of "market capacity". Instead of this concept, it is correct to use the concept of potential demand or potential supply, possible under certain conditions.

Actual market capacity

Actual or real market capacity - the size of the market based on the current level of development of demand for a product or service among the population. The actual market capacity is determined based on the current level of knowledge, consumption and use of the product among consumers.

Available market capacity

Available market capacity - the size of the market that a company can claim with its product and its characteristics (distribution, price, audience) or the level of demand that a company can satisfy with its resources. In other words, when calculating the available market capacity, the company narrows the actual market size, considering as potential buyers not all market consumers, but only those who meet its target audience criteria.

Market capacity of a country or region

It is determined on a territorial basis, based on production volumes, carryover stocks at the beginning of the year and balances at the end of the year.

Market capacity of a particular product or group of products

It is valued on a commodity basis based on the needs for this product.

Market capacity of the firm, company

It is calculated for a specific enterprise based on available resources and capabilities.

Purpose of Market Capacity Research

Knowing the size of the market is essential for:

Market penetration by a new company;

Identification of new niches/segments;

Determining market trends;

Forecast of market development;

Definition of the company's development strategy.

Thus, determining the market capacity and attractiveness (potential opportunities) of each of its segments allows the company to answer questions about the advisability of entering this market and what price niche to occupy.

Calculating market size is crucial for business, and the cost of an error in calculating market size in monetary terms can be in the millions conventional units. Therefore, a marketer or development director must have adequate methods for calculating market capacity (and use them in practice).

Market Capacity Study Methodology

The practice of marketing research shows that data on the market capacity of certain goods and on the share occupied by individual manufacturers are currently of great interest to the manufacturers themselves. They are necessary both to expand the position of a company that already occupies a stable position in the market, and to enter the market of a new company or brand.

The need for such information has already been formed: today there are many organizations that conduct this kind of marketing research. However, after reading the reports and articles on such studies, there are numerous questions about both the conduct and writing of reports. Therefore, I would like to raise the question of the correctness of using certain methods to study the market capacity and the most common, in our opinion, mistakes. We think that this kind of discussion will be interesting and useful for those working in this field.

The study of market capacity or market demand involves determining the volume of sales in a selected market of a particular brand of goods or a set of brands of goods for a specific period of time.

The study of these parameters is usually carried out in five main areas:

Analysis of secondary information;

Production and sale of products;

Costs and consumer behavior;

Calculation of capacity based on the consumption norms of this type of product;

Determination of capacity based on "reduction" of sales volumes (when the known market capacity in one region is the basis for calculating the market capacity in another region by adjusting it using reduction factors).

Analysis of secondary information

It includes the analysis of all documentation that may contain information about the market of interest to us and may be useful in marketing activities: data from authorities, market reviews, specialized magazines and articles, Internet data, etc. However, information obtained in this way is more often of everything turns out to be incomplete, quite difficult to use when practical application and often of dubious validity.

Market research for the production and sale of products

Includes a study of manufacturers, wholesalers and . The information obtained from this source makes it possible to determine the actual sales volumes and representation of manufacturers and trademarks. Given that the number of sellers is smaller than the number of buyers, such research is often faster and cheaper than consumer research. The problem is how accurate the information provided by manufacturers or sellers will be, and how representative of the sample of sellers interviewed will be representative of the general population (the entire mass of retail outlets selling products on the market).

Costs and consumer behavior

We study either the costs that consumers have made for the products of interest to us over a certain period of time, or the frequency of purchases and the volumes of purchased products together with the average retail sale price, or the consumption rates of this product. At the same time, the study allows us to raise a wide range of materials related to the behavior and motivation of consumers: their attitude to a particular brand, the volume of a one-time purchase, the frequency of purchasing a product, the expected price of a product, the degree of brand visibility, brand loyalty, the motivation for choosing a particular brand. goods, etc. The question of the accuracy of such information is how faithfully and truthfully the buyers will reproduce the data on their consumption.

Consumption rates for this type of product

This approach is usually used for food products, and Supplies. The statistical basis for the calculations are the annual consumption rates per inhabitant and the total population. Thus, the final capacity figure is obtained by multiplying the consumption rate per inhabitant by the value of the total population.

Bringing sales volumes

A similar calculation methodology is used mainly by companies with significant experience in certain geographical markets. The calculations use data on the actual volume of sales in one region and the factors that determine sales. With the help of the latter, the coefficients for converting sales of one region to another are determined (coefficients for reducing the population, average wages, urbanization, prices, consumption patterns, etc.).

Conducting research on manufacturers and sellers of products in order to obtain market data is quite common for a marketing company, but mistakes can also be made here.

As experience shows, one of the most common mistakes is non-compliance with the representativeness of the sample.

Identification of cause-and-effect relationships in the market under study is carried out on the basis of systematization and analysis of data. Systematization of data consists in the construction of grouped and analytical tables, dynamic series of analyzed indicators, graphs, charts, etc. This is the preparatory stage of information analysis for its quantitative and qualitative assessment.

Processing and analysis is carried out using well-known methods, namely grouping, index and graphical methods, construction and analysis of time series. Causal relationships and dependencies are established as a result of the correlation-regression analysis of time series.

Ultimately, a description of the cause-and-effect relationships caused by the interaction of various factors will make it possible to build a development model in the market and determine its capacity.

Factors affecting the market capacity

Market capacity is formed under the influence of many factors, each of which in certain situations can both stimulate the market and restrain its development, limiting its capacity. The whole set of factors can be divided into two groups - general and specific.

Common are the socio-economic factors that determine the market capacity of any product:

The volume and structure of the product offer, including by manufacturing enterprises;

The material basis for the formation of any world commodity market is the international division of labor, while the national commodity market is based on the social division of labor within the country. The consequence of this is the relative independence of any world commodity market, which manifests itself in the features of the dynamics and structure of development, in the presence high level concentration of "unified" requirements of buyers to the product, the conditions of its operation and service.

The main parameter of the world commodity market is its capacity.

The capacity of the world commodity market should be understood as that part of the total market demand of all countries that is satisfied by external sources, that is, import. The size of world imports of a given product (usually per year) can be approximated as the capacity of the world commodity market.

The capacity of the national commodity market is the volume of goods sold on it during a certain period (usually a year). It is calculated on the basis of industrial and foreign trade statistics in physical units or by value:

The import capacity of the national market for a particular product for the year is measured by the size of direct and indirect imports, to which is added (or subtracted) the difference in the available imported goods from consumers or importers in comparison with the previous year.

Sources of information about the market capacity are statistical, industry and company directories, industry and general economic journals.

Capacity of the global financial market

Market volume financial services and the share of the financial organization are determined within the identified product and geographical boundaries of the financial services market, the composition of customers (consumers) and competitors.

The capacity of the financial market can be defined as the sum of the volume (turnover) of financial services provided by all financial institutions for a certain period:

To determine the financial resources of the market, the capacity of the financial services market can be defined as the sum of the (core capital) of financial institutions operating in a particular market.

This indicator is more applicable to the market with an identical institutional composition of financial institutions. For example, such an indicator is applicable to the banking services market, where only credit organizations operate, to the insurance services market, if the majority of existing insurers can be compared in terms of the amount of assets (fixed capital), etc.

When determining the capacity of the regional financial services market, one should take into account the volume of financial services provided by financial institutions registered in the region under consideration (taking into account the volume of financial services of their branches, branches, representative offices, operating cash desks, additional offices, etc. located in this region) , and the volume of financial services of branches (branches, representative offices, operating cash desks, additional offices, etc.) of organizations located in another region.

In the absence of data on branches (departments, representative offices, operating cash desks, additional offices, etc.) of financial organizations, the capacity of the regional market can be calculated using the formula:

Capacity of the world currency market

In the world of international finance, at the moment there is such a situation where it is the largest among all financial markets in the world. The capital of the foreign exchange market at the moment is London, which accounts for 36.7% of global.

It is believed that the daily turnover in the Forex market was:

The market capacity shows the saturation of the market with financial instruments and its participants.

marketing.spb.ru - information site about marketing

memosales.ru - website about marketing and business

marketingnews.ru - information and news site about marketing

center-yf.ru - site Financial Management Center

marketing-ua.com - site with articles about marketing

uchebnikionline.com - site with materials for students

treko.ru - website Consulting and training in St. Petersburg

brif.kz - marketing research blog

financial-lawyer.ru - information site about business and economics

studme.org - site with educational materials in various subjects

bookwu.net - electronic online library with textbooks

base.consultant.ru - official website of Consultant Plus

rae.ru - website of the Russian Academy of Natural Sciences

vestifinance.ru - information and news site Vesti Economy

creativeconomy.ru - website of Creative Economy publishing house

ereport.ru - site with macroeconomic data on the world economy

Links to internet services

forexaw.com - information and analytical portal for financial markets

Ru - the largest search system in the world

video.google.com - search for videos on the Internet using Google

translate.google.ru - translator from the search engine Google Inc.

Ru - the largest search engine in Russia

wordstat.yandex.ru - a service from Yandex that allows you to analyze search queries

video.yandex.ru - search for videos on the Internet through Yandex

images.yandex.ru - search for images through the Yandex service

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The concept of market capacity occupies an important place in the procedures for planning and forecasting the company's activities.

This key concept both for the marketing department and for the entire enterprise as a whole.

Data on the value of this indicator is widely used in making management decisions of the company, helps to determine the strategy of action, and also plays a crucial role for the company when increasing the scale of activities.

Example: launching a new product or entering a new market.

Using formulas

Determining the market capacity allows you to assess the economic environment in the dynamics of time periods, which means it helps to make strategically important management decisions in a timely manner. After all, the main commandment of success in the competitive struggle is to immediately identify and respond to the slightest changes, otherwise the collapse of the company is guaranteed.

Market capacity can be potential and real. Real capacity refers to the actual economic situation at the moment. Potential capacity characterize the concept introduced into marketing artificially. It reflects the needs of customers in a particular market, but does not necessarily correctly characterize demand.

There are a sufficient number of definitions of market capacity, but they all come down to the same thing. The most complete and correct is the following:

Market capacity is the total solvency of buyers for a particular product at the current price level for this product.

In other words: it is the total demand for a product, be it a good or a service. Most often it is measured in monetary terms, but in some cases it is also possible to measure in kind, a frequently used example is kilograms. From a theoretical point of view, the capacity can be calculated as follows:

E = K × C

where:
E - market capacity,
K - quantity of goods,
C - the price of the goods.

However, in order to apply this formula, you need to find out how many products your competitors are selling, and this, as you know, is on the verge of fantasy. No sane representative of a competitor company will provide you with such information. It is also necessary to know the size of imports and exports of this product, which is also quite problematic, since customs bases do not always have reliable information on this matter.

So how then to calculate this indicator?

What and how to calculate

There are several basic methods for calculating capacitance. The most common one is determination of an estimate of the total market capacity. This example allows you to calculate the market capacity indicator when introducing a new product or removing an obsolete product. The purpose of the method is to establish the volume of potential demand for the product in question.

In this case, we will talk about the potential capacity of the market (new product).

The main element of the calculation is the population of the geographical region under consideration. The bottom line is to calculate the percentage of residents of the region who consume the analyzed product. The next step is to determine the amount of money they spend on this product over a period of time.

The calculation will look like this:

E \u003d K × P × H × SP × PP × C

where:
E - total market capacity,
K - the number of potential consumers (population of the region),
P - consumers of the product,
H - the average number of consumption of the product by one buyer in a given period of time,
SP - the average consumption of the product by one consumer at a time,
PP - the percentage of consumers who prefer the product,
C - the average price of the product.

An important element of the analysis is the determination of the assessment of the territorial component. The importance of territories must be taken into account in order to optimally distribute marketing efforts across all points of sale of a product in a competent way.

Use case: more children under 5 live in St. Petersburg than in Moscow, so for manufacturers of toys for small children, the territorial component plays a key role.

In B2C, things are somewhat more complicated. Here the calculation is made through the purchasing power index. To determine these indices, it is necessary to identify the most significant factors for consumers, depending on a particular region.

Example: producers of sweets for children. Influencing factors may be the following: the number of children in the region under consideration, the average income per family with children, the share of expenditures on products in this category. The coefficients must be weighted so that they add up to one. Accordingly, for each region, the values ​​of the specified criteria will be different, and then, when summing up the indicators, the result will be different for each of the regions.

The methods discussed above are the most commonly used, however, it is possible to determine the market capacity in other ways, an example of some of them:

There are still many different approaches and methods for calculating market capacity, but there is no “universal methodology” that could be used in any situation in any market and for any product. Therefore, the calculation of this indicator and its methodology should be selected individually for a specific product or for a specific market situation.

Influence of factors

Market capacity, like any economic indicator, depends on a number of factors. The main one is the level of market demand for a given product or service.

Other important influencing factors include:

• degree of development by the company of this market;
• appearance on the market of goods - substitutes (analogues);
• elasticity of demand;
• the level of price fluctuations;
• changes in macroeconomic indicators in a region or country;
• quality of goods and services;
• promotion strategy and its effectiveness;
• other factors.

Finally

Today there is a high demand for such marketing information as the size of the market capacity. Marketing agencies offer expensive marketing research to determine this indicator.

However, not all methods used to calculate the market capacity are trustworthy. Therefore, it is important to independently study and master the main ones in order to always be afloat, having the necessary information.