Developing an innovative piece of technology is an incredible achievement. But determining its place in the market is a whole other undertaking.
When applying for federal or state technology commercialization funding, being able to clearly define the market size and potential buyers for your innovation is a must.
The market research services provided by the Arkansas Small Business and Technology Development Center can help. As part of our SBIR/STTR application development assistance, our team can help you navigate this process.
Sizing the Market
As you determine your product’s market, remember three acronyms: TAM, SAM, and SOM.
The total addressable market (TAM) represents the entire possible market for your product. TAM is a great starting point to understand your innovation’s market potential, but you should consider this as a broad overview. It’s easy to find the worldwide market size for large industries through an internet search. But you can’t stop there.
For example, a single healthcare product will not be adopted by every hospital, clinic, or assisted living facility worldwide. Your innovation has specific use cases, and therefore a more particular set of potential buyers. Competitive and geographic barriers also make it necessary to divide the market further.
A smaller slice of the total market is your team’s service available market, or SAM, which reflects the segment that all true demand for your product would occupy. The healthcare product’s SAM would be shaped by several factors including its purpose, price, and realistic geographic distribution. But that also means that similar offerings, often with their own established market presence and existing customer loyalty, will occupy the same space.
Your actual buyers are reflected in the serviceable obtainable market (SOM), or the market share of SAM that you can expect to capture through your current or proposed business model. For your business, SOM is the actionable piece of the vast total market. Knowing your SOM can help direct your business’s marketing energy in the right direction, in addition to making your business model more attractive to federal agencies and other potential investors.
Knowing Your Value
By engaging the ASBTDC for technology innovation consulting, your team will get access to market analysis that can more clearly define your product’s SOM. The no-cost data will help you identify potential buyers and produce more robust applications for federal funding opportunities.
ASBTDC consultants use segmentation data to determine product-market fit, matching your product with specific customers’ needs. Through the consulting process, your team will be able to produce clear and coherent value propositions that explain why specific sets of customers should buy your product. Now that you know what segment of the total market is realistically available, you can more effectively target your marketing efforts and confidently state the value your product offers to the consumer.
Complementary data including competitive landscape information (direct and indirect), industry trends, and research and development news can help you further explore your potential in the market.
By integrating these resources and the step-by-step professional consulting available from ASBTDC, you can craft brilliant funding applications and effective marketing strategies that put your innovation in the right spot to succeed.
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