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The market size is more difficult to estimate if one is starting with something completely new.In this case, you will have to derive the figures from the number of potential customers, or customer segments.The market size is defined through the market volume and the market potential.
That means that the market price and the quantity are taken into account.
Besides the market volume, the market potential is of equal importance.
Besides information about the target market, one also needs information about one's competitors, customers, products, etc.
Lastly, you need to measure marketing effectiveness.
Market segmentation is an important way to find competitive advantage with its differentiation in market analysis.
Market segmentation concentrates on market energy and power to gain competitive advantage.It defines the upper limit of the total demand and takes potential clients into consideration.Although the market potential is rather fictitious, it offers good values of orientation.The findings of a market analysis may motivate an organization to change various aspects of its investment strategy.Affected areas may include inventory levels, a work force expansion/contraction, facility expansion, purchases of capital equipment, and promotional activities.Consumers ask for more individual products and services and are better informed about the range of products than before.As a consequence, market segmentation is necessary.Through all of these analyses, the strengths, weaknesses, opportunities and threats (SWOT) of a company can be identified.Finally, with the help of a SWOT analysis, adequate business strategies of a company will be defined.In other words, market segmentation is the concept tool to get the force (Thomas, 2007).In market analysis, market knowledge is required to analyze market structure and process.