How to calculate market capacity: methods and approaches

[Joywtome231]

5. Time period. And finally, you need to decide for what period of time the market capacity can be calculated. That is, within what framework the research should be conducted. Usually, it is a year, a quarter or half a year. Everything will depend on the sphere. Here it is important to take into account the seasonality of the business.

6. Segmentation. Dividing the market into segments based on audience, product, or region characteristics. An additional parameter that will be needed if you plan to enter wider markets.

Segmentation allows for a more accurate assessment of the market capacity for macedonia phone number list specific consumer groups. For example, the capacity of the children's toy market can be divided into segments by age of children, family income, or type of toy. Customer behavior in different sectors, even within the same market, can differ significantly. This should also be taken into account in calculations.


Calculating the capacity and assessing the company's market is a key step in the analysis that helps a business understand the volume of demand and possible sales potential. There are several approaches to the calculation, and each is suitable for different situations and purposes. Let's look at three main methods: top-down, bottom-up, and the sales-based method.

1. " Bottom-up "
The simplest and most popular method, which can be calculated, for example, by an entrepreneur on an individual basis. To calculate the market capacity using this method, you only need to know the number of target audiences in your geographic area, the average cost of the product, and the degree of regularity of purchases (consumption rate).

The data can be found, as a rule, in open sources (especially the target audience and the average cost of the product). The consumption rate can be determined independently or marketing research can be considered. The formula will look like this: