Market Research Fundamentals (TAM/SAM/SOM, Industry Trends)

• Market Sizing (TAM, SAM, SOM) — defining the scale of opportunity and the slice you can realistically serve.
• Market Trend Analysis — identifying patterns in customer behavior, technology, and industry shifts that shape future opportunities.

Total Addressable Market (TAM)

TAM represents the maximum possible market demand if you captured 100% of potential customers. It’s the “big pie” number, useful for demonstrating the scale of opportunity.

Why it matters:

TAM shows investors and executives the ultimate growth ceiling. Too small, and the opportunity may lack viability; too big, and it may signal a saturated, hyper-competitive space.

How to calculate:

• Top-down: Analyst reports and market data.
• Bottom-up: Customers × average annual spend (investor-preferred).
• Value theory: Estimated willingness to pay for new/disruptive offerings.

Example: A SaaS healthcare tool priced at $1,000 per year × 1,352 hospitals in Australia = TAM of $1.35M.

Serviceable Addressable Market (SAM)

SAM narrows TAM down to the segment you can realistically serve with your current product and reach.

Why it matters:

SAM is the market you actually target with your go-to-market strategy. It shapes sales and marketing focus.

How to calculate:

Refine TAM by removing irrelevant geographies, demographics, or segments.

Example: Of the 1,352 hospitals, if your software only fits public hospitals, your SAM is 695 × $1,000 = $695K.

Serviceable Obtainable Market (SOM)

SOM is the slice of SAM you can realistically capture in the near term, given competition, resources, and current traction.

Why it matters:

SOM sets realistic growth targets. It’s the number you’ll benchmark against quarter to quarter.

How to calculate:

Estimate expected market share % of SAM based on past performance, competitive position, and execution capacity.

Example: If last year your revenue was $400K in a $695K SAM, your SOM is ~58%.

• Investor confidence: A “Goldilocks TAM”—not too small, not inflated—signals opportunity with realism.
• Strategic planning: Prioritize markets, allocate resources, and identify expansion paths.
• Competitive positioning: Reveals where you can differentiate and win share.

Types of Market Trends

• Consumer trends: e.g., demand for sustainable products.
• Historical trends: long-term patterns (decline of physical retail foot traffic).
• Geographic trends: regional variations (premium products in emerging markets).
• Seasonal trends: predictable spikes (holiday gaming sales).
• Technological trends: AI shaping decisions and industries.
• Demographic trends: aging populations, Gen Z buying power.
• Social & cultural trends: viral challenges, values-driven purchasing.
• Economic trends: inflation, trade policy, interest rates.
• Competitive trends: what rivals are doing (and missing).

Why Trend Analysis Matters

• Stay ahead of competitors by spotting shifts early.
• Guide innovation by identifying unmet needs and gaps.
• Future-proof strategy with long-term signals, not just short-term demand.
• Mitigate risk by anticipating downturns or regulatory shifts.

Example

Nokia vs. Apple: Nokia dominated mobile phones until Apple bet on a touchscreen-first trend. By failing to anticipate the shift, Nokia ceded the market.

Pringles 2025: Launched a Spicy Pickle flavor inspired by viral TikTok “pickle challenge” trends—showing how trend monitoring can drive real-time product relevance.

• Define TAM, SAM, SOM to quantify opportunity.
• Overlay trend insights to anticipate shifts and refine assumptions.
• Iterate regularly—because both markets and trends evolve continuously.

Together, they give you both a snapshot of current opportunity and a lens into the future.