Estimating the Indian Market Size | Strategic Business Planning

Currently, India is one of the fastest-developing economies in the world. It has a growing population that contributes to its vast consumer market, thus creating a massive demand for goods and services. Hence, when expanding operations to a different geographical location, India is the top choice for foreign organizations.

As per leading market entry consulting firms in India, assessing the market size is critical to facilitate successful entry and business expansion. Foreign companies should definitely consider this factor before making any decision.

How Can Businesses Estimate Market Size?

Businesses can follow the steps given below to determine their market size:

Step 1: Identify the Target Audience

To determine market size, businesses must first identify their target audience. A smart way to do this is to create a buyer persona. It will help them analyze the needs and desires of that particular consumer type.

The target audience will also depend on the product or service as well as the type of End users i.e. if it is a B2B or a B2C product or service. In both instances, the marketing strategy and business plan vary a lot as your marketing channels and spending are also different for both segments of end customers.

Step 2: Analyse the Number of Potential Consumers

The next step is to get a rough estimate of the entire potential consumer base. Doing so will help businesses understand whether that particular market will be profitable for expanding their operations or if they should consider investing in some other segment.

For instance, entering a market with a small number of potential customers may not be profitable for a big company. Under such circumstances, they will prefer to enter a market with higher potential consumers to ensure sustainable operations.

Step 3: Determine the Rate of Penetration

Hereafter, businesses need to determine the market penetration rate for their products among the target audience. In this regard, if their offerings fall in the essential category, the penetration rate will be high. Whereas, in case the goods are only used for a specific purpose, the penetration rate is usually low.

For example, businesses dealing with essential services or articles like FMCG products will naturally have a very high penetration rate. In comparison, firms selling niche items like luxury or premium products and services may not have a high market penetration.

Step 4: Research the Competitors

An essential step in determining market size is to research and understand the competition. By doing so, firms can get a realistic picture of how much market share they can target along with their prospects for growth in the sector for the long term.

For instance, in a market where several large-sized companies are already competing among themselves, the market size for a new and foreign firm can be much less. Inversely, if that business enters an industry sector where few organizations are operating, its chances of getting a higher share of the consumer base increase.

Now, correctly assessing the market size involves several other complicated steps that will need the involvement of additional manpower and resources. A smart move in this regard will be to partner with a leading strategy and management consulting firm in India.

Importance of Assessing Market Size Before Entry & Expansion

Many businesses confuse market size with the total number of inhabitants in a particular region. Moreover, they have the misconception that shifting operations to a country with a huge population will increase their sales.

However, it is quite the contrary. The term market size refers to the total number of potential buyers for a company’s products in that location. Technically, it refers to the total revenue a business can potentially earn within a specific time period from product sales. Additionally, it also reflects whether expanding operations to that particular area would be a viable option. Thus, before entering a new market, businesses must determine the size of the potential market. This will help ensure that their revenue expectations are met.

Apart from this, analyzing market size also helps firms develop a robust business plan and marketing strategy. It offers a clear picture of how much they need to invest in order to ensure foundational strength. Furthermore, companies can also launch marketing schemes in line with the market size for better results.

How Can Market Entry Consulting Firms in India Help You?

For foreign businesses willing to find out the size of their potential Indian market, they have to conduct extensive research on a variety of factors. It involves analyzing the current consumer trends for the product they are willing to sell, its current and estimated future demands as well as the potential to scale their operations in the long run.

On a realistic note, for foreign companies to do all this on their own can prove to be a hectic task. In this regard, getting in touch with market entry consulting firms in India can be a viable solution. Business consulting firms like Tecnova have an in-depth market exploration strategy that can facilitate successful entry into the Indian market for a variety of foreign businesses.

As a leading strategy and management consulting firm in India, Tecnova analyses the current and future opportunities, competition, demand, supply gaps, and much more to provide a realistic view of the potential size of the Indian market to its clients. Thus, partnering with such firms can prove to be really useful for companies planning to enter the Indian market.

Reference

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