Total Market vs Total Addressable Market

Exhibit Guessestimation Market sizing
New answer on Dec 05, 2022
4 Answers
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Anonymous A asked on Dec 03, 2022

Hi, may I know if ‘total market’ and ‘total addressable market’ are different things? And if so, how do they differ? Thanks!

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Emre
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replied on Dec 03, 2022
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As I was preparing/presenting pitch decks to the investors for our startup, there were only 3 terms about the market size:

1- TAM (Total Addressable Market): The maximum size for an opportunity

2- SAM (Serviceable Addressable Market): Segments of TAM, which you are capable of serving

3- SOM (Serviceable Obtainable Market): The portion that you can capture from SAM.

Therefore, I would say, Total Market is another way of saying TAM and there should be no difference between those 2 terms in terms of meaning.

Bests,

Emre

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Udayan
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replied on Dec 03, 2022
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Total market usually has the total potential for sales. So for example the total market for a laptop is theoretically the entire population as everyone can potentially use a laptop. 

However the  addressable market is limited to the realistic number of people that would qualify as a customer by factors such as age, ability to purchase the laptop (income), access to stores, need for a laptop etc. 

 

Total addressable is almost always lower than the total (potential) market 

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Rushabh
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replied on Dec 03, 2022
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Hello,

Agree with Udayan here. TAM is a subset of TM. If you google these terms, there is a further subset called Serviceable Available Market which takes it one level more granular.

All the best!

Rushabh

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Ian
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replied on Dec 05, 2022
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Hi there,

TM => TAM => SAM => SOM

The others have all already defined each on specifically :)

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Emre gave the best answer

Emre

Incoming Bain Consultant | INSEAD MBA | 5 years of consulting and 3 years of entrepreneurship| 50% discount available
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