Served Available Market or Serviceable Addressable Market (SAM) is the share of the total market that can be fulfilled or served by all businesses that offer a particular solution, product, or service.
How to determine the size of the available serviceable market?
SAM is only a part of the total serviceable market - it cannot get bigger. The more specific the product you offer, the more accurate its definition (and thus its size) and the more specific market segment is addressed. Let’s consider the following examples:
If we sell safety helmets in a certain area, then TAM is formed by all companies in the area, whereas SAM represents only building and manufacturing companies, as office companies do not usually need safety helmets.
If you are a developer of iOS application for learning English, then TAM may be formed by all iOS users, whereas SAM will only be formed by those with a native tongue other than English.
The size of your target market is to be determined based on market analysis. In order to make this analysis, you need to be clear about some basic entries:
- Who is the target customer group? What customer segments are you reaching out for?
- What area are you trying to cover? Is this a local or a global product?
- What exactly do you offer?