TAM and SAM analysis
The total available market (TAM) for the sporting facility was based on the number of sporting events that could be hosted within the facility per day. In this context, TAM was defined on the basis of the maximum number of sporting events that could be hosted within the complex per year.
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On a single day, the facility could support two outdoor events such as soccer and rugby and four indoor events concurrently. The total available market was, therefore, evaluated by this formula (Number of sporting events that can be supported within the facility per day*365) (Brett and Schmitz 73).
Currently, the facility can support a total of six sporting events. In the second year, this number will be expected to increase to eight because two new sporting facilities will be ready for use. It is important to note that TAM estimation was based on the assumption that we can serve clients from all over the country as long as they visit Miami, where the facility is located.
The saved available market (SAM) was estimated on a narrow assumption that the markets that will be served are sporting teams based within Miami and its environs. Based on the information available on the State of Florida Website, we were able to identify the maximum number of teams that could use our facilities per day.
It was noted that there are two teams that could use our outdoor facilities for a maximum of four times a week and several teams that could use our indoor facilities five times a week. The formula used in determining the SAM based on this information was (Number of games per week*number of weeks per month*number of months in a year).
It means that in a week, the facility is expected to host about nine games (Munizzo and Virruso 45). The numbers of teams are expected to increase each year. Based on past trends, this number is expected to increase to 12 in 2016, 15 in 2017, and 18 in 2018.
The average sales prices (ASP) for the products were determined by reviewing the market average prices which were available on various websites. We then obtained a weighted average for all the sporting events that are expected to be hosted by this facility each year. We used this figure and the figures obtained from the above analysis to come up with the annual saved available market.
Saved Market Share (SAM) $ was estimated by multiplying ASP by the unit value of SAM to get its dollar value.
Share of the market (SOM) $, in this case, refers to the current market share controlled by this firm and the expected value of share increase expected in the subsequent years. With the facilities which are currently in place, this firm has a market share of 8%. An increase of 2% in market share is expected in the next three years till 2018. Share of Market (SOM) $ dollar value was obtained by multiplying the estimated SOM’s % by the dollar value of SAM.
|Outdoor/Indoor Sporting Facility- Market Analysis|
|Total Available Market (TAM)||2190||2190||2920||2910|
|Saved Available Market (SAM)||432||576||720||864|
|Average Sales Price (ASP) $||$ 1,200||$ 1,250||$ 1,300||$ 1,350|
|Saved Available Market (SAM) $||$ 518,400||$ 720,000||$ 936,000||$ 1,166,400|
|Share of Market (SOM)%||8%||10%||12%||14%|
|Share of Market (SOM) $||$ 41,472||$ 72,000||$ 112,320||$ 163,296|
Market segmentation and target segment description
The market segmentation will be done based on whether the sporting event is outdoor or indoor. This project will target various market segments. The main market segment will be soccer, basketball, and rugby tournaments. Tournaments such as volleyball and long tennis will also form part of the market segment to be targeted. The targeted individuals will be the club owners who may need to hire this facility from time to time.
Product description, positioning, value analysis, pricing
The product that this project offers is a wide sporting complex that can host a number of tournaments. The facility will host both indoor and outdoor games. In order to attract targeted clients, this facility will be positioned as a modern sporting complex that has the capacity to meet the varying needs of its clients.
This positioning strategy is important because what modern clubs need is sporting facilities that can fully meet their needs as either a training camp or a complex to hold their tournaments. This sporting complex will have unique value to its clients.
The users will have exclusive access to gym services throughout the day equipped with a highly qualified trainer, high quality playing ground fit for training and tournaments, and improved security throughout the day. The facility will charge a normal price based on the industry’s average. With time, the facility will be improved to offer premium products at premium prices.
Brett, Deborah, and Adrienne Schmitz. Real Estate Market Analysis: Methods and Case Studies. New York: Springer, 2015. Print.
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Munizzo, Mark, and Musial Virruso. General Market Analysis and Highest and Best Use. Mason: Cengage Learning, 2009. Print.