The term “”Serviceable Obtainable Market”” (SOM) is used in business and marketing to refer to the portion of the target market that a company or a product can realistically capture or serve with its available resources and capabilities. SOM represents the specific segment of the Serviceable Available Market (SAM) that a company can effectively reach and convert into actual sales or revenue.
Key points about Serviceable Obtainable Market (SOM) include:
1. Realistic Market Size: SOM helps businesses to determine the practical market size that they can capture based on their operational capabilities, resources, and market reach. It provides a more focused view of the market potential that can be realistically tapped into.
2. Resource Constraints: SOM takes into account the company’s limitations in terms of production capacity, distribution channels, marketing budget, and other resources that might affect the company’s ability to penetrate the market and achieve sales.
3. Competitive Analysis: Evaluating SOM often involves analyzing the competitive landscape within the target market. This analysis helps businesses identify their competitive advantages and understand how they can effectively position their products or services to capture a significant share of the market.
4. Market Penetration Strategy: Understanding SOM is crucial for developing effective market penetration strategies. By identifying the specific segment of the market that the company can realistically reach and serve, businesses can tailor their marketing and sales efforts to maximize their revenue potential.
5. Business Planning: SOM is a key factor in developing realistic business plans and setting achievable sales targets. It helps companies set more accurate revenue projections and determine the feasibility of their growth and expansion plans.
Understanding the SOM is essential for businesses to set realistic and achievable goals, optimize their resource allocation, and develop effective marketing and sales strategies. By focusing on the specific segment of the market that they can effectively serve and capture, businesses can better position themselves for growth and success in their respective industries.