Introduction

TAM SAM SOM is a calculation method to measure the market potential of a business. Usually, this method is used by entrepreneurs who will build a new business or startup. With the TAM SAM SOM method, entrepreneurs are able to:

1. Forecast the growth of the business
2. Calculate estimated profits
3. Presenting to investors

TAM itself refers to the Total Addressable Market which describes the total market demand for a product or service as a whole. In addition, TAM can also be used to find out customer segments that are still untapped.

Then, SAM stands for Serviceable Addressable Market which measures the business's ability to provide services. SAM is used to calculate the business's ability to reach the market objectively. SAM can also be used to help businesses determine their niche and medium-term goals. The reason is, startups as new companies, certainly have limitations in providing services. Therefore, a realistic calculation is needed regarding the market size that is the actual target market.

SOM stands for Serviceable Obtainable Market. SOM refers to the total market that is already using the company's products or services. Calculating SOM can help businesses to know the worst-case scenario, which is only being able to achieve a small portion of TAM. Calculating SOM is important to demonstrate the business's ability to determine and provide services to the target market.

1. Total Addressable Market (TAM)
   

   Total Addressable Market (TAM) = Total Number of Customers x Average Purchase Amount of Each Customer Per Year

   Description: data on the total number of customers through comprehensive market research. Then, find out the average purchase amount of each customer by reviewing the current consumer data.

2. Serviceable Addressable Market (SAM)
   

   Total Addressable Market (TAM) = Total Number of Customers x Average Purchase Amount of Each Customer Per Year

3. Serviceable Obtainable Market (SOM)
   

   SOM = Number of Achievable Customers × Average Spend per Customer

Know about TestMate

TestMate proposes a new safe multi-platform freemium Computer Based Test to organize and manage exams with analytical feedback efficiently. We are targeting a b2b business model.

Helping schools / tutoring institutions to save the cost of conducting written exams using multiplatform devices, so that it can be implemented on various devices available. Helping teachers to save time and generate student evaluations using IRT Analytics so that they can provide test evaluations efficiently with IRT Analytics. If the company is just starting out, it can conduct market research and competitor analysis to estimate the SOM value. The calculation will be done in a bottom-top manner.

Potential Market Analysis

Assumption of Average Expenditure

• 1 school = 300 students
  

  Total, 300 * 5000 = Rp1,500,000/year/school

• 1 university = 1000 students
  

  Total, 1000 * 5000 = Rp5,000,000/year/university

• 1 educational institution = 150 students/institution
  

  Total, 150 * 5000 = Rp750,000

Serviceable Obtainable Market (SOM)

The number of primary to senior high schools in the superior and international categories in North Sumatra is 100 units. The number of private tutoring institutions in North Sumatra is 50 units.

• Elementary to high school equivalent categories of superior and international in North Sumatra
  

  SOM = 100 x Rp1,500,000

  SOM = Rp150,000,000

• Private tutoring institutions in North Sumatra
  

  SOM = 50 x Rp750,000

  SOM = Rp37,500,000

• Total SOM = (Elementary to high school equivalent categories of superior and international in North Sumatra) + (Private tutoring institutions in North Sumatra)
  

  Total SOM = Rp187,500,000

Serviceable Addressable Market (SAM)

The number of universities in North Sumatra is 20 units. The number of tutoring institutions in Indonesia is 1,100 units.

• Universities in North Sumatra
  

  SAM = 20 x Rp5,000,000

  SAM = Rp100,000,000

• Tutoring institutions in Indonesia
  

  SAM = 1,100 x Rp750,000

  SAM = Rp825,000,000

• Total SAM = (SAM of universities) + (SAM of tutoring institutions in Indonesia) + (SOM of elementary to senior high schools in the superior and international categories in North Sumatra)
  

  Total SAM = Rp975,000,000

Total Addressable Market (TAM)

The number of elementary to high schools in Indonesia by BPS 2023 amounts to 274,942 units with a target of 50.000 units and universities both public and private by Diktiristek 2023 amount to 4,231 units with a target of 2.000 units. Meanwhile, the average purchase issued is

• Elementary to high schools in Indonesia
  

  TAM = 50,000 x Rp1,500,000

  TAM = Rp75,000,000,000

• Universities both public and private
  

  TAM = 2,000 x Rp5,000,000

  TAM = Rp10,000,000,000

• Total TAM = (TAM of elementary to high schools in Indonesia + TAM of universities both public and private) + (SAM of tutoring institutions in Indonesia)
  

  Total SAM = Rp85,825,000,000

Action Plans

1. Achieving SOM to target local areas is already profitable and covers all expenses
2. Collaborate with local government to arrange with the greatest potential which comes from schools
3. Give attention to international schools because of their affordable fees