*TAM*

* Total number of people in Laguna: 3 million

* Average revenue per customer: ₱5,000
* TAM = 3 million x ₱5,000 = ₱15 billion

*SAM*

* Percentage of people in Laguna who are likely to rent a vehicle: 10%

* SAM = 3 million x 10% = 300,000

*Penetration potential*

* Percentage of the target market that you can reasonably compete with: 20%
* Penetration potential = 300,000 x 20% = 60,000

*Penetration rate*

* Percentage of the target market that you expect to reach: 5%

* Penetration rate = 60,000 x 5% = 3,000

*Market size*

* Market size = 3,000 x ₱5,000 = ₱15 million

This means that the total revenue opportunity for a vehicle rental business in
Laguna, Philippines is ₱15 million.

Total Addressable Market (TAM):

-TAM represents the total market demand for a product or service.

-In this case, the total number of people in Laguna is 3 million.
-Assuming an average revenue per customer of ₱5,000, TAM is calculated as 3 million
x ₱5,000 = ₱15 billion.
-TAM gives you the maximum revenue opportunity if you captured 100% of the market.

Serviceable Available Market (SAM):

-SAM is the portion of the TAM that is within your geographical and operational
reach.
-The percentage of people in Laguna likely to rent a vehicle is estimated to be
10%.
-SAM is calculated as 3 million x 10% = 300,000.
-SAM represents the segment of the market that your business can realistically
target based on various factors like location, accessibility, and customer
preferences.

Serviceable Obtainable Market (SOM) or Market Size:

-SOM, or Market Size, is the portion of SAM that you expect to capture based on
your competitive advantages, marketing efforts, and business strategy.
-The penetration potential, which represents the percentage of the SAM that you can
reasonably compete with, is 20%. So, 300,000 x 20% = 60,000.
-The penetration rate, which represents the percentage of the target market you
expect to reach, is 5%. So, 60,000 x 5% = 3,000.
-Market Size or SOM is calculated as 3,000 x ₱5,000 = ₱15 million.
-This represents the revenue opportunity your business can realistically achieve
based on your market penetration strategy.
In summary, TAM provides the overall market potential, SAM narrows it down to a
feasible segment, and SOM represents the specific portion of the market you plan to
capture and generate revenue from. This structured estimation helps businesses
understand the market dynamics and make informed decisions about their market entry
and growth strategies.