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Definition

What is Total Available Market (TAM)?

Total Available Market (TAM) is a term used in marketing to refer to the total market demand for a product or service. It represents the total revenue opportunity that exists within a specific market. In other words, it is the maximum potential size of a market, in terms of revenue.

To calculate TAM, you need to identify the total number of potential customers in a market and multiply that number by the average price of the product or service. This gives you an estimate of the total amount of money that could be made by selling a product or service to every potential customer in a market.

TAM is a useful metric for companies to understand the size of the market they are operating in and to determine the potential for growth. It can also be used to help set marketing and sales targets, as well as to help allocate resources for product development and marketing efforts.

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