What is the “Total Available Market” (TAM)?

The Total Available Market refers to the total demand for a product or service across all segments, all possible substitutes or alternatives and via all potential channels i.e. it is the total demand available to a supplier if they were the only provider of a product or service and no alternatives were available.


In understanding the TAM, it is important to make a distinction from the SAM (Served Available Market) that sits within it. The Served Available Market is the more specific or defined market that an individual supplier will serve – perhaps as a premium supplier; operating through certain channels or offering a particular or niche product within the wider market.

The TAM is best illustrated by way of a couple of examples:

TAM example 1: Hot drinks machines

Imagine a supplier of coffee vending machines for locations such as petrol stations, small supermarkets or sports clubs is looking to understand the size of their market and the future growth opportunity.

Identifying the Served Available Market would require an understanding of the demand for coffee among users of such venues i.e. the number of venues, the number of users of such venues and the proportion likely to purchase coffee when they are there.

The Total Available Market would extend beyond this to include all types of beverage that could be considered as an alternative to coffee i.e. hot and cold drinks and all of the different places from which they could be purchased i.e. café, fast food outlet, other vending machines, chilled counters etc.

TAM example 2: Metal screws

Alternatively, consider a supplier of metal screws selling through online channels to the trade. Whilst their Served Available Market would consist of competing screw suppliers offering similar products through online channels, the Total Available Market could extend to include all types of fixings (screws, nails, adhesives etc.) available through all channels i.e. online/offline via retail, distribution or direct from the manufacturer.

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