By Jim Lucy, Chief Editor; Jan Rabinowitz, Senior Research Manager; and Doug Chandler, Executive Editor
Nov 1, 2007 12:00 PM
Use this guide to calculate market share, evaluate potential new markets and analyze changes in market segments.
The multipliers are useful if you want to assess the relative size of various customer markets in dollars in the defined area. You can go on from there to do such things as select markets for new or increased sales efforts, advertising and promotion.
These forecasts give you handy ballpark figures for your business plans and general thinking.
Estimating the size of the market with multipliers is a process of building up a sales potential, piece by piece. Electrical contractors in Salt Lake City, Utah, employ around 4,109 people, so the potential market for electrical contractor sales there would be 4,109 times the electrical contractor multiplier of $43,743 for a total of $179.7 million in potential electrical contractor sales. You would do the same for each of the other customer markets electrical distributors serve to reach a grand total for Salt Lake City.
Using multipliers results in a dollar figure for market size that tells the level of business electrical wholesalers in the area could do if every potential customer there bought a typical amount of product from them. It tends to be a larger number than actual distributor sales.
2007 NATIONAL MULTIPLIERS
Market
Economic Factor
Multiplier
Contractor
Number of electrical contractor employees
$43,743
Commercial/Institutional
Number of people employed in professional and business services, retail trade, financial activities, educational and health services, leisure and hospitality, and other services
$133
Industrial MRO
Number of manufacturing employees
$838
Factory automation
Number of manufacturing employees
$194
OEM
Number of manufacturing employees
$570
Utilities
Number of metered customers
$33
Government
Number of government employees
$140
Mining
Number of employees among mining companies
$702
2006 SALES-PER-EMPLOYEE BY REGION
Region
Mean
Median
New England
$515,662
$433,620
Middle Atlantic
$390,314
$357,500
East North Central
$495,777
$392,308
West North Central
$358,195
$402,000
South Atlantic
$530,535
$400,000
East South Central
$339,768
$265,000
West South Central
$467,491
$290,000
Mountain
$780,986
$529,000
Pacific
$428,666
$426,915
Multi-Region
$538,122
$448,530
No Answer
$800,000
$800,000
NATIONAL SALES-PER-EMPLOYEE
Year
Market Planning Guide
Top 200
2006
$400,000
640,910
2005
478,413
593,506
2004
394,892
540,638
2003
319,704
469,536
2002
326,400
472,167
2001
326,400
505,386
DISTRIBUTORS' FORECASTS FOR MAJOR BUSINESS SECTORS (Forecast for 2007. Average percent change from 2006.)
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