CH08-EX02. Groundwater Level Sensor — B2G Effective Market Sizing Example

• Related Chapter: CH08. From Qualitative to Quantitative — Effective Market Sizing and P×Qty
• Related MN/KM: MN07 / KM062

Think it through

This is a B2G case of groundwater level sensors. The buyer is a public institution, and procurement volume is affected by government budgets and legal obligations.

1. Can equipment price multiplied by the number of potential installation targets be taken as the effective market? If not, why not?
2. What factors make the actual effective market vary?

Show answer and walkthrough

• What this example illustrates: how, in a B2G transaction, Qty is not simply the number of potential installation targets but is constrained by legal obligations, budget line items, and access channels.

Content

In the groundwater level sensor example, the buyer is a public institution, and procurement volume is affected by government budgets and legal obligations. Even if you calculate equipment price multiplied by the number of potential installation targets, the result cannot exceed the budget range that can actually be executed in the public market.

What this example shows is that Qty in B2G is not simply the number of institutions. The actual effective market varies depending on whether there is a legal obligation to install or manage the equipment, which budget line item it is executed from, how large that budget is, and whether the approach to the public institution is direct sales or a partner channel. In the public market, institutional rules and budget act as an additional constraint that defines market size.

Source

Doctoral dissertation (2022), B2G case, Step 9 “Effective Market Sizing”; analysis of the price, channel, budget, and legal basis of the B2G case.