About the mkt sizing using # of families

Question

Why do we have to take into consideration the usage time of a stroller? Isn't this a product that is only for newborn babies? I assume that we don't have to renew the old stroller anymore since the babies who use the stroller have already grown up.

Answer 1

Hello!

Thank you so much for reading my case, I hope it´s helpful! I chose this topic because I see many people struggling with market sizings, which are very easy to do whenever you know how to!

What do you mean precisely with usage time?

There are two ways:

Approach 1: Estimation leveraging # of babies born:

Calculate number of babies born every year in the US > 330 M inhabitants / 80 years lifespan = ~4,3M babies.
Calculate number of babies per family > Since the average is 2 children/ family, 50% are first child = ~2,1 M babies are 1st born
Assume that 90% of first children receive a new stroller while only 10% of second, third children receive a new stroller (90% inherit the stroller from the previous child) > ~2,1 stroller
1. 2,1 M * 0.9 = 1,9 M strollers for first children
2. 2,1 M * 0.1 = 1,2 M strollers for children who are not first born in the family
BONUS: Average price of 200$ = ~$412 M is the total market (*further break down could be done here for purchasing power of families)

Approach 2: Estimation leveraging # of families:

Calculate number of families currently in the US > 330 M inhabitants / 3 people per household = ~110 M families
Calculate how many households are families with children - assume 80% > ~110 M * 0.8 = 88 M families
Calculate how many families buy a stroller - assume 80% > ~88 M * 0.8 = 70.4 M families
Calculate how many strollers are bought per year (since we had the total number of strollers existing in the US) - assume 30 years as the time in which a family buys a stroller > 70.4 M families / 30 = 2.3 M strollers bought yearly
BONUS: Average price of 200$ = ~$470 M is the total market (*further break down could be done here for purchasing power of families)

Hope it helps!

Cheers,

Clara

Answer 2

What about siblings, people wanting more than one baby would consider how many children they may have in the future and how many years of stroller usage they can get when purchasing. You wouldn't generally buy a new stroller for every child.