How do I approach vague market sizing questions?

Hi,

As usual, if the question is vague you should first try to clarify the scope with the interviewer :

- what's are the revenu we want to consider ?

- what's the geographic perimeter ?

- How granular should we be in hyp. definition ?

BEst

Benjamin

Hi,

To be honest, your question is quite vague since it has no further explanation or an example.

Based on my understanding of your question, you should ask the clarifying questions that will help you narrow down the objective. E.g.:

• Are we talking about only b2c or also b2b market? (e.g. tires market)
• Are we talking about men or women? (e.g. business suits market)
• Are we talking about private real estate or commercial real estate?
• Etc

Best

The real answer is depends. Each mkt sizing question is different and needs to be solved in a different way

You usually have bottom-up and top-down approaches. A good start is to try to understand first which one would work best/ would be the most effcient way to get to an accurate estimate. Once you select a methodology you can start drafting the path to the solution in your head. 

Also, leverge your interviewer to check your ideas.

Hope that helps a bit

Tommaso

Hi there,

Providing some market sizing thinking for anyone revisiting this Q&A:

Remember that there's rarely a "best" answer with market sizing. What's important is that you break down the problem the way it makes sense to you. Importantly, break it down so that the assumptions you make are the ones you're most comfortable in.

For example, do you know all the major brands? Great go with that. Do you understand all the segments of that country's population (either age or wealth or job breakdown)? Go with that. Do you know the total market size of the tourism (or hotel) industry? Then break it down that way.

Some tips:

1. Just like in a case, make sure you understand the question - what are you really being asked to calculate
2. Decide whether a top-down or bottom-up approach is best
3. Figure out what you know you know, and what you know you don't know, but could estimate
   1. This helps you determine how to split out buckets
4. Stay flexible - you can start with a "high-level" market sizing, but gauge your interviewers reaction....if it looks like they want you to do more...then go along level deeper in terms of your splits