Market size question: band-aid market in Australia each year

Question

Hi, may I know if my approach sounds reasonable to you, and does anyone has a better approach?

#band-aid consumed x $/band-aid

1. Household uses

HH numbers x 1 box of band aid (50 pieces) consumed each year

10M * 50 pieces = 500M pieces

2. Office uses

# of working places with an average 50 working staff x 1 box of band aid for a location with 50 employees per year

= # working population x 1 piece of band aid each year

25M x (65-20)/80 = 14M

(This part, I honestly think it's not exclusive since schools prepare band aids for students, shopping malls prepare band aids for customers etc., so I may reframe this bucket as “out-side of home place”, and 1 band aid is made available for 1 person ==> 25M band aids sold.)

3. Health case system uses

# GP visits * 1 piece of band aid used each time

assuming on average people visit GP one every quarter (of course this can be further broken down by age groups)

25M/4 x 1 = 6.25M

==>

Total band aid pieces used per year in Australia 500M+14M+6.25M = 520M

$0.10/piece

Market size = 52M

Sense check: 52M/25M = $2.08, each person spends $2 on band aid each year, seems reasonable.

Thanks.

Answer 1

Hi there,

You've overcomplicated this!

Remember that the point of segmenting is to HELP you estimate better.

Market sizing is NOT about making things complicated for the sake of it.

Quick question: Which of the following do you know better:

1) How many bandaids an office/hospital use

2) How many bandaids YOU use/need?

Take yourself, your annual bandaid use, and then compare it to a segmentation of the population that actually makes sense (hint, not households).

The youngest and oldest populations probably need/use more bandaids…so segment this way!

Please don't do households AND hospitals AND offices…you're not being MECE…just get the average Australian and multiply by 20M (segmented by age).