Hello, I had an interview last week and I ve been asked for the market size of a global leather tannery operating worldwide and having as client Luxury Brands (i.e. Gucci…). How would you approach it?
Any other example of B2B market size to exercise ?
As any market sizing issue, you can approach it from the demand side or the offer side.
One way, from the demand viewpoint, could be trying to estimate how many final customers are there in this market. If you take the global population, probably only 1% of the people or so are to be considered in the “luxury” segment. You could assume that this luxury group purchase an average of 10 leather luxury items in their lifetime. Do we know more about these items? Can we assume for example that mostly women instead than men use them? And then you go from there.
Anyway keep in mind that any market sizing can be approached from many viewpoints and what are the end matters is not the final number you come up with but the reasoning and logic that you show.
Dear candidate,
a) I would look at the underlying drivers. So clarify if only luxury fashion brands are in scope or if other clients who use leather are also considered
b) In case only luxury brands are in scope as clients, it is easier of course, so we are looking for the demand of these brands and understanding the drivers behind that, e.g., size could be sum of average amount ordered * average price ordered per product category. the drivers behind this could be consumer taste and changes of that, income level, growth of income levels. you could go on to discuss what makes someone choose a luxury brand and of course clarify if they are allowed to serve all luxury brand markets or have restrictions in that respect
c) Use these drivers to estimate the market size
Best regards,
Charlotte
Hi Elena,
Here are a few B2B examples:
