Hi
Can you help me with this question?
If you open a cafe in a metro station, how would you calculate the market size? as it is mainly driven by metro users
Thanks
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Hi there,
Great question — here’s how I’d approach this using a structured, equation-based method, just like in a real consulting case.
Structure / Equation:
Market Size (€) = Daily Footfall × % Addressable × Conversion Rate × Average Spend × Days Open per Year
Let’s walk through each step with grounded assumptions:
1. Daily Footfall
Estimate how many people use the metro station each day.
Assume: 100,000 passengers/day
2. % Addressable Market
Not all will consider buying.
Assume: 10% → 10,000 potential café customers/day
3. Conversion Rate
Portion of addressable market who will actually purchase.
Assume: 6–8% → 600–800 paying customers/day
4. Average Spend per Customer
Typical coffee + snack.
Assume: €3.50
5. Days Open per Year
Most metro cafés operate daily.
Assume: 365 days
Calculation:
- Lower bound: 600 × €3.50 × 365 = ~€767,000/year
- Upper bound: 800 × €3.50 × 365 = ~€1,022,000/year
Estimated Market Size: ~€770K–€1.02M per year
You can tailor this further by factoring in peak vs. off-peak variation, seasonality, or commuter demographics. But the above gives a clear and defendable starting point.
Happy to help you prep – feel free to reach out.
Best,
Evelina
Hi,
It would be better if you could share a proper attempt at the answer, including structure and/or assumptions.
This way you could get more targeted and effective feedback, and you get to practice your thinking rather than relying on someone to feed you the answer. If you are really new to market sizing, and really have no idea on how to tackle a sizing question, then you can read this great PrepLounge article and then try it for yourself: https://www.preplounge.com/en/case-interview-basics/market-sizing
As a high level hint for you in your attempt - this question is most effectively done from a bottom-up POV.
Hey!
Sure! I’d start by estimating daily foot traffic at the station, then assume a % of those who might buy coffee (e.g. 2–5%). Multiply by average spend per customer, then by days open per year. That gives you annual revenue = your market size.
Happy to walk through numbers if you want!
Best,
Alessa
Hi there,
This is a cool prompt, but you stand to benefit more if you share with us your approach and then we can provide feedback on it. Ideally try to come up with two approaches, just so you can push your thinking around how to tackle such an exercise.
Best,
Cristian
Just to add - ChatGPT can help with this kind of thing now (within reason)
Hey,
Completely agree with other coaches.
Also, if you are looking to master the market sizing question and improve your math skills, I highly recommend:
Hi there!
Alessa already gave a reasonable structure. Are you struggling with this type os question? The one you posted is a rather basic one, take a look at Crafting Cases free course, they have a market sizing session that is good.
Best,
Mari
