Market sizing question

Question

Hi all,

How would you solve the question "How many wedding dress are sold in UK each year" ?

Can we apply replacement theory to this question ?

Thanks !!

Shiyu

Answer 1

Hi, Maybe not the most accurate way to come up with a number, but it's fast :

Data:

- Population of UK: 65M

- Life expectancy: 80 yo

Assumptions:

- Percentage of women: 50%

- Percentage of women that will get married: 70% (You can argue that it's based on your observations / family etc.)

Then:

- Number of women: 65M*50% = 32.5M

- Number of women that will buy a dress: = 32.5M*70% = 23M = Number of dress sold in 80 years (the expectancy of the population)

- Number of wedding dress sold every year: 23M / 80 = 290k

Of course, some people might buy more than one dress, the population might grow etc. but at least you get the order of magnitude in seconds...

Answer 2

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:

Just like in a case, make sure you understand the question - what are you really being asked to calculate
Decide whether a top-down or bottom-up approach is best
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
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