World Market size of luxury stereo systems

Question

Dear all,

How would you approach the question "what is the world market size of luxury stereo systems?"

What are relevant assumptions here?

Many thanks in advance!

Answer 1

Hi, I would frame it dividing the problem into 2+ parts, after clarifying with the interviewer (e.g. home stereo systems, car stereo, ...). For instance, about the car stereo I would imagine to structure it like a penetration on the premium and luxury segment {e.g. estimate n. of cars, % of the premium (20%?) and its luxury stereo penetration (20%?), % of the luxury (3%?) and its luxury stereo penetration (80%?)}. What do you think?

I would like to suggest similar cases in the platform to practice with:

https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692

Hope it helps,
Antonello

Answer 2

Hi there,

I see from your comments in the prior answers that your main concern is regarding the "world" aspect of this sizing.

If you would like to take your previously provided response for a country, you can then extrapolate it! Here's what it looks like:

1) Answer from your country estimates (let's say the US) = x

2) Breakdown of world

Western Europe = x
Eastern Europe + Russia = .5x (about the same pop but less developed)
Central + S America = .5x (about the same pop but less developed)
India = x (much larger but much less developed)
China = 1.5x (much larger but less developed)
East Asia = 2x (same size and about as developed)
SE East = .5x (same size and less developed)
Africa = .5x (much larger but much less developed)

So, you can estimate your answer to be the # for the US times 7.5 :)

Answer 3

Hello!

I would always recommend you to give it a shot and then post it here, this would help you the most.

This is a very typical market sizing case, where the key steps are:

Calculate the total population

Calculate the % of population that could be interested in this product (this could be done by clustering -the classical ones are age groups, purchaching power, etc.-)

Calculate the % of the total adressable market that any firm in particular could have -in case it´s asked only-.

Hope it helps!

Cheers,

Clara

Answer 4

Hi A!

Why don't you practice and present your approach? Than we can comment and make suggestions?