You’re a consultant based in Germany who is currently en route to a client in France who sells golf balls. You’re thinking about the client trying to figure out how large the market is for golf balls in France in terms of number of balls purchased each year.
This is a brain teaser meant to test the candidate's logical thinking.
There's no right answer, just a right approach. Interviewer should look for candidate's ability to think logically and make realistic assumptions.
Kurzlösung (Ausklappen) (Einklappen)
Suggested case structure:
To determine the market for golf balls, the candidate should first think of a structure to calculate the total market size for golf balls. The candidate should develop an issue-tree that explains his assumed way of going about this.
- Total population of France is 60 m.
- All other data & information is to be assumed by the candidate.
Once candidate explains structure, you can share an issue-tree with him to assist.
Candidate should first try to segment the population into appropriate age groups to determine the amount of people that play golf. In our case, we have three segments we can use. We assume that these age groups represent 75% of total population which is 75%*60 m=45 m.
We also assume that our age-segments are equally distributed amongst these 45 m people. The remaining 15 m people are the people under 15 years old and above 60 years.
- Segment A: 15-30 years which represent 15 m people.
- Segment B: 30-45 years which represent 15 m people.
- Segment C: 45-60 years which represent 15 m people.
Now candidate should run his assumptions to see which portion plays golf for each segment. Interviewer should challenge candidate on these assumptions for validation & logical reasoning.
- Segment A: A young age-group which is just learning the game of golf, so let's set it at 5%.
- Segment B: More senior people who play golf for relaxation 1-2 times a week, so let's set it at 15%.
- Segment C: Main target group for golf who play during business & leisure, so let's set it at 25%.
The second assumption we make is how many games each person plays a year and how many new balls they need to purchase. Let's keep that number uniform across the segments and use 30 games with 6 new balls per game.
Now candidate can estimate total size.
- Segment A: (15 m*5%)*(30*6)=135 m.
- Segment B: (15 m*15%)*(30*6)=405 m.
- Segment C: (15 m*25%)*(30*6)=675 m.
Total market size for golf balls is (135 m+405 m+675 m)=1,215 b golf balls.
Which value drivers affect the demand for golf balls?