Case

# SugarGums

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## Problemdefinition

Your client is a chewing gum manufacturer in the United Kingdom and you’re currently at the airport waiting for your flight. In the time that you have, you’re thinking about how big the annual chewing gum market is in the UK in terms of market value.

## Kommentare

This is a market sizing/estimation case so there is no right answer, but only a right approach.

Candidate should lay out his/her structure to estimate total market size. The request is for total market value so candidate is expected to give a monetary value.

## Detaillierte Lösung

Paragraphs highlighted in green indicate diagrams or tables that can be shared in the “Case exhibits” section.

Paragraphs highlighted in orange indicate hints for you how to guide the interviewee through the case.

Suggested case structure:

### I. Structure

Candidate should think about a structure first and explain this to the interviewer before starting to make assumptions.

When the structure is clear, candidate can start estimating by making his own assumptions without help from interviewer.

If candidate seems lost or needs help, interviewer can assist by giving hints below:

• First, assume total population of the UK.
• Secondly, think of which age group represents a heavy user of chewing gum or which age groups represent which consumption ratio.
• Thirdly, estimate how many gum-packs are being consumed per consumer (per week, month and/or year).
• Estimate price of a pack of gum and calculate total annual revenue.

### II. Analysis

We can make the following assumptions for our analysis:

• UK population is 80 m.
• Heavy user-group is between 10-20 years old and represents 20% of total population. Each user consumes 1 pack of gum per week.
• The remaining population of 80% consumes 1 pack of gum per month.
• Estimated price of a pack of gum is \$0.80.

### III. Solution

Heavy-user target group

• Heavy-user consumers: 80 m*20%=16 m.
• Heavy-user consumption per year: 16 m*52 weeks=832 m.
• Heavy-user market value per year: 832 m*\$0.80=\$665 m.

Rest of population

• Rest of population: 80 m*80%=64 m.
• Consumption per year: 64 m*12 months=768 m.
• Market value per year: 768 m*\$0.80=\$614 m.

Total market value

• \$614 m+\$665 m=\$1.28 b
• Total estimated market value per year is \$1.28 b.

## Schwierige Fragen

• Which drivers affect consumption of chewing gum per person?
• How would changes to your assumptions affect the market size estimation?
Verwandte Consulting-Fragen

The number of hairdressers depends on three main factors: # of haircuts done per year, time spent per haircut and capacity of each hairdresser. Number of haircuts: Number of haircuts depends on US... (mehr)

Hi there, I would start by asking some general questions to have a better feeling on the case: 1) Does our client provides this new service elsewhere? If not, does our client already has the cap... (mehr)

Beste Antwort bisher:

Hi Elisey, I would personally not recommend to use a single framework for all the so-called business situations (M&A, Entry, New product, Operations etc). Although this would help to more easil... (mehr)

Beste Antwort bisher:

Hey Philip, There are for sure several ways of estimating that number, but a quick top down approach can be resumed in 3 steps 1. Estimate the total population of the US: ~300M (I guess it's alrea... (mehr)

Hi there, Interesting case, let me give you my 2cents: Preliminary questions: - By market sizing are we focusing on volume or \$? - How big is the Pop. in Country X? - Is there any speci... (mehr)

Verwandte BootCamp-Artikel

## Market Sizing

Market Sizing Cases are used to test your quantitative and reasoning skills. The interviewer evaluates your structure, numbers-handling and business sense.

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## Important Facts

It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.

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Case-Exhibits