Estimating commercial side of market

Guessestimation Market sizing
Neue Antwort am 28. Nov. 2022
3 Antworten
173 Aufrufe
Anonym A fragte am 28. Nov. 2022

Hi Preplounge, 

Something I noticed while practicing market sizing was that most cases only seem to consider the private/household side of the market, and there is very little guidance on how to estimate the commercial side. 

This leaves 2 options:
1. Ignore this segment which will cause interviewers to wonder if this was missed
2. Propose this and pray the interviewer says we can ignore it

When asked to size the commercial side, I usually opt for one of the two approaches:
1. % of household market 
2. # of commercial buildings as a driver (but this is not robust since some commercial buildings are multi-storied offices and it is hard to narrow down what % of the buildings are for relevant industries).

Is there a more robust way of estimating the commercial side? Say, when estimating the size of the bucket/pail market in Thailand, how can we estimate the buckets purchased by businesses?  

Thanks!

Übersicht der Antworten

Upvotes
  • Upvotes
  • Datum aufsteigend
  • Datum absteigend
Beste Antwort
Ankit
Experte
antwortete am 28. Nov. 2022
BCG I Strategy& I 12+ years of professional experience

Hi 

Well, to answer the first part of your question - never ignore the segment if it is one of the drivers for the market sizing. Make sure you highlight it as part of your initial structure and clarify with the interviewer if they would like you to focus on any particular segment. 

Now for the second part, when the interviewer expects you to calculate market size associated with commercial segment - 1) you can either take it as a percentage of the household segment as you highlighted  (as long as the assumption for proportional split is backed by some logic) or 2) you could look into the biggest segment that drives the commercial market size (could be hospitals, retailers etc) and just focus on that particular segment (and again take a proportinal split to calculate the whole commercial market size) 

hope it makes sense. You can message me offline if you have further clarifications. 
 

good luck! 

War diese Antwort hilfreich?
Ian
Experte
Content Creator
antwortete am 28. Nov. 2022
MBB | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi there,

Ankit is exactly right in his answer.

Remember that this all depends on the question at hand. Ultimately, for any market sizing, you need to segment out in a logical way that moves you away from guessing and towards estimating.

If we're talking beds/cars for example, generally it's assumed you don't need to consider corporations. That said, you can always “double-check” and say “just to be sure, we're looking at x”.

If we do need to account for the B2B side, then generally taking a % works. But, again, it depends. If we are talking beds, then you probably do need to market size the hotel/rental market separate. If we're talking cars, you can say it's about 5% of the B2C market.

At the end of the day, it's all about how you logic through the problem!

War diese Antwort hilfreich?
Rushabh
CoachingPlus-Experte
Content Creator
antwortete am 28. Nov. 2022
Immediately Available! | 50% off 1st Session | BCG Expert | #1 in Middle East | 80+ Mocks Delivered | Free 30 Min Intro!

Hello,

I think you should definitely acknowledge the commercial side in the market, because as you mentioned, the interviewer could point out that you missed it.

There are 3 ways this can go:

1) The interviewer asks you to ignore it: Great!

2) You agree with the interviewer that you will do the detailed sizing for the household market and assume that the household market is say 60% of the total market. Thus you divide the household market size number by 60% and get the total market including the businesses. 

This approach is the best because it shows that you've thought about the commercial side, and have also made a good and quick estimate.

3) This is when the interviewer is trying to stress test you and asks you to do the full market sizing of both the household and the commercial market - at the same full level of detail. This is obviously going to take a lot more time, and also you would need to separately identify the drivers of both these markets.

All the best!

Rushabh

War diese Antwort hilfreich?

Ankit

BCG I Strategy& I 12+ years of professional experience
22
Meetings
351
Q&A Upvotes
1
Award
5,0
9 Bewertungen