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Leif

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How can I market size the number of hot dog eaters in NY city from the demand side?

Anonym fragte am 3. Sep 2019 - 3 Antworten
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Leif
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bearbeitete seine Antwort am 4. Sep 2019
BCG | Kellogg MBA | 5 years of case coaching experience | 200+ candidates coached
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4 Meetings

78 Q&A Upvotes

209 USD / Coaching

Hi Firas,

An interesting question. If I were to receive such a question in an interview, I would start by clarifying a few things:

  1. Should I estimate the number of hot dogs sold, or the number of hot dog eaters?
  2. How is "hot dog eater in NYC" defined?

Once I have those two questions answer, I would start with the NYC population, and apply (some if not all of) the following filters:

  1. Remove people who cannot eat hot dogs (e.g. new-born babies, terminally-ill elderlies, people under specific health conditions, religious reasons, etc.)
  2. Filter by age: assumption here is that certain generations are more likely to consume hot dogs.
  3. Filter by weight: assumption here is that heavier people are more likely to consume hot dogs.
  4. Filter by district/location: assumption here is that people from certain parts of NYC are more likely to consume hot dogs.
  5. Filter by nationality: assumption here is that people from certain countries are more likely to consume hot dogs.

Each of these filters apply a certain percentage number to the NYC population, and the result would be my answer to the question. In a real interview, I would probably use only 2-3 of the filters mentioned above, instead of all of them.

(editiert)

Udayan
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bearbeitete seine Antwort am 3. Sep 2019
Ex McKinsey EM with 7 years of recruiting experience/ received all 3 MBB offers/Real MBB cases
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19 Meetings

74 Q&A Upvotes

149 USD / Coaching

Estimate the population in NY city at a given time - let's say 25M (including tourists etc)

Then think of who typically has hot dogs and where. Some examples are

1. Sports games

2. Tourist venues - Brookln Bridge, Time Sq, Central Park etc.

3. Impulse buys

Estimate attendance at sports games (safe to say 20k at any point - going up to 150k for special events).

Estimate number of tourists - either based on facts (50M a year = 1M a week or day (assuming everyone stays for a week) or estimates - x% of population is tourists (2-5% seems reasonable)

Impulse buys are harder but you can use assumptions such as No. of non tourists visiting tourist areas and what % of those may buy (I would say <1% but work with a number that is easy)

Add all 3 numbers up to get an estimate

(editiert)

Ivan antwortete am 5. Sep 2019

A few considerations upfront:

  • demand side = hot dog for lunch for office workers and tourists. People who have day off would prefer to eat at home or live outside of NYC. Assumption: people would have a dog for dinner/breakfast.
  • Average dog price in NYC = $2

Consider office workers:

As an office worker (located predominantly in Lower Manhattan), I would have the following food options for lunch:

  • Dog $2 + Drink $1.7
  • Leon/Pret etc as take away ($5+)
  • Food delivery ($6-7)
  • ...

Hypothesis: Hot dogs compete against another food options offering a cheaper meal for price sensitive office workers.

Number of office workers:

  • NYC has around 8m population,
  • Thereof 6m are working age,
  • Thereof 2m are employed and work in an office,
  • Thereof 1m have offices in NYC
  • + 0.5m is communiting from outside (Jersey)
  • Leads to 1.5m office workers in NYC.

Assumption: 10% have a dog for lunch --> 150k workers

Market size (demand side) on a week day: 150k x $2 = $300k

Market size p.a. $300k x 180 working days = $54m p.a.

Consider tourists:

50m tourists p.a. --> 1m a week, 150k a day.

20% try a dog: 30k * $2 = $60k a day

Market size p.a. = $60k * 365 = $21.9m

TOTAL MARKET SIZE = 21.9 + 54 = approx. $76m p.a.

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