Market Sizing Doubt

Market sizing
Neue Antwort am 31. Dez. 2021
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Javier fragte am 9. Okt. 2018

Hi, I would value anyone's point of view about this market sizing question. Just so you do not get shocked on how useless I am, I have no Case Interview experience whatsoever;) I work at an international bank within the M&A division, and never got asked these when going through recruiting (luckily for me)

So the other day I was asked, during an interview with a Fintech, to calculate the number of coins that are thrown each year to the Trevi Fountain (in Rome).

So I think the easiest way possible (it seems my answer was far from being right since I was rejected;))---> number of annual tourist x coins per tourist + number of romans x coins per roman

I segmented the number of tourists by season (assuming summer brings more tourists) and made up the numbers for each season.

To calculate the number of thrown coins per tourist/roman I divided between high income, medium income and low income, assuming tourists had a higher proportion of high income people.

Again, I completely made up the number of coins per each income segment.

The outcome of the interview, even though my interviewer told me the reasoning was ok, was me being rejected...

I don't really care that much about that specific interview since that company didn't attracted me so much, but I realle need to know how you guys would have solved that question if given the chance.

As I said, any comment, point of view, help would be more than appreciated, really.

Thank you in advance,

Javier

The other day I was asked during an int

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Anonym antwortete am 9. Okt. 2018

Hi Javier!

I do see where your reasoning comes from - personally I would've segmented the coin-throwers differently. The segmentation of tourist and Roman makes sense, as the two categories would certainly impact the number of coins thrown in per year. However I'm not sure income would necessarily impact the number of coins thrown - actually, it may even be the opposite correlation from what you expect, as lower income people tend to be more superstitious.

I guess the key here would be identifying a broader market size and narrowing down with relevant. You could even make an educated guess that realistically only tourists will significantly impact the number of coins tossed into the fountain.

E.g. Annual visitors to Rome*proportion visiting Fountain Trevi*proportion throwing coins into fountain*average number of coins per throw

I would say your approach perhaps missed a few steps e.g. do all tourists in Rome visit the fountain? Does every tourist toss a coin in? Do locals actually toss coins in?

The key to market sizing is a balance of real-world sense and sound logical reasoning. Although I can follow your steps, I don't think the segments you produced were the best ones to use.

I hope that helps!

Kay

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Benjamin
Experte
antwortete am 10. Okt. 2018
ex-Manager - Natural and challenging teacher - Taylor case solving, no framework

Hi,
I would proceed a bit differently, skipping the sgementation per income and introducting the tourist group size and coin / group instread (assuming in a family for instance, not everyone is throwing a coin..?)

# tourists visiting / Average tourist group size X average amount thrown for a group

Keep in mind that there is no unique solution for market sizing so yours would be valuable as well, and you might have been rejected for other reasons than the market sizing inself, unless it was more a behavioural concern during the sizing.

BEst
Benjamin

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Anonym am 13. Okt. 2018

You obviously don't have kids :-) If you throw a coin, MOST DEFINITELY your children will want to throw one as well. And you're asking for drama if oyu only let one kid throw a coin, but the others not... :-D

(editiert)

Ian
Experte
Content Creator
antwortete am 31. Dez. 2021
MBB | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi there,

Providing some market sizing thinking for anyone revisiting this Q&A:

Remember that there's rarely a "best" answer with market sizing. What's important is that you break down the problem the way it makes sense to you. Importantly, break it down so that the assumptions you make are the ones you're most comfortable in.

For example, do you know all the major brands? Great go with that. Do you understand all the segments of that country's population (either age or wealth or job breakdown)? Go with that. Do you know the total market size of the tourism (or hotel) industry? Then break it down that way.

Some tips:

  1. Just like in a case, make sure you understand the question - what are you really being asked to calculate
  2. Decide whether a top-down or bottom-up approach is best
  3. Figure out what you know you know, and what you know you don't know, but could estimate
    1. This helps you determine how to split out buckets
  4. Stay flexible - you can start with a "high-level" market sizing, but gauge your interviewers reaction....if it looks like they want you to do more...then go along level deeper in terms of your splits
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Javier antwortete am 13. Nov. 2018

Hi, sorry for the delay!! I read your answers weeks ago and found them really insightful and helpful but have had some issues logging through my office's computer. It surprises me how everyone in this website is so nice and keen to help. Again, thank you both, Kay and Benjamin Best regards!!!

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