# Regarding the replacement concept I wonder when to use average number of households & when to use a view per person?

Market sizing
Neue Antwort am 2. Juli 2021
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1) E.g. Average number of household seems accurate to estimate number of cars sold in the US in one year or for number of light bulbs because you look at it from a household perspective. What about number of laptop or smartphones? In my opinion, I would use a view per person here and say for example that every person has a smartphone except childern and maybe elderly people (depending also on the country).

2) In the two videos about the replacement concept (cars and light bulbs): are we accurate when estimation the total number of existing light bulbs/cars by only considering households. There is also rental cars, business cars, taxis etc. which we don't include? Same for light bulbs: what about restaurants, hotels, offices etc.

Thanks for your help. Really appreciated

(editiert)

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Hi Catrina,

Great questions!

1) Yes, some items are bought at a household level (cars, beds, lightbulbs, etc.) and some items are bought at an individual level. Use your judgement here, and segment accordingly. Laptops/phones are indeed individual purchases!

2) You are right here as well. Where there are multiple "markets" for a market sizing, you have 1 of 2 options. First, you can estimate the other market as some % of the one you just measures (I think businesses have about 10% as many lightbulbs as individual consumers). You can do this is there is a reasonable corrollary and you can make a reasonable assumption. Your second option is to market size that market seperately. You need to do this is it's quite sizeable and/or it's hard to says it's x % of the other market.

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Hi Ian, Many thanks for your helpful answer! In particular, the second comment clarifies a lot for me. Really appreciated.

1.) I agree with your conclusion. Whatever makes it easier for you to get to a mental benchmark is the preferred way. If a household is the way to think about cars or lightbulbs, than it makes sense to break those down on a household level.

2.) You're right: To calculate the full market size you'd need to take commercial applications as well.

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