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

Question

Deleted · Accepted Answer

Hi Firas,

An interesting question. If I were to receive such a question in an interview, I would start by clarifying a few things:


	Should I estimate the number of hot dogs sold, or the number of hot dog eaters?
	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:


	Remove people who cannot eat hot dogs (e.g. new-born babies, terminally-ill elderlies, people under specific health conditions, religious reasons, etc.)
	Filter by age: assumption here is that certain generations are more likely to consume hot dogs.
	Filter by weight: assumption here is that heavier people are more likely to consume hot dogs.
	Filter by district/location: assumption here is that people from certain parts of NYC are more likely to consume hot dogs.
	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.

Udayan · Answer

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

Ivan · Answer

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.