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Paul

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How many lipsticks does Tom Ford sell every year?

Can I break it down by family incomes and gender?

Can I break it down by family incomes and gender?

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Hi Samantha,

many possible segmentations here. I would use a "top-down" approach starting from the population (e.g. 320 Millions)

I think the most useful segmentation is the one that allows you to easily came up with "backupped" answer based on your experience (on lipstick). Therefore I would choose gender and age over gender and income since for me it is easier to come up with a % of woman using lipstick in an age range than in a income range.

I would therefore

1) Start with gender (approximately xx % women in US) -> [Total Women in US]

2a) Break down by age (e.g. under 15 age no lipstick) and backup a "top-down" assumption about the % of women using lipstick in each age bracket based on experience, data, whatever you know( I would ask the interviewer before going on segmenting too much - just stop at the right level) -> [Total women using lipstick in the US]

3) Come up with a # of lipstick owned per women using Lipstick -> [Total lipstick owned in the US] = [Total wome using lipstick in the US] * [avg. # of lipstick owned / woman]

4) Remember they are asking about "every year" so it is annual sales. Therefore use the "useful life" rule to divide the [total lipstick owned in the US] by the months / years it takes to consume (or stop using) a lipstick

Hope this helps.

Paul

Hi Samantha,

many possible segmentations here. I would use a "top-down" approach starting from the population (e.g. 320 Millions)

I think the most useful segmentation is the one that allows you to easily came up with "backupped" answer based on your experience (on lipstick). Therefore I would choose gender and age over gender and income since for me it is easier to come up with a % of woman using lipstick in an age range than in a income range.

I would therefore

1) Start with gender (approximately xx % women in US) -> [Total Women in US]

2a) Break down by age (e.g. under 15 age no lipstick) and backup a "top-down" assumption about the % of women using lipstick in each age bracket based on experience, data, whatever you know( I would ask the interviewer before going on segmenting too much - just stop at the right level) -> [Total women using lipstick in the US]

3) Come up with a # of lipstick owned per women using Lipstick -> [Total lipstick owned in the US] = [Total wome using lipstick in the US] * [avg. # of lipstick owned / woman]

4) Remember they are asking about "every year" so it is annual sales. Therefore use the "useful life" rule to divide the [total lipstick owned in the US] by the months / years it takes to consume (or stop using) a lipstick

Hope this helps.

Paul

Hi Paul, thank you for the quick reply! I can tell the logic behind your four-step solution. I think it is a good way to estimate the general lipsticks sales. However Tom Ford lipsticks are much more expensive than most other brands' lipsticks. That's why I want to take income into consideration. — Samantha on Aug 14, 2019

Tom Ford is known for male fashion; I expect this number to be very low.

Tom Ford is known for male fashion; I expect this number to be very low.

Tom Ford's cosmetic products are getting more popular now. — Samantha on Aug 14, 2019

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