This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.
Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).
Would be great to get some insights how to structure the above market sizing case and share some results.
I tried to estimate it by segmenting for female and male population (males tend to consume more beer) and then for each I calculate how many beers they consume in a year divided by the amount of beers per sixpack package (6 obviously) in order to get the yearly amount of six pack packages. In order to calculate the yearly beer consumption I broke it down into consumption of beers per week for low consumers, middle consumers and heavy consumers of beer.
As an end result I got 7,2 billion sixpacks a year.
I do not find any information regarding the correct result. Furthermore, I have difficulties to exclude the individually sold beers and the larger than 6 packs packages (8, 13 packs) as well as the beer consumed in restaurants/bars in my structure. In my calculations above I assumed that beer will be consumed only via six packs - obviously not correct.
Thanks a lot!!,
Best, Cédric
Hey guys,
Would be great to get some insights how to structure the above market sizing case and share some results.
I tried to estimate it by segmenting for female and male population (males tend to consume more beer) and then for each I calculate how many beers they consume in a year divided by the amount of beers per sixpack package (6 obviously) in order to get the yearly amount of six pack packages. In order to calculate the yearly beer consumption I broke it down into consumption of beers per week for low consumers, middle consumers and heavy consumers of beer.
As an end result I got 7,2 billion sixpacks a year.
I do not find any information regarding the correct result. Furthermore, I have difficulties to exclude the individually sold beers and the larger than 6 packs packages (8, 13 packs) as well as the beer consumed in restaurants/bars in my structure. In my calculations above I assumed that beer will be consumed only via six packs - obviously not correct.
Thanks a lot!!,
Best, Cédric
1 answer
Upvotes
Date ascending
Date descending
Best Answer
Anonymous updated his answer on Sep 06, 2018
Cédric,
an important thing to keep in mind: There is no right answer for market sizing cases (I mean there is obviously the true number, which I doubt anyone knows for certain). But the number you come up with does not really matter as long as it is not obviously way, way off. If you'd say that the 300 mln Americans consume only 3 mln beers a year, then I would question your business sense and your judgment.
So the key to market sizing exercises is how you approach them. There is ONE THING that you need to show: Are you able to formulate a set of assumptions and hypotheses that get you a somewhat plausible answer?
The approach you took sounds pretty plausible:
Start with the entire population
Take out children
Segment into consumer groups (men, women, high / mid / low / zero consumption)
Assume a size for each group
Assume a level of consumption of six-packs for each group
Do the math
One word of warning, though. All these approaches have the tendency to get very complex very quickly - by step three you already had 8 consumer groups to keep track of.
It is ok to take some simplifying assumptions - like saying there is only high or low consumption, but nothing in between. You can usually see from the interviewer's questions or reactions if you're simplifying too much.
Also, make sure you are using round numbers as long as possible. Let's say you assume that 30% of the 300 mln Americans don't drink beer (minors, abstinents, people who don't like it, etc.) - that would get you a beer drinking population of 210 mln. It's totally ok to say in the interview that you continue the calculation with a simplified figure of 200 million. Makes things A LOT easier, as long as you make explicit what you're doing.
Last hint: Write shit down. Even if you can do the math easily in your head. And label the numbers!
Because:
A - helps you keep track of every assumption and interim result
B - easier to walk someone through your thinking
C - easier to spot mistakes
D - buys you some time
So our case might look something like this:
US population: 300 mln
Non-beer drinkers: 30%
Beer drinking population (BDP): 300 mln x (1 - 30%) = 210 mln (simplified: 200 mln)
Split male/female in BDP: 60 / 40
Male BDP: 200 mln x 60% = 120 mln
And so on...
Cédric,
an important thing to keep in mind: There is no right answer for market sizing cases (I mean there is obviously the true number, which I doubt anyone knows for certain). But the number you come up with does not really matter as long as it is not obviously way, way off. If you'd say that the 300 mln Americans consume only 3 mln beers a year, then I would question your business sense and your judgment.
So the key to market sizing exercises is how you approach them. There is ONE THING that you need to show: Are you able to formulate a set of assumptions and hypotheses that get you a somewhat plausible answer?
The approach you took sounds pretty plausible:
Start with the entire population
Take out children
Segment into consumer groups (men, women, high / mid / low / zero consumption)
Assume a size for each group
Assume a level of consumption of six-packs for each group
Do the math
One word of warning, though. All these approaches have the tendency to get very complex very quickly - by step three you already had 8 consumer groups to keep track of.
It is ok to take some simplifying assumptions - like saying there is only high or low consumption, but nothing in between. You can usually see from the interviewer's questions or reactions if you're simplifying too much.
Also, make sure you are using round numbers as long as possible. Let's say you assume that 30% of the 300 mln Americans don't drink beer (minors, abstinents, people who don't like it, etc.) - that would get you a beer drinking population of 210 mln. It's totally ok to say in the interview that you continue the calculation with a simplified figure of 200 million. Makes things A LOT easier, as long as you make explicit what you're doing.
Last hint: Write shit down. Even if you can do the math easily in your head. And label the numbers!
Because:
A - helps you keep track of every assumption and interim result
B - easier to walk someone through your thinking
C - easier to spot mistakes
D - buys you some time
So our case might look something like this:
US population: 300 mln
Non-beer drinkers: 30%
Beer drinking population (BDP): 300 mln x (1 - 30%) = 210 mln (simplified: 200 mln)
Split male/female in BDP: 60 / 40
Male BDP: 200 mln x 60% = 120 mln
Oliver Wyman case: Full Electrons AheadYour client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise them on how to adjust the product offering.
Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case
Bain Case: Old WineryYou have inherited the “Old Winery” from your grandfather, a winery which has been family owned for five generations and can be dated back to the 16th century.
Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in the conventional way, i.e. they are not organically farmed and certified. The vine stocks are in a good condition regarding age and care. Overall, only ¼ of the harvest is made into wine by the winery itself; the rest is sold.
Your grandfather never wanted to change the image of the winery and left the managerial and administrative task to a young and energetic wine-maker. Due to the not so well-known brand , the demand for the “Old Winery” wine is currently rather low.
You do not intent to run the winery operatively, given your limited knowledge of wine making, but find the idea of owning a winery exciting. Your plan is to give the winery some fresh impetus.
You have inherited the “Old Winery” from your grandfather, a winery which has been family owned for five generations and can be dated back to the 16th century.
Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in the conventional way, i.e. ... Open whole case
Roland Berger Case: OnlinestarOnlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special business) in Eastern Europe. The company sells its goods via Amazon and ebay, and recently via an online shop on its website. Despite this development, the financial ratios have deteriorated in recent years. In particular, gross profit margin decreased significantly. Combined with a significant increase in shipping costs, this led to a negative result for the first time in the recently ended fiscal year and a resulting strained financial situation. Against the background of expected stagnating sales for the current financial year, short-term action is required.
The board of Onlinestar asks you for an analysis of the reasons for the negative result as well as a derived recommendation for action. As a consultant, you should bring in your knowledge in online trading and develop solutions. In addition, the management board would like to receive a sales and gross profit plan from you for the current financial year.
Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special b ... Open whole case
NutripremiumNutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany.
Nutripremium has two main lines of products:
Vitamin-supplements for pregnant women
Concentrated dehydrated aliments and vitamin pills for sick patients (with Diabetes or Cancer).
The CEO of Nutripremium thinks that the market in Europe is starting to get saturated and wants you to analyze the Chinese market.
What are the key areas you would explore to determine whether this is a good idea?
Nutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany.
Nutripremium has two main lines of products:
Vitamin-su ... Open whole case
Children vaccineBeyer, one of the biggest pharmaceutical companies in the world, just invented a very reliable vaccine against Chickenpox, a disease that affects children in the age from 2 to 16 years.
Beyer came to you wondering what their potential sales in Europe in the first year would be if they launched this product next year. They are only interested in the overall sales revenue as they already know that the vaccine can be sold for a profit. This is more meant to show them how big the volume they have to supply is and what the revenue would be.
Beyer, one of the biggest pharmaceutical companies in the world, just invented a very reliable vaccine against Chickenpox, a disease that affects children in the age from 2 to 16 years.
Beyer came to you wondering what their potential sales in Europe in the first year would be if they launched this ... Open whole case
