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How would you estimate the market size for vegan shampoos in the UK?
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Hi, in addition to the solutions proposed by the other coaches in the discussion, I would like to suggest similar cases in the platform to practice with:
- https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
- https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
- https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
- https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692
Hope it helps,
Antonello
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This would be a subset of
- Vegans (~3-5%) - can include 80% of folks here as being vegan is an identity
- People that care about clean beauty products - you can estimate it based on something rational...any number around 10-20% would be reasonable in my opinion
- Subset of people that care enough about animal rights to switch shampoos - (first calculate those that care about animal rights and then a small percentage of them that would shift)
With those numbers you can easily estimate it using standard population metrics.
Best,
Udayan
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- Population of country
- Split by income/wealth level (poor, middle, upper class)
- Estimate frequency of shampoo purchase by group per year (of course, moderately directly correlated with socioeconomic status...benchmark off of your annualy usage)
- Estimate % of each group that would use vegan shampoos (also strongly correlated with socioeconomic status)
- Price per bottle - based off what you see (if you only know "normal" shampoo, obviously this product is a premium product, so increase the price by x %)
- Multiply 2x3x4x5
And voila!
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Hi!
Many great answers already around how to think about this. I would structure it around the use cases:
- Ethical - vegans who will switch to the shampoo for moral reasons
- Cosmetic - people who will switch to the shampoo as they are highly conscious of cosmetic products they use and ingredients
- Medical - people who HAVE to switch as vegan shampoos are the only ones suitable e.g. skin conditions like eczema
If I was the interviewer asking this question, I would like to see if you could identity unconventional markets like number 3 above with a bit of lateral thinking.
The general approach around estimating population, % of population for each, willingness to pay etc. would work as per all other market sizing questions.
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I would probably go for a simple approach:
- Number of vegan hairwashes
- Total Population (UK, ~60m)
- Vegans (~2%)
- Non-Vegans using vegan products for their reasons (~5%)
- Frequency of hairwashes (say 4x/week across the board)
- Number of portions per bottle (say 20)
- Price per bottle (5GBP, around double the normal price)
That would get you to 60m x 7% x 4 x 50 = 840,000,000 vegan hairwashes with 42m bottles at 5GBP, i.e a market size of ~200mGBP/anno.
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I agree with what Udayan has proposed. IMO, you need to take into consideration all three options.
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Hello!
I think the easiest is to calculate the % of vegans -since I don´t think that many more people other than them would buy the shampoos-.
However, this market sizing does not seem as the classical one you would find in a case - it´s too straight-forward.
Hope it helps!
Cheers,
Clara
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