Is market size defined as current consumption or is it defined as the entire universe of potential consumption? For example, was the market size (in $) of cheeseburgers in 2020 the total dollar value of cheeseburger consumption last year, or was it the dollar value of all possible/potential cheeseburgers that could have been consumed last year (regardless of actual consumption)? Thanks.
Is market size current consumption or entire universe of potential consumption?
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I struggle to understand the difference - especially I don't fully understand what "all possible/potential cheeseburgers that could have been consumed last year" means. Two hypotheses:
- If you mean Cheeseburgers that were sold, but not consumed, then this is included in the market size
- If you mean the total number of Cheeseburgers that could have been produced based on kitchen capacity, cattle farm capacity or whatever, but were not produced, because no one wanted to eat that many Cheeseburgers, than they will certainly not be in the market size. That would be the global production capacity.
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Hi there,
Market sizing is normally related to actual consumption.
If they want to ask for what you referred as potential consumption (that is, maximum production capacity), they will explicitly mention it in the request.
In any case, you can clarify it at the beginning if you have doubts.
Best,
Francesco
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Hi there,
It is most absolutely the former, i.e. total cheesburgers consumed.
I'm not really sure what "all possible/potential" cheeseburgers really means...as in if everyone in the world ate cheeseburgers for breakfast, lunch, and dinner every day? Think about how this sounds!
Remember what the point is of market sizing: to quickly figure out if this is an attractive market. As such, we clearly want the realistic measurement :)
(edited)
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Hello!
Don´t worry, since if you find a case with a market sizing, they will be very very precise. And if not, you can ask precisely that as a clarifying question.
Cheers,
Clara
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Hi there,
Your question is indeed kind of overly detailed... When you read any market sizing question, you know what is expected from you.
Anyway, yes, it is about the current consumption.
Cheers, GB
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