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Antonello

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2

Is there a basic rationale behind sizing products that are widely used in commercial scenario?

For example, when estimating the number of capsule coffee machine, it's probably widely used in office buildings rather than households. How should I approach the segment?

For example, when estimating the number of capsule coffee machine, it's probably widely used in office buildings rather than households. How should I approach the segment?

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Hi,
identify different segments in a market sizing is great and often needed. In your example, you can divide the problem into 2 different parts or simply state that at work there will be x% of the total capsules.

Here you can find other examples of:
- commercial products vs household: https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
- 2 different use of a product: https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087#a11020

Best,
Antonello

Hi,
identify different segments in a market sizing is great and often needed. In your example, you can divide the problem into 2 different parts or simply state that at work there will be x% of the total capsules.

Here you can find other examples of:
- commercial products vs household: https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
- 2 different use of a product: https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087#a11020

Best,
Antonello

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Hi,

I recommend the following:

  1. Ask the clarifying question first: Are we looking only at the b2c segment or other segments as well. Mentioning this by itself will give you the extra points. In many interviews, the interviewer will allow you to neglect
  2. Make a B2B branch in your analysis. But start analyzing with B2C first since it's easier.
  3. There are many tricks on how to make a B2B calculation approximation depending on the industry. Here are some of them:
  • Personal experience (e.g. when I look on the street, every 10th vehicle is commercial. Thus there are (B2C / 10) commercial vehicles. Now you can calculate commercial gas stations, Tires, etc.)
  • Calculating the space. For example, if you need to calculate the commercial real estate, you can 1) calculate how many buildings you have in the city (using the estimation of what % of the land is occupied by them), 2) subtract the apartment buildings 3) multiply by the number of floors and space.
  • Calculating the number of businesses: (Working population - % working in public sector) / (SB, Medium, Enterprise split * avg number of employees in each). For each size of the business, you can calculate whatever you want, even light bulbs used.

To give you an example:

Once in the interview, I was Calculating the B2C tire market assuming that the new cars already have tires (sold via B2B channel). E.g. if the avg. lifetime of a car is 10 years, the replacement rate is 1/2 and the replacement rate per car is 4/10, since the first 2 years are covered by the tires from the b2b market.

Calculating b2b market included calculating the tires for the new cars (B2C market of the new cars * (4 tires + 1 extra)) + commercial vehicles * (avg number of tires per commercial vehicle).

Best

Hi,

I recommend the following:

  1. Ask the clarifying question first: Are we looking only at the b2c segment or other segments as well. Mentioning this by itself will give you the extra points. In many interviews, the interviewer will allow you to neglect
  2. Make a B2B branch in your analysis. But start analyzing with B2C first since it's easier.
  3. There are many tricks on how to make a B2B calculation approximation depending on the industry. Here are some of them:
  • Personal experience (e.g. when I look on the street, every 10th vehicle is commercial. Thus there are (B2C / 10) commercial vehicles. Now you can calculate commercial gas stations, Tires, etc.)
  • Calculating the space. For example, if you need to calculate the commercial real estate, you can 1) calculate how many buildings you have in the city (using the estimation of what % of the land is occupied by them), 2) subtract the apartment buildings 3) multiply by the number of floors and space.
  • Calculating the number of businesses: (Working population - % working in public sector) / (SB, Medium, Enterprise split * avg number of employees in each). For each size of the business, you can calculate whatever you want, even light bulbs used.

To give you an example:

Once in the interview, I was Calculating the B2C tire market assuming that the new cars already have tires (sold via B2B channel). E.g. if the avg. lifetime of a car is 10 years, the replacement rate is 1/2 and the replacement rate per car is 4/10, since the first 2 years are covered by the tires from the b2b market.

Calculating b2b market included calculating the tires for the new cars (B2C market of the new cars * (4 tires + 1 extra)) + commercial vehicles * (avg number of tires per commercial vehicle).

Best

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