Cookie and Privacy Settings

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).

Manage settings individually I accept
expert
Expert with best answer

Udayan

98% Recommendation Rate

94 Meetings

2,729 Q&A Upvotes

USD 209 / Coaching

2

Level of detail required in market sizing questions

Hi There,

Does anyone have a more insightful/detailed/rigourous way to address the market size for the UK cake market, beyond my proposed approach below:

Total Rev = segmented by age demographics as most likely to influence purchasing decisions:

Total Rev = Rev[0-20 years] + Rev[20-40years + Rev[40-60years] + Rev[60+years]

Where Rev(i) = [No. people] x [% eating cake] x [% of those eating who actively buy cake] x [mean no. cakes bought per week] x [no weeks/year when cake is bought] x [mean price per cake]

Perform the above calculation for each age group with appropriate assumptions on above numbers and total.

Is there a more detailed/insightful/rigourous way to approach this (or is the above sufficient detail) - e.g. I could think of revenue segmentations by products within the cake market (e.g. large 'event' cakes + cake slices (e.g. in coffee shops)) or revenue segmentations per day of week (i.e. cake bought on weekend versus weekday etc.), or does this just add unneccessary complications?

And more generally across all market sizings of this type - how detailed should the approach be in terms of revenue segmentation, or is a typical segmentation per age demographic usually sufficient?

Thanks in advance for any inputs!!

Hi There,

Does anyone have a more insightful/detailed/rigourous way to address the market size for the UK cake market, beyond my proposed approach below:

Total Rev = segmented by age demographics as most likely to influence purchasing decisions:

Total Rev = Rev[0-20 years] + Rev[20-40years + Rev[40-60years] + Rev[60+years]

Where Rev(i) = [No. people] x [% eating cake] x [% of those eating who actively buy cake] x [mean no. cakes bought per week] x [no weeks/year when cake is bought] x [mean price per cake]

Perform the above calculation for each age group with appropriate assumptions on above numbers and total.

Is there a more detailed/insightful/rigourous way to approach this (or is the above sufficient detail) - e.g. I could think of revenue segmentations by products within the cake market (e.g. large 'event' cakes + cake slices (e.g. in coffee shops)) or revenue segmentations per day of week (i.e. cake bought on weekend versus weekday etc.), or does this just add unneccessary complications?

And more generally across all market sizings of this type - how detailed should the approach be in terms of revenue segmentation, or is a typical segmentation per age demographic usually sufficient?

Thanks in advance for any inputs!!

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Udayan

98% Recommendation Rate

94 Meetings

2,729 Q&A Upvotes

USD 209 / Coaching

Hi,

Your approach sounds well thought out and would suffice. If youreally wanted a different appproach you could for example do it by occassions. As opposed to people that eat cake you could say occassions that would call for cake eating - birthdays, corporate functions, weddings etc. and estimate those per year (population for birthdays, x% of people between 20 and 40 getting married every year for weddings etc.). You can then supplement this with an additional assumption for those that eat cake outside of occassions.

A better way perhaps is to account for these occassions is to keep your approach and to increase the number of people that might have cake in a year based on these occassions. (e.g., each person has lets say 20 occassions a year that includes celebrations of all kinds that could involve cake eating - then take a % of those that will eat cake in those occassions etc.)

Hi,

Your approach sounds well thought out and would suffice. If youreally wanted a different appproach you could for example do it by occassions. As opposed to people that eat cake you could say occassions that would call for cake eating - birthdays, corporate functions, weddings etc. and estimate those per year (population for birthdays, x% of people between 20 and 40 getting married every year for weddings etc.). You can then supplement this with an additional assumption for those that eat cake outside of occassions.

A better way perhaps is to account for these occassions is to keep your approach and to increase the number of people that might have cake in a year based on these occassions. (e.g., each person has lets say 20 occassions a year that includes celebrations of all kinds that could involve cake eating - then take a % of those that will eat cake in those occassions etc.)

Thanks for the feedback, and just to clarify, for all similar top down market sizings of this type, is a general revenue segmentation via age demographics usually sufficient? — Anonymous A on Oct 04, 2019

In most cases yes. The easiest way to tell is to see what the interviewer is trying to get you to do. It's also good to check in with them once you've outlined the approach and take any hints they might give you — Udayan on Oct 04, 2019

Book a coaching with Vlad

97% Recommendation Rate

404 Meetings

11,348 Q&A Upvotes

USD 239 / Coaching

Hi,

The level of detail really depends on wether its a standalone MS case or a part of the bigger case:

  • In a standalone case you can have 2-3 segmentations per case with detailed calculations
  • If MS is a part of the bigger case, it's better to use not more than one segmentation (e.g. age groups) andsimplify everything else (e.g. using 80 / 20 rule, or capacity and occupancy / utilization istead of long segmentations)

Best

Hi,

The level of detail really depends on wether its a standalone MS case or a part of the bigger case:

  • In a standalone case you can have 2-3 segmentations per case with detailed calculations
  • If MS is a part of the bigger case, it's better to use not more than one segmentation (e.g. age groups) andsimplify everything else (e.g. using 80 / 20 rule, or capacity and occupancy / utilization istead of long segmentations)

Best

Related BootCamp article(s)

Market Sizing

Market Sizing Questions are used to test your quantitative & reasoning skills. Learn more on how interviewers evaluate your given answer!

2 Q&As

Important Facts

It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.

1 Q&A

Related case(s)

Oliver Wyman case: Full Electrons Ahead

Solved 97.3k times
Oliver Wyman case: Full Electrons Ahead 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 them on how to adjust the product offering.
4.6 5 6431
| Rating: (4.6 / 5.0)

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 Winery

Solved 66.1k times
Bain Case: Old Winery 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. 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.
4.4 5 1786
| Rating: (4.4 / 5.0)

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: Onlinestar

Solved 46.3k times
Roland Berger Case: Onlinestar 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 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.
4.3 5 988
| Rating: (4.3 / 5.0)

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

Nutripremium

Solved 68.6k times
Nutripremium 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-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?
4.5 5 2197
| Rating: (4.5 / 5.0) |

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 vaccine

Solved 60.8k times
Children vaccine 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 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.
4.4 5 2181
| Rating: (4.4 / 5.0) |

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