I'd like to hear your thoughts on how to answer to market sizing in limited geographies, such as in this 7-Eleven Case I was given.
I performed so and so, therefore I decided to restructure my answer, and I want to hear your point of view.
Question (simplified): what's the market sizing (number of customers) of a new 7-Eleven in an urban neighborhood of 100K residents? Assume no tourists, no non-resident workers. 7-Eleven does not typically have capacity issues.
My answer (revised)
I can think of four ways:
- I can estimate the market share: starting from the potential market, I can estimate a market share based on the number/positioning of similar shops
- If we don't have such information, I can base my estimate starting from product/service, by: a) Estimating the potential market and the penetration rate for our cafeteria services (product area 1) b) Estimating the potential market and the penetration rate for our small shop services (product area 2) c) Considering the intersection between a and b
- If those estimates seem too blurred, I can base my estimate starting from customers, by assuming a penetration rate for different customer segments (divided by e.g. age, income, proximity, etc.) I can also mix approaches 3 and 4, by basing my product-centered analysis on different customer segments
- If none of these approaches are doable, I can estimate the number of hourly/daily customers based on my experience in similar shops
Is this approach good? Would you add/remove/modify something?
I have tried to tailor it to the case.