Market Sizing Doubt

Javier asked on Oct 09, 2018

Hi, I would value anyone's point of view about this market sizing question. Just so you do not get shocked on how useless I am, I have no Case Interview experience whatsoever;) I work at an international bank within the M&A division, and never got asked these when going through recruiting (luckily for me)

So the other day I was asked, during an interview with a Fintech, to calculate the number of coins that are thrown each year to the Trevi Fountain (in Rome).

So I think the easiest way possible (it seems my answer was far from being right since I was rejected;))---> number of annual tourist x coins per tourist + number of romans x coins per roman

I segmented the number of tourists by season (assuming summer brings more tourists) and made up the numbers for each season.

To calculate the number of thrown coins per tourist/roman I divided between high income, medium income and low income, assuming tourists had a higher proportion of high income people.

Again, I completely made up the number of coins per each income segment.

The outcome of the interview, even though my interviewer told me the reasoning was ok, was me being rejected...

I don't really care that much about that specific interview since that company didn't attracted me so much, but I realle need to know how you guys would have solved that question if given the chance.

As I said, any comment, point of view, help would be more than appreciated, really.

Thank you in advance,

Javier

The other day I was asked during an int

3 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Kay replied on Oct 09, 2018
Preparing for McKinsey interviews.

Hi Javier!

I do see where your reasoning comes from - personally I would've segmented the coin-throwers differently. The segmentation of tourist and Roman makes sense, as the two categories would certainly impact the number of coins thrown in per year. However I'm not sure income would necessarily impact the number of coins thrown - actually, it may even be the opposite correlation from what you expect, as lower income people tend to be more superstitious.

I guess the key here would be identifying a broader market size and narrowing down with relevant. You could even make an educated guess that realistically only tourists will significantly impact the number of coins tossed into the fountain.

E.g. Annual visitors to Rome*proportion visiting Fountain Trevi*proportion throwing coins into fountain*average number of coins per throw

I would say your approach perhaps missed a few steps e.g. do all tourists in Rome visit the fountain? Does every tourist toss a coin in? Do locals actually toss coins in?

The key to market sizing is a balance of real-world sense and sound logical reasoning. Although I can follow your steps, I don't think the segments you produced were the best ones to use.

I hope that helps!

Kay

Benjamin replied on Oct 10, 2018
ex-Manager - Natural and challenging teacher - Taylor case solving, no framework
Book a coaching with Benjamin

100% Recommendation Rate

50 Meetings

466 Q&A Upvotes

USD 319 / Coaching

Hi,
I would proceed a bit differently, skipping the sgementation per income and introducting the tourist group size and coin / group instread (assuming in a family for instance, not everyone is throwing a coin..?)

# tourists visiting / Average tourist group size X average amount thrown for a group

Keep in mind that there is no unique solution for market sizing so yours would be valuable as well, and you might have been rejected for other reasons than the market sizing inself, unless it was more a behavioural concern during the sizing.

BEst
Benjamin

You obviously don't have kids :-) If you throw a coin, MOST DEFINITELY your children will want to throw one as well. And you're asking for drama if oyu only let one kid throw a coin, but the others not... :-D — Elias on Oct 13, 2018 (edited)

Javier replied on Nov 13, 2018

Hi, sorry for the delay!! I read your answers weeks ago and found them really insightful and helpful but have had some issues logging through my office's computer. It surprises me how everyone in this website is so nice and keen to help. Again, thank you both, Kay and Benjamin Best regards!!!

Related BootCamp article(s)

Important Facts

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

Market Sizing

Market Sizing Cases are used to test your quantitative and reasoning skills. The interviewer evaluates your structure, numbers-handling and business sense.

Related case(s)

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 28.7k times
4.4 5 777
| 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 17.3k times
4.3 5 369
| 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 48.1k times
4.5 5 1496
| 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-supp ... Open whole case

Children vaccine

Solved 43.5k times
4.4 5 1444
| 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