Expert with best answer


3 Meetings

7 Q&A Upvotes

USD 109 / Coaching

Market sizing for raincoats

Alan asked on Jul 18, 2019 - 1 answer

How would you estimate the market size (dollars) for raincoat in a particular city?

1 answer

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
replied on Jul 18, 2019
Bain and company | INSEAD | Got all Big 3 offers | More than 250 real MBB cases
Book a coaching with Ashwin

3 Meetings

7 Q&A Upvotes

USD 109 / Coaching

Let's try to estimate this for the city of London

I start with formulating the approach in the form of an equation

Step 1: Raincoat market size ($) = City population(#) * (% of pop. that feels the need for a raincoat) * (Avg number of raincoats owned) *(1/Life of a raincoat in years) * (Avg. price of raincoat in $)

Step 2: Input my assumptions

London city population - ~10M
% of pop. that feels the need for a raincoat - Since London has high rainfall, I will assume a large % of the population would buy raincoats (~80%)
Avg number of raincoats owned - I would assume ~2 considering high rainfall in London
Life of raincoat - ~4 years
Avg. price of a raincoat - ~$50

Step 3 - Calculate using my assumptions
Market size ($) = $200M

Step 4 - Do a sanity check
Dividing $200M by the population of London (10M) gives $20 which means each person in London spends on average $20/year on raincoat purchase. This does not seem far fetched.

Conclude - Considering my assumptions, the market size for raincoats in the city of London should be in the vicinity of ~$200M

How come you divide by the "life of a raincoat in years"? I would assume the shorter the lifetime of a coat the more they need to be sold, therefore larger market size. — Anonymous A on Jul 19, 2019 (edited)

As you say "shorter the lifetime of a coat more they need to be sold" - for this to happen you should be dividing the lifetime of coat — Ashwin on Jul 19, 2019

Related BootCamp article(s)

Market Sizing

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

1 Q&A

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)

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 40.4k times
4.4 5 1052
| 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 25.4k times
4.3 5 549
| 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

TKMC Case: Elevators

Solved 12.6k times
4.2 5 1147
| Rating: (4.2 / 5.0)

Your customer is the market leader in the North American elevator service business. This is divided into the areas of elevator construction, elevator modernization and service. The customer has a particularly strong branch network in medium-sized cities and would now like to expand its business in ... Open whole case

Our client Pharma Finance just finalized its first investment round and received $ 40m to invest in the build-up of a pharmaceutical manufacturing company. The CEO is mainly interested in high margins and profitable markets, with a sustainable and green production. This is why he wants you to find o ... Open whole case