Hello, i came across a market sizing question, and i am not sure how to solve it. The question was: How many blood pressure lowering tablets are sold every year in the USA.
I would be very happy about any suggestions.
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Market Sizing: How would you approach this case?
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Hi there,
You'll learn a lot more from this by trying it out yourself first! Why don't you post your approach here and we can provide commentary?
Market Sizing Analysis: Approaches, Techniques, and Exercises
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How to approach market sizing
It's very simple: Do the approach the is the easiest for you given the question.
Are they asking you to estimate something where you don't even know where to begin from the top (maybe you have 0 clue as to the market size of the industry, the GDP of that country, etc. etc.)? Then do bottom-up!
Alternatively, does it seem impossible to do a realistic from-the-ground-up estimation of something (perhaps it requires just far too many steps and assumptions)? Then do top-down!
Fundamentally, you need to take the approach that just makes the most sense in that circumstance. Quickly think about the key assumptions / numbers required and whether you 1) Know them or 2) Can reasonably estimate them. If you can, go ahead!
An Example
He's a Q&A for a great market sizing question here asking to estimate # of electric charging stations in a city in 10 years:
This one could be answered top-down (as I did) by estimating population of the city, # of drivers/ cars, etc. etc.
OR, it could be answered bottom-up by estimating # of stations you see per block (or # of gas/petrol tanks), % increase this might be over time (or # of EV stations that would be needed per gas tank given EV stations take 10 times as long), and # of blocks you'd estimate the city to have.
Take a look here for additional practice! https://www.preplounge.com/en/management-consulting-cases/brain-teaser/intermediate/taxis-in-manhattan-market-sizing-229
(edited)
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As Ian said it is much more helpful to have a version of an answer first before asking for help on here.
As a general thought -
- First identify the number of people that are likely to have high BP issues
- Then account for the number that have this issue diagnosed
- Then the number that have a severe enough issue to require treatment using tablets
- And lastly the number of those that take the tablets
If you follow the above funnel you should get to a reasonable answer to the question.
Best,
Udayan
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Hello!
I know market sizing, at the beginning, are super frustrating. you never know where to start! However, I would always recommend you to give it a shot and then post it here, this would help you the most.
Given that market sizing cases were the topic of many questions in this Forum, I developed a market sizing case, that you can find for free in PrepL´s library
Let me know if you have any doubts with it, it contains a detailed explanation and methodology about how to solve this specific example, but you can extrapolate to many other market sizings!
Hope it helps!
Cheers,
Clara
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First let's look at the formula, then the assumptions.
Formula:
This is a matter of considering:
(1) Population in the segment [age]
(2) % with that blood pressure issues
(3) how many take medication
(4) how much medication do they need
(5) how many pills in each tablet.
Market size in volume = (1) * (2) * (3) * (4) / (5)
Assumptions:
(1) Since blood pressure is usually an aging desease, you can use age to segment the overall population into groups with different consumption levels. So divide population between age groups (e.g. <40 ; 40-60 ; >60 => 50%, 25% and 25% of total population), and assume a certain
(2) Assign different disease frequency levels per age group (e.g. 2% ; 10%; 20%)
(3) Assume a fixed % (e.g. 50% or 80%). Some people can control this through lifestyle changes. Some simple refuse or can't afford the medication.
(4) A pill per day = 360 / year
(5) Pills per tablet = 12 (for convience when doind calculation, because it means 30 tablets per person per year)
Let me know what you think!
(edited)
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