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Market sizing: # of white men's t-shirts sold in a year

Guesstimate Market sizing
New answer on Dec 31, 2021
5 Answers
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Viktoria asked on Mar 01, 2020

Hello,

I need some help on how to break down the following issue:

"How many white men's t-shirts does Zara sell every year?"

Thanks in advance!

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Luca
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Content Creator
replied on Mar 02, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello Viktoria!

I would approach the problem as following:

  • Estimate number of t-shirt per man
  • Estimate percentage of white t-shirt
  • Estimate the "expected life" of a shirt from Zara
  • Number of white t-shirt sold per year= # men * # t-shirt per man * % white t-shirt / Expected life
  • Estimate the market share of Zara
  • # white tshirt sold by zara = Mkt share * # white t-shirt sold per year

Feel free to text me if you want to discuss it further,

Luca

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Ian
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replied on Dec 31, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi there,

Providing some market sizing thinking for anyone revisiting this Q&A:

Remember that there's rarely a "best" answer with market sizing. What's important is that you break down the problem the way it makes sense to you. Importantly, break it down so that the assumptions you make are the ones you're most comfortable in.

For example, do you know all the major brands? Great go with that. Do you understand all the segments of that country's population (either age or wealth or job breakdown)? Go with that. Do you know the total market size of the tourism (or hotel) industry? Then break it down that way.

Some tips:

  1. Just like in a case, make sure you understand the question - what are you really being asked to calculate
  2. Decide whether a top-down or bottom-up approach is best
  3. Figure out what you know you know, and what you know you don't know, but could estimate
    1. This helps you determine how to split out buckets
  4. Stay flexible - you can start with a "high-level" market sizing, but gauge your interviewers reaction....if it looks like they want you to do more...then go along level deeper in terms of your splits
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Gaurav replied on May 16, 2021

I am limiting to US for now

Assuming 350M US Pop

Half men 180M round to 200M

Now out of these there are 4 segments

Gen Z, Millenials, Gen X and Boomers (all 4 are approx the same size)

So 50M in each.

Now

Gen Z might buy 1 white tshirt per month (generally teens dont prefer that) so 12

Millenials (who might use it as under shirt) would buy a 5 pack every quarter so 20

Gen Z (similar as Millenials) so 20

Baby Boomers might buy 1 per month so 12

12 X 50M X 2 + 20 X 50M X 2 = 1.2 B + 2 B = 3.2 Billion

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Anonymous replied on Jun 29, 2020

Hi,

I would suggest that you should present your own approach and I would be happy to review.

Meanwhile please see below my approach to segmentation in market sizing as well as examples of solved cases:

B2C:
-Demographics (Age, education, income, family size, race, gender, occupation, nationality)
-Behavioral (Purchasing behavior, customer journey stage, occasion & timing,
customer loyalty & interest, risk tolerance, user status)
-Psychographic (Lifestyle, personality traits, values, opinions, interests of consumers)
-Geographic (Geographical boundaries)

B2B:
-Company characteristics (Industry, company size, number of employees)
-Geography (Geographical boundaries)
-Purchasing Approach (Occasion & timing, customer capabilities, nature of existing relationship)
-Personal Characteristics (Loyalty, risk attitude, user status)

B2G:
-Demographics (Type of agency, size of budget, the amount of autonomy)
-Geographic (Geographical boundaries)
-Government Tier (Federal , State, Local, Quasi-governmental, International)
-Bid type (Closed, Open)

But sometimes you don’t need to segmentation. Here is an example of case that could be solved with high level top down approach - estimate the size of credit card market in the US:

https://www.preplounge.com/en/consulting-forum/how-should-i-approach-the-following-question-estimate-the-market-size-of-credit-cards-in-the-us-6695

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Clara
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Content Creator
replied on Mar 02, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

First of all, I believe you are missing a location (e.g., Zara in Spain, for instance).

For this, I believe the easiest would be to:

  1. Calculate male popultation of target market
  2. Calculate number of white shirts bought by a man per year (here, you need to go from, for instance, 1 new shirt every 2 years = 0.5 new shirts a year)
  3. Estimate how many of those are white
  4. Estimate the % of those that come from Zara

Hope it helps!

Cheers,

Clara

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Luca gave the best answer

Luca

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