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Mixed reality product market for dentists

Bain & Company BCG digital marketing Digital McKinsey market tech
New answer on Jan 09, 2024
4 Answers
176 Views
Anonymous A asked on Jan 08, 2024

How to assess the market entry size in revenues for an augmented reality product for dentists in a country in Europe? Thanks 

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Gero
Expert
replied on Jan 08, 2024
Ex-BCG │200+ Interviews & Interview Coachings @ BCG │ 20+ candidates coached into MBB │WHU/LSE/Nova │ Teacher & Trainer

Hi there,

I agree that some additional context would be useful here, e.g. the type of augmented reality product.

In general, a potential approach to calculate the long term revenue potential per annum would be:

1. Find the number of products needed

  • Number of dentists in the country
  • Share of dentists that are potential clients
  • Number of augmented reality products per dentist

2. Multiply with the replacement rate of the product (e.g. replaced every 10 years) to get annual products sold (in the long run)

3. Multiply with product price to get the revenue potential per annum

In this thread, you can find a step-by-step estimation approach: https://www.preplounge.com/en/consulting-forum/got-this-market-sizing-question-at-mbb-interview-and-was-thrown-off-17461

Good luck with your future sizing cases!

Best, Gero
 

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Ian
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updated an answer on Jan 09, 2024
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

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?

HINT: First, how many dentists are there? Then, how many would use it? Then, what would the price be?

Here's some additional practice with answers:

https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/intermediate/market-sizing-with-solution-coffee-shop-revenue-318

https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/intermediate/market-sizing-with-solution-coffee-shop-revenue-318

https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/beginner/market-sizing-with-solution-number-of-taxis-317

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:

https://www.preplounge.com/en/consulting-forum/how-would-you-solve-this-market-sizing-question-from-roland-berger-7631

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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Cristian
Expert
Content Creator
replied on Jan 08, 2024
#1 rated MBB & McKinsey Coach

Hi!

I believe the question needs to be detailed a bit more for us to understand its scope. 

For instance, are you referring to the initial market size (considering that the product is an innovation) or what specifically? 

Also, feel free to drop a suggested answer and then we can comment on it. You're likely to get more useful feedback this way.

All the best,
Cristian

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Florian
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Content Creator
replied on Jan 09, 2024
Highest-rated McKinsey coach (ratings, offers, sessions) | 500+ offers | Author of The 1% & Consulting Career Secrets

Hi there,

This is a market sizing example that would rely heavily on assumptions, hence the important element that is evaluated here is to come up with and defend your assumptions well.

The actual calculation approach is relatively simple:

1. Number of dentist offices per 1m population

2. % of those dentists that are willing to use this device

3. Number of devices per dentist that wants to use it

This will give you the number of devices to sell

4. Market share we get

This will give you the number of devices we can sell

5. Price per device

This will give you your current entry market size potential 

Cheers,

Florian

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Gero gave the best answer

Gero

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