Hi, should I base myself on individuals or households while calculating the market size (number of orders) of online food delivery platforms?
Online Food Delivery Platforms
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I'd suggest thinking through whether consumption patterns differ substantially between HHs and individuals. This seems likely.
One could argue an individual will order both on a standalone basis and in a group (HH) and so the smallest unit to model would be per individual.
Then you could always segment this into different segments of individuals e.g.
1 - young, solo living
2 - couple
3 - young family
4 - older couple
Within each of these segments you can then assume order frequency and also taking into account # individuals / HH
Hope that makes sense
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Hello!
I would always recommend you to give it a shot and then post it here, this would help you the most.
This is a very typical market sizing case, where the key steps are:
- Calculate the total population
- Calculate the % of population that could be interested in this product (this could be done by clustering -the classical ones are age groups, purchaching power, etc.-)
- Calculate the % of the total adressable market that any firm in particular could have -in case it´s asked only-.
Hope it helps!
Cheers,
Clara
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Why not both? You can split your market in single household orders and family orders?
However, you should also assume a different consumption behavior. if you're assuming that the family just orders a multiple of the single household based on the average number of familty members you can just do it on an individual level.
I'd assume a family orders less per head than a single household, because they cook more often and more healthy food.
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Consider both..individuals will order more frequently per week, households order less frequently but their average order value with be higher per order.
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Either works - just be clear about the assumptions on order value and frequency for each.
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Depends only on how you want to structure it and how you reason it - the choice is yours.
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Hi there,
Either, or both, could work! The most important is that your assumptions are reasonable and that you understand where you/your household fits in terms of segmentation!
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