I approach market sizing questions with the frameworks discussed in Case in Point by Marc Cosentino. For market sizing questions your answer should be based on logic and assumptions. Analyze the question and throw it into 3 categories: population based, household, or proposterous.
I have seen a lot of population and household cases so far and this is how I approach them:
You need to memorize SOME things about your country: population, life expectancy, how many people in a household (change number slightly so it devides out nicely into population).
Remember this golden rule - it is better to be good enough than to be precise. In market sizing questions you need to make A LOT of assumptions and you need to round numbers and percentages. You need to think about presenting this information to a client - how would I be able to present this information to someone in a very simple way.
EXAMPLE CASE: How many dining room chairs where bought in the United States (where I am from) this year?
- identify what kind of question it is: population based
- think about the information you will need to solve this problem: Population of the US: 320million, Average HH size: 3.2 (nice number to devide into 320million), 320/3.2 = 100million HHs
- Assumptions - this is where a lot of people get uncomfortable with market sizing questions because you need to make educated guesses. Educated guesses for market sizing questions need to be justifiable to some extent, but it can be more losely coorelated than one of a different type of case (THE INTERVIEWER DOESN'T CARE ABOUT THE ANSWER AS LONG AS THERE IS A GOOD PROCESS THAT CAN BE DUPLICATED): the assumptions that I am going to make in this case are as follows
- I will assume that the average household has 4 chairs based off the 3.2 people per HH.. = 400million chairs
- I will assume that the average life of a dining room chair is 10 years - based on the fact that none of my dining room chairs have needed to be replaced in 15 years, but I assume that is on the higher end of the spectrum - 400million/10years = 40million chairs
- Since it is August I will take 40million*(8/12 or 3/4) = 30million
- Answer - I estimate that 30million chairs have been purchased in the US this year.
Hope this helps! Feel free to schedule a practice case with me - I am a beginner at cases but I am putting a ton of time into them.