US breakfast market sizing. The best way to avoid segmenting the population vs considering a general participation rate.

Market sizing
New answer on Feb 05, 2020
3 Answers
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Anonymous A asked on Jan 30, 2020

I am trying to solve this market sizing exercise: What is the size of the US breakfast market?

My approach is to consider the total population in the US and consider a percentage of the population that has breakfast. In this case if we assume the US population is 300 M and the proportion of people who have breakfast is 40%, then the 120 M in the US who have breakfast. However, if I were to consider the US population by age groups, especially that younger people (0-20 year olds) are more likely to have breakfast compared to older aged people, my calculation becomes messy. How do I solve the problem with the latter approach without making it confusing.

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Luca
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replied on Feb 05, 2020
BCG |NASA |20+ interviews with 100% success rate| 120+ students coached |GMAT expert 780/800 score

Hello,

I would do as following:

  1. Segmentation of population by age
  2. Estimation of % of people that have breakfast at bar during a week and the frequency
  3. Estimation of expenditure for a breakfast in a bar
  4. Estimation of expenditure for a breakfast at home

Adding all of these contributions you can have a good estimation of the market.

Feel free to text me if you want to discuss it further in details.

Best,
Luca

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Udayan
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updated an answer on Feb 02, 2020
Top rated McKinsey coach with many offers /Ex McKinsey EM in New York /6 years McKinsey recruiting experience/Real cases

Not sure what you mean by US breakfast market. Is there a product you are looking at such as breakfast cereals? Or is this more for eating out?

The assumptions you take into account will differ vastly based on the specific market you are targeting. For example, looking at breakfast cereals, I would look at age groups as children are more likely than people older than working adults to consume breakfast cereals.

In order to make it less messy stick to 2 or maybe 3 groups at most and then do the math separately for them. The more MECE groups you create, the more messy the calculations become

Best,

Udayan

(edited)

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Vlad
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updated an answer on Jan 30, 2020
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

The criterion here is - where do you have this question?

  • If it is a standalone market sizing case - you have to go with multiple segmentations
  • If it is the part of the bigger case, you can use 80/20, capacity / utilization and other approaches to speed up your calculations

Best

(edited)

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