China book publisher

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Information that can be shared on the interviewee’s inquiry: 

• Target market are young kinds ranging from 10-15 years of age.
• Focus lies on high-end segment of that target market due to book's pricing.
• Total population of target market is 140 m kids.
• We have three target segments.
• We expect a conversion rate of 5% who will purchase the book.

Interviewee should outline his approach to calculate market size and then ask for the data. Interviewee should not start assuming the data, but specifically ask for it.

The interviewee should ask for the following information:

• Which target market is the client after?
• How many segments are we dealing with and what is the proper breakdown?
• What is the expected conversion rate that will purchase the book for each target segment?

Interviewee should use the profit framework to calculate market size, revenue, cost and profit. Additionally, interviewee can use the customer branch of the Business framework to determine data needs on customer segments and conversion rates.

Information that can be shared on the interviewee’s inquiry: 

• The book will be sold through hardcopy & digital format.
• Hardcopy will be priced at CNY180 and digital copy at CNY150.
• We expect a 50% equal split in sales between both options.
• Cost per unit is CNY25 for physical copy and CNY19 for digital copy.

Interviewee should now calculate profit by outlining that profit=revenue-cost.

Information that can be shared on the interviewee’s inquiry: 

• Target is CNY75 m.

Interviewee should ask for client's profit target to determine final decision.

Profit of CNY100.1 m > target of CNY75 m, so client should go ahead & invest.