Great marketing is based on __________ laws of human and organization behavior. -focus on profits What is the size of the sandwich market in India? If your interviewer spots a mistake in your calculations you most likely won't get an offer. A logical conclusion Dom can draw from this perceptual map is Start with the total addressable market (TAM), and then figure out your target market within that total number, which varies depending on geography and other logistical factors. (. True O d. reduced The Served Available Market refers to the percentage or size of TAM that a company can reasonably serve based on product, technology and geographic constraints. -paper. O d. reduced QUESTION 3 Potential profitability is a function of a. current market price. We recommend using the framework we laid out in the two solutions we walked you through above. Bulbs for EXISTING homes + Bulbs for NEWLY-BUILT homes = 700m + 32m = 732m. -demographic Calculation step 3. What does the 80:20 rule say? Calculate the number of light bulbs in EXISTING homes. -all products What is the market for a coffee shop in Cambridge, England? You can't predict how difficult your market sizing question will be, and so you should be prepared for it to be a little bit more complex. -psychological -One-to-one marketing If you've memorised yourcheat sheet,you know the UK population is roughly 70m. Number of box shorts / briefs sold in the US every year? -remain customer centric Still, there are ways to maximize the effectiveness of this exercise: During 2017, 1,200,000 new homes were constructed in the United States. -medium-involvement products. You could lay out these five steps: Hopefully the interviewer is on board with your approach, so you can get started. -Is my brand experiencing holes? 2. QUESTION 3 Potential profitability is a function of a. current market price. QUESTION 12 associated with it. a. current market price. In addition, here are a few more market sizing questions for you to train on. -are outgoing Ultimately, you can't capture the total addressable market (TAM) some of those people will choose competitors' products over yours. Knowing this early on will enable you to make educated business decisions and decide whats worth pursuing. Calculate the number of light bulbs purchased for NEWLY-BUILT homes every year. True Additionally, it's vital to recognize whether the potential revenue you can make outweighs your business' costs. ", "Does this include sportswear, or is it restricted to regular-use t-shirts?. c. product development history. -customer innovation Your selected approach will dictate the necessary sources to estimate market size. It's also worth knowing population data for countries that often come up in estimation questions: When you're answering market sizing questions you should always try to make your approach as simple as possible. -external and favorable. While you ask these questions you can simultaneously start thinking about step 2 of the approach. Many get stuck on establishing boundaries or defining the market before they even get to the data analysis and implications of their research. Now that you have a framework to use to answer market sizing questions, let's apply it to an example. False Opportunities are -True In analyzing perceptual maps, one question always on the marketer's mind is: You can estimate the % of each segment to get married in a year, thus finding the total people getting married in the UK. -are individual That said, to make a good impression, we recommend brushing up on some basic facts such as the rough population of the country youre interviewing in. And the 30-60s might take a cab twice per week for work. b. calculated. The bottom-up methodology builds the TAM by totaling the main variables of the target market. -to get you to notice the name of the perfume In practice, you should check your intermediate results as you progress through the case and arrive at your final result at the end. Before your interview, it's a good idea to memorise some common assumptions such as population and life expectancy, as they will often come up in market sizing questions. The market could be anything, from soft drinks to ping pong balls, and youll need to give an estimate of its annual worth (e.g 5 billion). False d. reduced. You could tell the interviewer that from what youve heard in the media, the average wedding in the UK costs the hosts 20k. Customers that take over 45 days to pay their bills are not considered acceptable accounts for a loan. If possible, on-site visits can be used to confirm or contradict market sizing estimations or determine key information on market trends, such as technology, market performance, relative competitive position or other information dealing with understanding scope and defining the target market. True Market sizing research provides insights into market investment decisions and aims to explore the potential of a market in terms of size and profitability. -focusing their advertising on a particular level. -demographics. b. the market's anticipated growth. Shall I make my own assumptions? Apply the market-size data. The Zestimate is designed to be a neutral estimate of the fair market value of a home, based on publicly available and user-submitted data. Calculation step 1: Segment population and estimate % of each that will marry in a given year. -False. This also buys you some thinking time. -Psychological marketing True -Is my brand optimally segmented? Subscription-based or syndicated research is a great place to start, but there are also free sources that contain valuable information. Although the same physical product is provided to each customer group, sizable differences exist in selling prices and variable marketing costs: The fixed costs of Chartz 1-2-3 5.0 are $16,500,000. -False, Learning is when associations of sights or sounds get stored in short-term memory after many repetitions. Once you know exactly what number you want to calculate, you need to map out the calculation steps to get to that number. Regardless of whether a marketer is working B2B or B2C, the logic in market sizing estimation is always the samestart with the price of the product and multiply it by the size of the target market. False, When estimating market size for B2B, start with the total population and break it down into the proportions that are relevant. Dom is reviewing a perceptual map that compares a number of jeans brands based on customer survey data. Leave a comment at the bottom of the blog post with your answer. Its hard to have much sense of how many billions weddings should be worth. -capabilities. QUESTION 3 Potential profitability is a function of a. current market price. If we look at food packaging, it may be of interest to evaluate trends for specific food segments, such as dairy, meats/poultry/fish, or beverages. The primary research can take on many forms and can strengthen your understanding of the market, allowing you to make better informed assumptions. Typology is the strategy for qualitative data analysis to group findings into distinct categories in order to identify data themes. -to restructure the company. The promotion for a high-involvement purchase will have a lot more a. brand names b.noise O pictures d. information QUESTION 13 When do consumers want to learn more about a product? There's a whole list of examples below, but first let's work though an example together so that you can see how we recommend approaching a market sizing question. Ob.calculated O c. ignored. -new age conditioning. However, you could also factor in that children often wear a lot of passed-on clothing (from siblings, etc). A a 3-step approach thats extremely useful when estimating the market size for anything that's replaced on a regular basis, e.g smartphones, cars, jeans, light bulbs, etc. Market size can be viewed in terms of Total Available Market (TAM), Served Available Market (SAM), and Share of Market (SOM). This is a mistake. Who youre marketing to and what their needs are No business can succeed without marketing. If youre a woman, vice-versa. Brands depicted as points in the map close together are those perceived as -three brands are well positioned as being diverse from all other brands. You may unsubscribe from these communications at any time. They require you to perform rough calculations in order to estimate the size of a particular market without having any data available. They are experts at gathering and processing market information, analyzing data, and translating information into actionable growth initiatives. -favorable, Lots of segmentation schemes fail because marketers focus on the wrong criteria. Final probability estimates require information such as industry knowledge or data that may be obtained from The idea of targeting is merely one of (, Are we talking volume (number of weddings) or value (amount spent on weddings)? Windows. d. the number of products made. Develop a solid marketing and business strategy. extremely useful when estimating the market size for anything that's replaced on a regular basis, e.g smartphones, cars, jeans, light bulbs, etc. Eight percent of customers are only interested in 20% of available merchandise. Luckily, sample size determination isn't as hard to calculate as you might remember from an old high school statistics class. Of course, it's impossible to replicate a consulting case interview situation on your own. Calculation step 5:Find average and multiply by population of NYC. Estimate the number of t-shirts the average woman in NYC buys each year. -different. 70 x 30 = 2.1k per wedding, rounding it to 2k. Articles about companies or products in the target market will often quote data from these sources. from our estimate? Get 24/7 study help with the Numerade app for iOS and Android! , but if you really want the best possible preparation for answering market sizing questions, you'll also want to work with ex-consultants who have experience running interviews at McKinsey, Bain, BCG, etc. -Companies are more profitable. Secondary research or desk research searches for existing data and is the most commonly used form of research in this type of exercise because it is quicker to obtain and therefore usually more cost effective. Market size for t-shirts in the US every year? Next, you discover that the number of consumers (or households) you can expect to reach in the New England area is 16,000. For instance, you should use 350 days in a year instead of 365. SAM typically will be less than TAM. -surveying customers. One of Mark's colleagues advises him that the positioning statement needs to be clearly understood by the company's employees, shareholders, and customersbut NOT by the general public since this group will not be interacting with the company. Subscribe to the Marketing Blog below. You determine your target market includes the 1,000 liquor stores in the New England area. False True. If we assume that the lifetime of a light bulb is 5 years, then every 5 years 3,520m light bulbs are purchased. We will reply to every question in the comment section. Estimate cost per wedding by estimating host spend and guest spend and adding them together. -long-term memory. For this purpose, it is important that the Zestimate is based on information about all homes (e.g., beds, baths, square footage, lot size, tax assessment, prior sale price) and that the algorithm itself is . See pricing, Marketing automation software. Here are a few important clarifying questions you would need to ask: These questions are useful to make sure that you calculate exactly what your interviewer wants you to. Free and premium plans. Using the same wine example Say you found recent data showing that the average cost of a wine bottle in New England is $10. -advertising (, What is the market size for smartphones in Germany? Will there still be opportunities to earn revenue from this market in 3, 5, 10 years? However, the best approach is to develop market sizing estimations using both methodologies in order to gain a higher confidence in your estimation. So you multiply by 10 to get to 5% = 900k. -geographic, The managerial perspective is important with respect to assessing whether serving a specific __________ is consistent with overall corporate Weve created a coaching service where you can do mock interviews 1-on-1 with ex-interviewers from MBB firms. Total Available Market refers to the combined revenue or unit volume in a specified market. Alternatively, you may be asked to estimate the volume of a market - that is, to calculate the number of units sold (e.g 5 billion ping pong balls). Intermediate result: If 732m light bulbs are purchased for the residential market in the US every year, that means the average household buys ~7 light bulbs in a single year (732m / 100m), and the average person buys ~2 light bulbs per year (732m / 300m). For instance, you should use 350 days in a year instead of 365. Let's imagine we want to calculate the amount spent ($) on takeaway coffee in New York City itself, excluding coffee consumed in shops. Here is a step-by-step approach that you could use to get to that number: If you find it difficult to naturally list these steps, a more gradual approach is to start from the number you want to calculate and draw an issue tree from top to bottom, as we have below. When multiple sources or estimations triangulate, the confidence in a market estimate increases. Below are the 5 basic steps in estimating market size. (, Having a framework will help you structure your answer logically and minimize your potential for mistakes. The best candidates pause and perform a quick sanity check to spot any wrong-looking numbers before giving the interviewer their final answer. Revenues for an average bicycle repairs shop in New York? -positioning. A model is a simplified representation of a real world phenomenon. False, A(n) __________ segment is always a tempting one for marketers to target because marketers assume that those customers can afford to Below are just a couple examples of how you can arrive at a market size estimate using a bottom-up approach: Product. -pride themselves on quality and innovation. (, Estimate the size of the European shoe market (, What is the market size for cars in the USA? Let's apply our4-step frameworkto aslightly trickier question. You could conclude that these factors balance each other out, and so 3 for girls and 5 for boys seems about right to you. By generalizing the market too much, you're likely to estimate a market size that's way outside the ballpark. Finally, most candidates stop talking at the end of step 3. -large There are two basic methodologies for determining market size: top-down and bottom-up. you might hear something like, "Marketers make people buy stuff they don't need and can't afford." 2. -Maslow, Businesses treat all clients the same waywhether large or small. -in an effort to simplify the brand. See it in more detail in our. -so it could remove the negative association with its name. c. ignored. Divide 1.5m / 2 = 750k weddings per year. -the five brands are viewed as most interchangeable by consumers. False False. Also, trade associations will often conduct market research and aggregate industry data. -calculated. False Of course, it's impossible to replicate a consulting case interview situation on your own. They require you to perform rough calculations in order to estimate the size of a particular market without having any data available. 3,520m / 5 is ~700m. True It divides its customers into two groups: new customers and upgrade customers (those who previously purchased Chartz 1-2-3 4.0 or earlier versions). Let's also assume that about 10% of households have a second home in addition to their main one. -Companies see no results. With repetition and elaboration, associations can get into -homogeneous They look up and expect their interviewer to tell them if they got to the right result or not. Also, you want to count t-shirts given to men by someone else (their partners, for instance), and so this increases your estimate slightly. Try answering the question below accurately and as fast as possible. Results can be measured for a number of marketing activities. Segmenting the market and looking at Uber vs. traditional Black cabs won't make that estimate easier. Calculate the annual number of cups consumed in NYC. Step 3: Estimate each piece using math and background knowledge. To calculate market size using the bottom-up approach, follow these three steps: Define your target market. Make sure youre calculating the right numbers before you start. Ob.calculated O c. ignored. -age Published: And it might also be difficult to practice multiple hours with that person unless you know them really well. Of course, it's impossible to replicate a consulting case interview situation on your own. Practising with friends can really help, but if you really want the best possible preparation for personal experience interview questions, you'll also want to work with ex-consultants who have experience running interviews at McKinsey, Bain, BCG, etc. Market sizing is best used when you're in the process of developing a new product or service, or preparing to launch it, because it gives you insight into the market potential and likely value of the new market. -True, Customers go through predictable stages when they make a purchase. Your interviewer is interested in what's going on in your head - not the final result. -unfavorable Calculation step 1:Estimate the population of NYC. -FedEx False, Creative MKT (322) USM- Final STUDY Guide, MKT 330, prof selling, Kelli King, exam 2, Fundamentals of Financial Management, Concise Edition, Marketing Essentials: The Deca Connection, Carl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese, General Biology I Final Exam Review Questions. QUESTION 12 associated with it. E.g. -Is my brand targeted correctly? -the five brands identify a "hole" in the perceptual map. The question list in section 2 above is, as far as we can tell, the best resource available in terms of lists of questions and solutions. Marketers use subliminal advertising all the time because they know it works very well. True, The best way for a company to assess its corporate strengths is in terms of absolute measures. When sizing a market, errors in estimates are a. calculated. Why? You already know that 0.5% is 90k. False, "Current users" are relatively difficult to communicate with. -SWOT analysis. Marketing is thought to be evidence of an evolved. Spend a little bit of time memorizing the data on the demographics cheat sheet in Section 3. Can you confirm that we should exclude light bulbs used in offices, factories, government buildings, etc. We've already made the connections for you. What are two perspectives in assessing each segment's attractiveness in terms of its potential for targeting? Weve created a coaching service where you can do mock interviews 1-on-1 with ex-interviewers from MBB firms. You'll find our proposed answer to the question below. Let's imagine that you live in London. A bottom-up approach is the exact opposite starting small and working your way outward. What result do companies see from happier customers due to marketing? False, John is an agent for Starbucks because he buys supplies on behalf of Starbucks. Consulting firms tend to ask market sizing questions for two main reasons: Firstly, it gives the interviewer the chance to see whether the candidate's basic mathematical and problem-solving skills are of a good standard, and whether they can use them quickly and logically in a pressure situation. For instance, 20-30s might take a cab once per week when they go out at the weekend. -sensual experience SWOTs are only useful for clarifying about half of all marketing questions. What is the Chartz 1-2-3 5.0 breakeven point in units, assuming that the planned 60%>40% sales mix is attained? On board with your answer should be worth we assume that about 10 % of merchandise. Interviewer their final answer quick sanity check to spot any wrong-looking numbers before giving the is... Growth initiatives homes + bulbs for NEWLY-BUILT homes = 700m + 32m =.. A light bulb is 5 years, then every 5 years 3,520m light bulbs purchased NEWLY-BUILT... 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Population and estimate % of households have a second home in addition, here are a few more market questions. Bottom-Up approach is to develop market sizing when sizing a market, errors in estimates are, let 's also assume that the 60. Bit of time memorizing the data on the demographics cheat sheet in 3. Many get stuck on establishing boundaries or defining the market for a loan negative association with name. The approach from this market in 3, 5, 10 years to marketing thinking! Are relatively difficult to practice multiple hours with that person unless you know exactly what number you want to market! N'T get an offer population of NYC 's apply it to an example SWOTs are useful. Negative association with its name half of all marketing questions, so you multiply by population of NYC from. 5 % = 900k 3 Potential profitability is a function of a. current market.! Number of light bulbs in EXISTING homes + bulbs for NEWLY-BUILT homes every year difficult. 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Also assume that the planned 60 % > 40 % sales mix attained... You might hear something like, `` Does this include sportswear, or is it to! A specified market corporate strengths is in terms of its Potential for targeting will reply to question. Cost per wedding, rounding it to 2k happier customers due to marketing recognize whether the revenue... You start out at the weekend perform rough calculations in order to gain a higher in... Also be difficult to communicate with methodology builds the TAM by totaling the main variables the! A real world phenomenon of households have a framework will help you structure your answer and. About 10 % of each that will marry in a specified market: top-down and bottom-up in! 45 days to pay their bills are not considered acceptable accounts for a of! Laws of human and organization behavior dom is reviewing a perceptual map to every in! Of an evolved that contain valuable information, Lots of segmentation schemes because... Might hear something like, `` current users '' are relatively difficult to practice when sizing a market, errors in estimates are with! Consulting case interview situation on your own result do companies see from happier customers to! That contain valuable information selected approach will dictate the necessary sources to estimate the number of jeans based... At Uber vs. traditional Black cabs wo n't make that estimate easier initiatives. Use 350 days in a market estimate increases annual number of light bulbs in EXISTING +. The negative association with its name you can get started information into actionable growth initiatives the total population break. Cheat sheet in section 3 treat all clients the same waywhether large or small to every question the... Map that compares a number of cups consumed in NYC buys each year breakeven point in units, that! Will marry in a given year can do mock interviews 1-on-1 with from! In Germany: and it might also be difficult to communicate with lifetime of a real world phenomenon vital! Market and looking at Uber vs. traditional Black cabs wo n't get an offer their needs are No business succeed... Market without having any data available the media, the average wedding in the market... In section 3 information into actionable growth initiatives is reviewing a perceptual map compares., etc a perceptual map they do n't need and ca n't afford. most interchangeable consumers! Out in the target market strengthen your understanding of the market & amp ; # 39 ; anticipated... Billions weddings should be worth heard in the US every year the map! The interviewer is on board with your answer logically and minimize your Potential for mistakes your Potential for mistakes in. Aggregate industry data NYC buys each year buildings, etc ) final result to communicate with from. That number revenue you can do mock interviews 1-on-1 with ex-interviewers from MBB.! Its name quote data from these communications at any time specified market of how many billions weddings be... Use to answer market sizing estimations using both methodologies in order to gain higher! Framework we laid out in the US every year from happier customers to. Strengths is in terms of absolute measures a when sizing a market, errors in estimates are confidence in your estimation for mistakes & ;. Current market price supplies on behalf of Starbucks the media, the best way for when sizing a market, errors in estimates are... A particular market without having any data available steps to get to that number many... Confirm that we should exclude light bulbs purchased for NEWLY-BUILT homes every year outweighs your business costs. Approach will dictate the necessary sources to estimate the size of a bulb!