Market-sizing corrected: the global chewing gum market

Market-sizing questions are a classic interview in consulting firms. They rarely represent the core of the interview and are, most often, an integral part of business case studies inspired by situations really experienced with the firm's clients. They represent an opportunity to shine. for all trained candidates because their resolution method, once understood, makes it possible to project certain qualities that are highly sought after by recruiters: spirit analytics, substructure, oddity and humility in particular.

We wrote this example for you on the global chewing gum market in order to help you see more clearly what the perfect dialogue between you and the interviewer should be. Let's go!

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Start of the example
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Candidate :”As I understand it, we need to estimate the size of the global chewing gum market. If that's okay with you, I'd like to ask you a few clarifying questions before offering you my approach.“

Interviewer:”Yes, of course, go ahead. What do you want to know?“
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Candidate :”Are we talking about the market in volume or in value? Of all types of chewing gum or any type in particular?”

Interviewer:”These are good questions. We talk about the market in value and take into account all types of chewing gum“

Candidate: “I would also like to assume that the French market represents 5% of the global chewing gum market. Is that right for you?“

Interviewer:”It's a good reflex. Let's keep 4%“.

Candidate: “Ok, perfect. I'm going to take a few moments and get back to you with an approach.”
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(...)
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Candidate:”I think I'm going From the population French that I am going to divide into age groups and assume a Average% of chewing gum consumers by age group. I am also going to hypothesize about the frequency average consumption of chewing gum per day and by age group. This will allow me to get an average number of chewing gum consumed per age group per day. I'm also going to assume that a pack of chewing gum contains about ten chewing gums in order to get one NNumber of packs purchased per year. And apply a Average price. Is this approach right for you?“

Interviewer:”This approach is fine with me. Go for it.”
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Candidate:”Do we have numerical information on the various elements of my approach, whether it is the average frequency of consumption, the number of chewing gums consumed per day or other? If we don't have that information, I'm going to make some assumptions if that's okay with you.”

Interviewer: “No numerical information to provide you. You can actually hypothesize.”
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Candidate :”Let's start from a French population of 64 million inhabitants, equally distributed (“equidistributed”) in 4 age groups:

1. Under 20
2. 21-40 years
3. 41 - 60 years
4. 61 years and over

There are 16 million people in each age group. From my personal experience, I'm going to assume that people under 20 are the ones who consume the most chewing gum and that those over 60 don't.
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So I'm assuming the following average penetration rates:

1. Under 20: 70%
2. 21-40 years: 50%
3. 41-60 years: 20%
4. 61 years and over : 0%
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In terms of frequency of consumption, I think that people under 20 can consume chewing gum alone or with their friends, at any time of the day. As for the other groups, I think this happens at specific times, such as after a meal, before an appointment or after smoking a cigarette. Mostly during working days. If that's okay with you, I'm going to assume the following frequencies:
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1. Under 20: 3 chewing gums per day
2. 21-40 years: 1 chewing gum per day (5 days per week)
3. 41-60 years: 1 chewing gum per day (5 days per week)
4. 61 years and over: 0%
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In terms of packs, if we keep our hypothesis of 10 chewing gums per pack, we get:

1. Under 20: 2 packs per week
2. 21-40 years: 1 half pack per week
3. 41-60 years: 1 half pack per week
4. 61 years and over: 0
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Interviewer:”These hypotheses are fine with me. So what is the size of our market?”
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Candidate : “I will calculate step by step if it suits you. In terms of the number of individuals concerned, we have

1. Under 20: 70% *16M = 11.2 million
2. 21-40 years: 50% *16M = 8 million
3. 41-60 years: 20% *16M = 3.2 million
4. 61 years and over : 0

So a total of 11+8+3+0.2*2 = 22.4 million French consumers of chewing gum.
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Then, if we start from our number of packs per week, we get

1. Under 20: 2 packs per week*11.2 million consumers = 22.4 million packs per week
2. 21-40 years: 1 half pack per week*8 million consumers = 4 million packs per week
3. 41-60 years: 1 half pack per week*8 million consumers = 4 million packs per week‍
4. 61 years and over: 0
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That is a total of 22.4+4+4 = 30.4 million packs purchased per week in France.
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That is 30.4*52 = 30.4*10*5+30,4*2 = 304*5+60.8 = 300*5+4*5+60.8 = 1500+20+60.8 = 1,500+20+60.8 = 1,580.8 million packages purchased per year in France.
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If that's okay with you, I'll round this result up to 1.6 billion packs purchased annually in France.

Interviewer:”Yes, it's ok for me.”
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Candidate : “Thank you. One could calculate with different prices per type of chewing gum. To go faster, I'm going to assume an average price of 50 euro cents per pack. Is that okay with you?”

Interviewer:”Yes, let's not waste too much time on this. Ok for me.”
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Candidate : “Alright, so we get 1.6*0.5 = 800 million euros which is the size of the annual market in France.

Starting from the assumption that this market represents 4% of the world market, we obtain a market of 20 billion euros.

Interviewer:”Great, do you have any questions?”

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End of the example
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Remember that numbers are not the most important. Here, it is above all necessary to demonstrate that you are able to be logical, to propose a structured approach and to pose intelligent hypotheses to determine a result. Your composure and your ability to perform the calculations without panicking, quickly and vocalizing them will also be greatly appreciated.