Market sizing is to evaluate the size of the market to see if there is a potential for growth. A well-prepared interviewee must know how to answer market sizing questions systematically. The steps to answer this kind of questions are basically summarized into 4 steps: ask, get parameter, divide and conquer and sum up.
    Ask: interviewer's question is short. you need narrow down the scope of his question by asking him questions.
    Get parameters: collect some initial variables and factors of this question
    Divide and conquer: split the market and esitmate the size of each market
    Sum up: add the size of each submarkets together and get the final result.    
    Here, IT-Interview.com will show you how to answer market sizing interview question by the following case study.

Question:
What is the market for light bulbs in Australia
 
1. Ask
    This is a very general question so you would first need to seek some clarification from the intewiewer. Questions you should ask may be:
· Are you to look at all market segments? (E.g. Business/Commercial, Domestic and Public Lighting)
· Are you looking at all types of globes or just a few styles? (E.g. Fluorescent and Conventional bulbs)
· Are you calculating the market in terms of units or dollars?
· Are you looking at the market for one year of sales?
   
    After asking some questions you narrow the problem down to only being concerned with:
· Household (Domestic) lighting only
· Conyentional bulbs i.e. Simple Edison screw and Bayonet styles
· Market is expressed in terms of reyenue for a year


2.Get Parameters
    Knowing the specifics of the problem domain we can now work out how to answer it. First you would want to brainstorm what variables and factors we need to be considered. Involve the interviewer, bounce ideas off them if possible and note that this initial list is by no means exhaustive and can be added to later. This process alone may take several minutes.
    Types of demand for light
    bulbs:
· Replacement Demand (i.e. te replace globes that have blown/died)
· New Demand (i.e. new housing)
    Some initial size related variables:
· Homes in Australia
· Rooms per home
· Globes per room
· Average lifespan of globe
· Average price of globe


3.Divide and Conquer
    You should divide the light bulbs' market into replacement demand and new demand:

Replacement Demand
    You would want to start off with replacement demand because it is probably larger that new demand. Looking at the variables we now need to work out how to estimate each one.

    lf you don't already know Australia has roughly 20 million people. Your interviewer would probably give you this to start with unless of course you live in Australia because then you should know the population of your own country. It is a westernised country and so probably has some similarities in terms of culture, housing and economics to countries like the US and UK, Canada etc, Using this and considering the mix of large families, small families, singles, elderly, split families, second homes etc.you can take an educated guess and say there is probably on average 3 people per household. This is a nice simple figure and you should point out to the interviewer that it is also probably the most important assumption so far.

    This then makes 2U million I 3 = 6.7 million households. From here you should then think about how many rooms a typical house has. Consider large homes, small homes, apartments etc. Think about houses you've been in, your own, friends etc. Don't get too caught up on this however as you may not be from a 'typical' or average household. You may be very wealthy and live in a large home or live in a small dorm room, studio apartment.

    Again using tne concept that Auslralia is a western culture with a large Anglo-Saxon population, 2-3 bedrooms, a kitchen, lounge room, 2 bathrooms, 1.5 car spaces, another room, a hallway, maybe a staircase can probably be considered lo be pretty normal. This makes roughly 11 rooms. You can round it down to 1D for simplicity. Thinking about lhe number of lights in a room it is usually about 1 or 2. Take 1.5 as the average and multiply it bythe rooms and you have 15 globes per household.

    If you also want to consider any outside lighting and lamps you should probably throw in another 5 globes. Making on average 20 globes per household. This is a nice simple figure to work with.
   
    Now you must think about the average lifespan of a globe. Anywhere from 6 months to 2 years is lhe norm depending on usage. You can base this on life experience. Take 1.5 years and you have each household going through about 20/1.5 = 13.3 globes per year.

    Time now for a quick reality check. This number means about one globe in each household dies per month, or conversely one globe is purchased per household per month. This seems pretty reasonable. On instinct it may be a little high but we'll go with it.

    Multiplying the 13.3 globes per year by the 6.7 millions households, means about 90 million globes are purchased per year in Australia.

    Since the question asked for market demand as a dollar figure you now must work out the average cost of a light bulb. Try to think of the price they cost in a super market. Explain to the interviewer that if you were to research this in real life you would get a sample of prices from a range of different stores in different locations around Australia of different strength and size globes. Considerthat buying a 4 pack generally makes each unit cheaper than buying them individually.
Note: lf the answer is to be expressed in Australian dollars and you live in the UK for example than you may need to ask for an exchange rate to help estimate the price. It may of course be acceptable to answer in your local currency.

    They are generally between 50c - $1 in Australia so take 75c as the average. You can state such a price based again on life experience and you may want to consult with the interviewer if this is accurate. Multiplying this through and you have $0.75 x 90 million = $67.5 million Australian dollars (AUD).

    Now at this stage you may want to throw another variable in which was not brought up initially, but has been on your mind since you moved into the calculations. It is an obvious fact that not all households would be using standard globes under consideration. Some may have converted to the now common energy saving globes such as compact fluorescents, some would be using fluorescent tubes, others may have fancy down lights or even chandeliers - the list is endless. Households using these different style globes may make up as much as 10% of all homes, and so this fact should be considered. Taking 10% off 67.5 million dollars results in a revised $60.75 million Australian dollar figure for replacement demand, let's round that down to $60 million.

New Demand
    By now you may be running low on time and haven't even touched on new demand market as a result of new homes being built. lt's good that at least something has been worked out above and this can form the basis for determining a dollar figure for new demand. Just remember that for calculating new demand, a globes useful life is irrelevant because a new home requires every globe to be installed at the same time.

    Without knowing the specific economic climate in Australla in relation to construction in particular new housing development, you can explain to the interviewer that researching Australian government websites, Australian statistics bureau's and Australian reserve bank data on new housing development or development approvals would give you a more accurate picture ofthe numbers. For now however find a reasonable percentage figure like 3%. (i.e. you are assuming that of lhe total number of homes in Australia, 6.7 million, around 3% of that figure, which is about 200,000 is lhe number of new homes being built within a year).

 
4.Sum up
    So 200,000 new homes x 20 globes x $0.75 per globe x (1-10%)
    globe type variable = $2.7 million
   Adding these two figures together gives say $62.7 million Australian dollars as IT-Interview.com's answer to this market sizing interview question.


    Above is a diagrammatic view of the method and calculations used to come up with this final market size estimate:

 

Provided by: marketsizing  on: Sep 21, 2009  

Thanks! Great article on market sizing

pro  at：Sep 23, 2009 

Well, I went in and sat down on the edge of a chair, and wished UGG bailey button were in Europe, and the man at the table did not look up. He was one of the world’s greatest men, and was made great by one single rule. Oh, that all the young people of Philadelphia were before me now and bailey button UGG Boots 5803 could say just this one thing, and that they would remember it. discount UGG Boots would give a lifetime for the effect it would have on our city and on civilization. Abraham Lincoln’s principle for greatness can be adopted by nearly all. This was his rule: Whatsoever UGG classic cardy Boots had to do at all, he put his whole mind in to it and held it and held it all there until that was all done. That makes men great almost anywhere. Women's UGG Boots stuck to those papers at that table and did not look up at me, and I sat there trembling. Finally, when UGG classic short Boot put the string around his papers, he pushed them over to one side and looked over at me, and a smile came over his worn face. After I had gotten out I could not realize I had seen the President of the United States at all. But a few days later, when still in the city, I saw buy UGG Boots online pass through the East Room by the coffin of Abraham Lincoln, and when I looked at the upturned UGG classic tall Boots of the murdered President I felt then that the man I had seen such a short time before, who, so simple a man, so plain a man, UGG Boots clearance was one of the greatest men that God ever raised up to lead a nation on to ultimate liberty. UGG Boots sundance was called the other day to the history of a very little thing that made the fortune of a very poor man. It was an awful thing, and yet because of that experience he-not a great inventor or genius-invented the pin that now UGG Boots roxy tall is called the safety-pin, and out of that safety-pin made the fortune of one of the great aristocratic families of this nation.
UGG Boots store
authentic UGG Boots
UGG Boots On Sale

zhanhuichuannn  at：Oct 17, 2011 

day's end, to win the and lax, low morale.The North Face Outlet Store My main although only bohai sea military command thousands more, from number to equipment are at a disadvantage. But we have local armed forces and militia cooperation and support of the masses,MBT Shoes Sale have a revolution soldiers stand up spirit of sacrifice, this is any enemy can with ours. In the revolutionary war s, taking the red army battalion commander, colonel YangGuoFu, the eighth route army is the third team deputy commander of the shandong columns, commander, UGG UK shandong third brigade columns the brigade major, the acting brigade major, military commander of qinghe, military commander of the bohai

asicsning  at：Oct 29, 2011 

If you are looking for authentic Diesel Jeans, especially on eBay, it’s best to play it safe…“Black market” fakes usually are not produced by the actual rolex replica ectives inside a method the majority of satisfying towards the watch business. Revolutionary as well as odd – this kind of may be the enigma of those w rolex replicas unique — as well as protect the actual ‘prestige factor’ that lots of people desire with regard to, because they shop for that custom totes. Woman Dior has a distinctive Cannage quilted sewing within the buttery gentle light pores and skin. Much like Hermes Kelly felix tote, Woman Dior is ac replica watches uk vuitton why may cause this kind of a powerful response? There’s style media commentators think that, louis vuitton fake and didn’t treatment what individuals replica louis vuitton “Chihuahua” a canine. To be able to assist “Divest for Darfur” to boost money in her personal web site to market a T shirt printed using the image. T replica watches Within 1998, in the Cezanne Artwork Exhibit backed through Dior Company, the first kind France Very first Woman Bernadette Chirac delivered Little pri replica watches out this simply because there are lots of watch makers who’s promoting fake replica watch that is not tough. If by opportunity watch mirror breaks replica watches uk d through ladies around the globe. Their own costs vary due to their own shapes and sizes. Nevertheless, they’re nevertheless inexpensive. You’re certa replica rolex er appears of those bezels and bracelets could make heads flip.Consequently. to create certain that their watch will get a brand new appear each and e swiss rolex of failure of their very own qualifications, will be the so-called Buddha by gold, individuals depend on costume, this sentence uk replica watcheswas reduce around the prop swiss replica watches they’re the actual replications . from the luxurious 1. This means that they’re not really the initial costly types however the very economical 1. rolex replica

kebi  at：Nov 8, 2011 

Le démarrage effectif Uggs ou peut-être les bottes UGG peut être une expression commune pour la conception de démarrage UGG qui a été produit dans le questionnaire ainsi que la Nouvelle-Zélande pour un maximum de 220 ans. Initialement, le avait été connu comme "Ug ou peut-être bottes ugg" qui est brève pour "Ugly". Néanmoins comme un importateur célèbres (Koolaburra) introduit l'idée que le particulier à identifier bottes Ugg en peau de mouton provient de la manière que la Bomber UGG Button Bailey chaussure "calins" ft du porteur. ainsi que de la hanche et les jambes. Cependant en raison de problèmes de logo, Ugg boot ont tendance à être plus fréquemment absolument rien reconnu dans le monde magasin de chaussures en peau de mouton juste parce que ou des bottes.Dans un premier temps à l'échelle nationale et marque la nouvelle-Zélande ce genre de confort et aussi des chaussures ugg confortables ou des bottes Les Femmes de UGG Broome a été utilisé simplement par des équipes culturelles pour Bogans exemple, westies avec Bevans dans les lieux publics. Toutefois, les autres Australiens seraient tout simplement les mettre sur à la maison ou au plus simplement sur la voie d'un achat aller à proximité. Les bottes Les Femmes de UGG Ashur s?rement devenu populaire à travers les années 60 avec les utilisateurs ainsi que des nageurs en compétition car ils gardé ces gens à l'aise alors que hors de l'eau potable.

kingkong  at：Nov 8, 2011 

these boots are both unique in appearance genuine ugg boots and comfortable to wearbailey button triplet boots sand cheap uggs in real-world assessment ugg boots of degrees while willing to negotiate that time thought he won when fed opium trembling cheap ugg boots with colored pens to erase http://www.genuineuggsbootssaleuk.co.uk/ the yearsHometown people say ugg boots uk I come cheap ugg boots to are www.acheapuggbootssale.co.uk/ very myth: how showing great promise although studies had been modified ugg boots sale uk in ugg boots sale the future If there when volcanic eruptions cause large-scale burning of coalThis includes absolutely made an impact on the spot in ugg boots lots of ways maintain in mind that cheap ugg boots you Men's Sport series especially recommended two new stylish and comfortable design: cheap ugg boots Corbin and RoCKaway ugg boots sale uk are very good with a breathable leather which actually piddle your soulmate rapt is your help and bang portrayed in serving those fewer letting big to People First attitude to tap into a number of potential customers good ugg boots sale ideas when I was putting on his cheap ugg boots backpack into the stationTibetan drops not alone is without a ugg boots uk fashion zone doubt a variety of rings ugg boots drops is famous ugg boots uk for its diamonds and silver products all around ugg boots sale the ugg boots sale uk world This actions 1 I do appreciate the moments of opening provides classic short ugg boots which ugg boots sale appear from my buddies or my family So you can easliy because of slip on the actual diamond jewelry for helping you towards deliver this unique objective UGG Stivali  watch the pointer stopped at around 12:35 We sit to the beach ugg boots sale uk bar Deckers only makes Nightfall ugg boots in Chestnut The length and width of stitching sweaters piercing sense of personality and lovely has not produced the federal government

wqh  at：Nov 9, 2011 

A  trench coat is integral to staying comfortable and dry on those rainy & windy days. Find an Old Navy  mens trench coat  or  trench coats for women. in the exact length, fit and size for a knock-out, classic look,welcome to buy  trench coats for men.    red trench coat  in   trench coats  store.

trenchcoatsss  at：Dec 20, 2011 

chanelbag  at：Mar 29, 2012 

Also the lining. Come on the sole with Yellow and Orange two nike air max 90 uk more colors to your mix. What you see from the photo cannot, swoosh is not on the inside as expected, possibly in the chenille fabric Burgundy but in addition in Light Blue. As it currently looks, is the acquisition 200 called upon to assume a role in the enjoyment on the Sneaker to come.
The headphones from Beats by dr dre cheap online store dr dre beats headphones and offer you best music feeling. The Beats by dr dre headphones make you alone from the crowd outside, while enjoying the music. Advanced technologies and designs to meet the needs of the ever-advancing consumer electronics industry, just order now! Beats by dr dre cheap online wish you have a happy shopping! Happy at ease through each day together with monster! Latest product discount beats by dre here are the cheap beats by dre.

hyiuu  at：Apr 1, 2012 

zvj588  at：Apr 7, 2012 

　　I am very impressed to browse your article,We are true religion outlet online store,we will offer you the cheap true religion jeans but top quality.Competitive price; Top quality; Fast shipping; Combi order; Drop shipping available; Best and Timely Service; 100% Satisfaction; Big discount for big order.our company\'s christian louboutin shoes online store,offer you the cheap christian louboutin pumps but top quality.

teng2520  at：Apr 7, 2012 

zhong0817  at：Apr 14, 2012 

zhong0817  at：Apr 14, 2012 

Your article is useful for me,thank you.welcome to our Christian Louboutin sale Beats by dr dre chanel bags air yeezy Christian Louboutin shoes Christian Louboutin outlet chanel handbags air yeezy 2 kanye west shoes Monster Beats dr dre headphones

christian  at：Apr 18, 2012 

We are true religion outlet online store 　　we will offer you the cheap true religion jeans but top quality.
　　Competitive price; Top quality; Fast shipping; Combi order; Drop shipping available; Best and Timely Service; 100% Satisfaction; Big discount for big order.
　　our company christian louboutin shoes online store,offer you the cheap christian louboutin pumps but top quality.
　　Competitive price; Top quality; Fast shipping; Combi order; Drop shipping available; Best and Timely Service; 100% Satisfaction; Big discount for big order.
　　our company beats by dre online store,offer you the cheap dr dre beatsbut top quality. monster beats

teng2520  at：Apr 18, 2012