seekinghope
New member
Hi guys, i'm back with another market estimations case. The following question was asked in a interview and i solved the case in the following way. Now tell me as an interviewer of mckinsey or some other top consulting firm would you genuinely be satisfied with this answer and hire me. Or would you expect a much better answer.
Q. What is the size of mattress market in India?
Answer.
b. what type of mattresses are we considering here. is it single mattress or double mattress or spring mattress.
c. are we considering mattresses sold to households or even mattresses sold to businesses.
The interviewer replied saying we are trying to arrive at the result in value and we are considering all type of mattresses. Consider only mattresses used by households.
b. Assuming 50% of the population are families and considering 4 members per family on an average. The family would require 3 beds, one for the couple and one each for the kids. So on an average it's 0.75 bed per person. Therefore no of beds in use for this segment of popullation would be 126 crores * 50% * 0.75 = 47 crore beds.
c. Another 20% of the population are married and unmaried couples living together. They use one bed. so average bed per person would be 0.5. Therefore the number of beds in use would be 126 * 20% *0.5 = 12 crore beds
d. Rest 30 % population are singles. They require 1 bed per person. Therefore, the beds in use = 126 * 30% * 1 = 37
TOTAL NUMBER OF BEDS IN USE = 47 + 12 + 37 = 100 CRORES BEDS ( ROUNDED OFF TO NEAREST MULTIPLE OF 10)
e. The life span of beds is somewhere around to be 5 to 7 years. so i would like to take a replacement rate of 20%( 1/5*100) and growth rate to be 1%. Therefore the number of beds sold equals to = 100 crore beds * 21%( 20+1) = 21 crore beds sold per year.
f. As there no data with the interview w would assume that Price of a singe mattress in india is around 5000 INR, double mattress is 10000, spring mattress is around 20000. Therefore the average price of a mattress equals to (5k+10k+20k)/ 3 = around 10000 INR( rounded off to the nearest multiple of 10000).
g. Market Size of mattress would be = 21crores beds * 10000 = 2100 billion rupees.
Q. What is the size of mattress market in India?
Answer.
- MY CLARIFYING QUESTIONS WERE AS FOLLOWS.
b. what type of mattresses are we considering here. is it single mattress or double mattress or spring mattress.
c. are we considering mattresses sold to households or even mattresses sold to businesses.
The interviewer replied saying we are trying to arrive at the result in value and we are considering all type of mattresses. Consider only mattresses used by households.
- SOLUTION
b. Assuming 50% of the population are families and considering 4 members per family on an average. The family would require 3 beds, one for the couple and one each for the kids. So on an average it's 0.75 bed per person. Therefore no of beds in use for this segment of popullation would be 126 crores * 50% * 0.75 = 47 crore beds.
c. Another 20% of the population are married and unmaried couples living together. They use one bed. so average bed per person would be 0.5. Therefore the number of beds in use would be 126 * 20% *0.5 = 12 crore beds
d. Rest 30 % population are singles. They require 1 bed per person. Therefore, the beds in use = 126 * 30% * 1 = 37
TOTAL NUMBER OF BEDS IN USE = 47 + 12 + 37 = 100 CRORES BEDS ( ROUNDED OFF TO NEAREST MULTIPLE OF 10)
e. The life span of beds is somewhere around to be 5 to 7 years. so i would like to take a replacement rate of 20%( 1/5*100) and growth rate to be 1%. Therefore the number of beds sold equals to = 100 crore beds * 21%( 20+1) = 21 crore beds sold per year.
f. As there no data with the interview w would assume that Price of a singe mattress in india is around 5000 INR, double mattress is 10000, spring mattress is around 20000. Therefore the average price of a mattress equals to (5k+10k+20k)/ 3 = around 10000 INR( rounded off to the nearest multiple of 10000).
g. Market Size of mattress would be = 21crores beds * 10000 = 2100 billion rupees.