Market Sizing

Guidance on how to crack market sizing questions, a common ask in consulting and other similar companies. Incudes pro tips and common mistakes to avoid

When a market sizing

A market sizing is the process of estimating the potential size of a market, often in terms of units, revenue or sales. This process requires you to make assumptions and perform rough calculations to estimate the market´s size with limited or no data available.

Market sizing exercises are designed to test mainly the problem-solving and quantitative reasoning. They simulate a consultant’s real-world challenge: How would you make your best estimate if you didn't have access to existing data or the internet?

As a consultant, you often need to estimate addressable market sizes or financial impact for your client without having all the necessary pieces of data.

Examples of market sizing include:

"How many trips do Uber drivers make weekly in New York City?"

"What's the market size for residential heaters in the country?"

Market sizing exercises are often used in two situations:

SITUATION #1: Part of a case interview (3–6 minutes)

• They are typically asked at the beginning of consulting case interviews, after the framework section.

• Rather than providing you with the necessary piece of information, the interviewer asks you to estimate it yourself.

SITUATION #2: The main quantitative test (13–30 minutes)

• They may be asked by some consulting companies (often non- MBB firms) as the main quantitative test, replacing a full standard business case.

• A market sizing may take 15 to 30 minutes. You should investigate the most appropriate time limit for the firm you are targeting, so you can anticipate the level of depth needed to solve the exercise.

Solve it: Step by Step

The interviewer will often directly ask you a question like:

"What's the market size for takeaway coffee in New York?"

After clarifying any questions you may have, you will be expected to structure your approach, mapping out your assumptions, and performing the calculations. The high-level structure for both SITUATION #1 and SITUATION #2 is similar; the main difference is the level of sophistication/ depth required to get to the solution.

SITUATION #1 (Part of a case interview)

Since you only have a few minutes, it´s important that you find simple calculation steps and make simplistic assumptions. For example, for the number of coffees per person, you may just take as reference the number that you drink.

• Goal: Use a very high-level approach and simple calculations.

• Approach: Population x % adult x # coffees/ week x # weeks

• Assumptions: 300 million population, 60% adults, 5 coffees/ week, 52 weeks

• Calculation: 300 x 60% x 5 x 52

SITUATION #2 (the main quantitative test)

You are given more time, and therefore, there is an expectation that your assumptions will be more sophisticates.

• Goal: Use a high level approach and develop the calculations.

• Approach: Adult population x % drink coffee x # coffees/ week x # weeks

• Assumptions:

Assumption Category	Derivation / Justification	Estimated Figure
Adult Population	Assumed 80-year life expectancy and an even distribution. Drinking age is 15-70 years. (300M / 80 years =  3.75M people/year). (70 - 15) x 3.75M = 206 million adults	220 million
% Drinking Takeaway Coffee	Exclude 10% (dislike taste, medical issues). Exclude 30% (low socio-economic level, as takeaway is expensive). 220 x (1 - 0.10) x (1 - 0.30)	138 million
Weekly Consumption Segmentation (Based on the 138M drinkers):
Heavy Drinkers (20%)	Assume 2 takeaway coffees/day = 14/week.	$138 x 0.20 x 14
Medium Drinkers (60%)	Assume 1 takeaway coffee/day = 7/week.	$138 x 0.60 x 7$
Sporadic Drinkers (20%)	Assume 2 takeaways/week.	$138 x 0.20 x 2$

Both cases are examples of top-down estimations, where you take a large number and you refine and break it down until you arrive at a final estimation.

An alternative, perhaps less used but useful in case you don´t know the large number (e.g. total population), is to start with a small number and then build up and increase the number (e.g. starting with the coffee a single person drinks and building up from the figure). This is called bottom-up estimation.

Here you can read an example of top-down vs bottom-up related to the volume of toothbrushes in the US.

How to practice

Below are some steps that help you get started when you have no experience in market sizing.

• Understand the format: Read through a few market sizing question and their answers to understand the expected structure and the typical approach to solving these types of problems.

• Focus on fundamentals: Begin working through several practice cases, initially disregarding the time it takes you to get to a solution. Focus on:

  • (1) Structuring well

  • (2) Practicing making and justifying assumptions (this is especially relevant for #SITUATION 2)

  • (3) Sharpening your mathematical skills

• Transition to mock cases: Once you feel comfortable with the practice, begin practicing mock cases (speak your answers aloud and take time constraints into consideration).

  
  

Maths

The math involved in market sizing exercises are simpler comparted to full business cases. Here are some tips to consider:

• Know basic socio-demographic numbers such as the total population, life expectancy of the country where you are interviewing and main cities, as well as key figures for major global markets (such as the US, China, and the largest economies worldwide).

• Use simple segmentation, such as heavy/medium/sporadic users or high/medium/low-income people.

• Simplify age assumptions:

  • For age-based calculations, always use an easily manageable number for life expectancy (e.g., 70 or 80).

  • In developed countries, you can often assume a relatively rectangular population pyramid (meaning a similar percentage of people at each age, from 1 year old up to the life expectancy).

  • For developing countries, you can assign a higher percentage to younger ages (for example, assuming 50% of the population is below 30 and 50% is above).

• For replacement demand - when estimating a market for a product that is replaced, such as an iPhone, use the product's average lifetime. For example, if there are about 300 million smartphones in the US (roughly 1 per person) and smartphones are typically replaced every ~3 years, then that means ~100 million smartphones are replaced annually.

• Understand key concepts:

  • Total Market: The total size assuming a company has 100% market share

  • Addressable Market: The market that we can realistically sell to with our current capabilities

  • Market Share: The % of the market that is currently held by the company (or client)

• Document and Simplify:

  • Always notate the units (e.g., k, M, B) for large numbers.

  • Be sure to round up large numbers to simplify calculations.

  
  

Here are some websites that give you free tips on how to be improve your math skills:

Math Drills | Fast Math Case Prep

Market sizing: the ultimate guide (inc framework and cheat sheet) - IGotAnOffer

10 steps to solving any sizing question | Management Consulted

Errors to avoid

When connecting with the interviewer

• Maintain eye contact. Consulting is not only about solving problems; it is about connecting with your client (or interviewer)

• Do not (wrongly) assume that being professional equals being serious. You need to connect with the interviewer, and a smile can help. Also, try to project enthusiasm with for the case. If you just seem to suffer, they won´t be excited about working with you down the road

• Do not be unprepared - always have your paper, a pencil, and a calculator ready

• Do not ask the interviewer if you are on track or if your approach is correct. Assume it´s correct and keep going; you need to look confident.

• Do not believe the interviewer just wants to hear the final magic number. They want to know how you think and the process by which you get to the answer. Involve them in your thinking!

• Do not use generic terms when discussing the structure. You need to show that you understand the client and the market. For example: in a medical context, the term "treatment" is better than product, "patient" is better than client, and "hospital" is better than shop, etc.

To get the problem right:

• Do not hold back important clarifying questions for fear of sounding uninformed. You need to know the basics to get to the bottom of the problem (e.g. How do you define "trips"? Does it include only trips with passengers or also food delivery rides?)

• Do not forget the core sizing question. Make sure you keep it in mind or revise your notes if needed. Never ask the interviewer what the question was!

• When you get to a number, do not assume it is correct. Take a second to think if it makes sense in a real-word context.

• If you make a mistake, do not panic. You can say "I think I may have made a mistake. Let me quickly review my math to make sure I got it right". What matters is that you realize the error fast.

Networking

Preparing for market sizing questions is much more straightforward than for business cases, so the personal connection with an interviewer may be less key here. Still, it is useful to know people with experience in consulting to practice a few mock market sizing cases.

Finding practise partners

• Consulting contacts: If you know someone who works at a consulting firm, ask for a favor: 25-30 minutes to run through one or two mock cases (when you already feel you are 99% ready).

• Self-study options: If you don´t know anyone, it is perfectly fine. There is plenty of reading material (see relevant links below)

• Practice: Finally, and more importantly, find people to do mock practice with - either current consultants or other candidates who are in the same process as you.

  
  

  If you don´t know any consultant:

• Leverage LinkedIn: Reach out to people who have a similar position to the one you are applying to - even if you don't know them (read here for more detail).

  
  

  If you want to find other applicants to practice with:

• Online platforms: Find candidates in platforms and forums to practice with. Although the majority may be practicing business cases, they can still help you with your market sizing practice

• Mock session setup: Typically, you agree on having a videoconference and doing two mock cases. First, one person acts as the interviewer, and then that same person becomes the candidate. This format closely resembles a real interview

• Practice level: This is recommended when you have already done some mock cases while keeping track of the time. Also, try to choose a partner who is at the same level of practice (e.g. +10 mock cases).

• Get diverse feedback: Practice with one more than one partner, so you get different feedback

• Add value: Prepare a case to give to your partner, so your feedback is better, and you add value to him/her

  
  

  Where to find?

  Groups dedicated to consulting prep on LinkedIn, Facebook or other similar platforms

Platform Type	Example Resources/Groups	How They Help You Find Partners
Dedicated Case Prep Communities	PrepLounge: A major platform designed specifically for consulting prep.	Offers a "Meeting Board" feature to schedule mock interviews with peers worldwide, filterable by experience level and language.
	CaseCoach / MyConsultingCoach: Offer structured toolkits, but also often have Practice Rooms or Partner Search sections for candidates.	MyConsultingCoach has a partner browse feature, sorting by reliability and experience. CaseCoach offers unlimited mock interviews with other top candidates in their Practice Room.
Professional/Social Networks	LinkedIn/Facebook Groups: Look for groups using terms like "MBB Case Prep," "Management Consulting Interview Practice," or "Consulting Case Partners."	These groups facilitate direct outreach. Candidates post their availability, target firms, and experience level to find similar partners.
	Reddit Communities (e.g., r/managementconsulting):	Candidates frequently post threads asking to connect with others who are currently preparing for interviews.
AI/Self-Study Tools	CasewithAI, RocketBlocks, CaseStudyPrep.ai: (Not for peer practice, but valuable if you can't find a live partner.)	Offer AI-powered simulations, drills, and structured feedback on market sizing, math, and structuring, serving as a substitute for human practice.
University Consulting Clubs	Harvard GSAS Consulting Club (or similar clubs at your alma mater).	Often manage Case Practice Sign-Up Sheets or offer Partner Matching for current students/alumni based on experience and availability.

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