Consider the following example:
"Estimate the size of the pet food market in London"
This is the only information initially provided. As in a real interview, no numbers are given upfront.
This step always comes before building the sizing structure. We need to ensure the request is fully understood by clarifying the key elements of the problem.
Examples of clarifying questions:
-Are we estimating annual revenue or volume?
-Are we focusing on Greater London or the metropolitan area?
-Which animals are included (dogs only, or dogs and cats)?
Assumptions (provided by the interviewer):
-Annual Greater London market size in terms of revenue ($)
-Pet food for dogs and cats only
This is a demand-driven Type 1a case because:
One potential challenge of this demand approach is that it requires estimating London’s population, which may not be immediately known. However, in interviews, the interviewer will typically provide this figure if asked, or accept a reasonable approximation.
Before calculating, define the macro drivers:
Market value = Number of pets × Food consumption per pet× Price per unit
Now break down each macro driver:
Notice the logic:
Population → Households → Pet ownership → Pets → Consumption → Price → Market value
Only once this pyramid is clear do we calculate.
In most interviews, the interviewer will provide London’s population if asked. However, you should still be able to anchor a reasonable range.
For example:
-Think about the population of the city you currently live in.
-Is London significantly larger or smaller?
-London is one of the largest European cities → a range of 8–10M is reasonable.
Assume London population ≈ 9M
Assume average household size ≈ 2.4 people.
Households = 9M / 2.4 ≈ 3.75M
🔎 Why this assumption is reasonable:
-In developed urban areas, household size typically ranges between 2–3 people
Now estimate the percentage of households owning pets.
Assume ≈ 40% of households own at least one pet.
Pet-owning households ≈ 3.75M × 40% ≈ 1.5M
🔎 Why this assumption is reasonable:
-In developed markets, pet ownership is common but not universal
-Personal experience helps: think about your friends and family — roughly 1 in 3 to 1 in 2 households may own a pet
Assume:
-60% dogs
-40% cats
-Average pets per pet-owning household ≈ 1.2
Total pets ≈ 1.5M × 1.2 ≈ 1.8M
Dogs ≈ 1.08M Cats ≈ 0.72M
🔎 Why this assumption is reasonable:
-Dogs and cats are typically the dominant pet categories
-It is reasonable to assume dogs slightly outnumber cats in urban environments
-Some households own more than one pet → 1.2 captures this without overcomplicating
-Personal observation again helps: how many households do you know with multiple pets?
Avoid over-segmentation unless it materially changes consumption.
Estimate average daily consumption.
Dogs:
-Assume ≈ 200g/day
-360 days/year
-Annual consumption per dog = 200g × 360 = 72,000g ≈ 72kg/year
Total dog volume:
1.08M dogs × 72kg ≈ 77.8M kg
Cats:
-Assume ≈ 70g/day
-360 days/year
-Annual consumption per cat = 70g × 360 = 25,200g ≈ 25kg/year
Total cat volume:
0.72M cats × 25kg ≈ 18M kg
Total volume:
77.8M kg (dogs) + 18M kg (cats) ≈ 95.8M kg ≈ ~96M kg
🔎 Why this assumption is reasonable:
-Food quantities can be anchored to intuition: a medium-sized dog eating roughly a bowl per day
-Cats consume significantly less than dogs
-The goal is directional realism, not veterinary precision
Assume:
-10kg bag costs ≈ $30 → $3 per kg
Market value ≈ 96M kg × $3 ≈ $288M
🔎 Why this assumption is reasonable:
-Retail pet food pricing in developed markets typically ranges between $2–5 per kg depending on brand
-$3 per kg represents a reasonable midpoint
-Converting bag price into per‑kg price ensures unit consistency