Answer Market Sizing Questions
Questions about market sizing are common during different types of job interviews. These often vague questions test general business acumen, and point out some of the specific challenges of running most kinds of companies. Entry-level traders may get these questions in a Wall Street interview, while some other MBAs and assorted business people also face them in fields like retail. If you need to know how to answer market sizing questions, here are some of the basic steps that individuals use.
Contents
Steps
- Work from the data that you have for a specific market sizing problem. Often, the challenge in market sizing problems is addressing various factors that could be called variables, because they may change over time or because they may not be transparent to the business involved in researching market sizing.
- Collect your known elements. By understanding what you know, you can work on how to answer what you don't know.
- Identify unknowns in a market sizing scenario. Try to isolate the questions that you will need to solve in a market sizing situation. Much like complex math, market sizing includes both static and variable components that work together to provide estimates of a market.
- Use your own logical methods to extrapolate estimates for market sizing.
- Show your work. When you are answering market sizing questions, it often helps to let the questioner in on how you're going about solving a specific market problem. For instance, some employers have been known to ask such random questions as how many flights go over a specific city each day. Here, the savvy interviewer will start with basic elements like how many airports are in any given area, and start to estimate unknown variables like how many flights go out of each airport per day.
- Understand the vagueness of market sizing questions and work with their versatility. It's important to keep in mind that many times there are no right answers for these types of questions, but only an approach that is critical to your value to an employer. In most cases, the interviewers are listening for how you would solve a general problem, evaluating your sense of logic and leadership. Don't be afraid to put your best foot forward as you approach a technical problem with creativity.
Tips
- Have a general idea of relevant demographics. Again, many interviewers aren't looking for you to give magic answers about an unknown market. By knowing more consumer data, you will be able to give a tighter answer to a market sizing question.
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