The document discusses various methods for estimating market size, including defining key terms, frameworks for market sizing, and top-down versus bottom-up approaches. It provides examples of estimating total addressable markets, sales addressable markets, and target markets using different inputs and assumptions. Segmenting markets and developing estimation models using multiple data sources and steps are also covered.

1. Definitions
Market
• Customers
MARKET
INDUSTRY
CUSTOMER
COMPETITOR
CUSTOMERCUSTOMER
CUSTOMER CUSTOMER CUSTOMER
COMPETITOR COMPETITOR COMPETITOR
COMPETITOR
SEGMENT
SECTOR
Industry
• Sellers or providers
Adapted from Global Intelligence Alliance, 2012 1

2. Framework: Three
Aspects to Market
Sizing
SEGMENTS
ESTIMATION
MODEL
DATA
SOURCES
2

3. Markets: Total, Sales, Target
S
Total AddressablePerfect World
Scenario
No competitors
All the financing
available to
grow
Adapted from Blank & Dorf, 2012
3

4. Markets: Total, Sales, Target
S
Total Addressable
Sales Addressable
Real World
Constraints
Geography
Competition
Sales channels
Adapted from Blank & Dorf, 2012
4

5. Markets: Total, Sales, Target
S
Total Addressable
Sales Addressable
Target
Priority
Scenario
Most desirable
Most feasible
5
Adapted from Blank & Dorf, 2012

6. Markets: Total, Sales, Target
S
Total AddressablePerfect World
Scenario
No competitors
All the financing
available to
grow
Adapted from Blank & Dorf, 2012
6

7. Markets: Total, Sales, Target
S
Total Addressable
Sales Addressable
Real World
Constraints
Geography
Competition
Sales channels
Adapted from Blank & Dorf, 2012
7

8. Markets: Total, Sales, Target
S
Total Addressable
Sales Addressable
Target
Priority
Scenario
Most desirable
Most feasible
8
Adapted from Blank & Dorf, 2012

9. Segmentation
Total Addressable Market
PRODUCT GROUP
SEGMENT
PRODUCT
SEGMENTSEGMENT SEGMENT
PRODUCT
POPULATION GROUP
CUSTOMERCUSTOMER
Adapted from Global Intelligence Alliance, 2012 9

10. Estimation Modeling in 5 Steps
1. Brainstorm and map out possible inputs,
outputs & calculations
2. Fill in data you currently have
3. Identify data gaps
4. Plan how to source and fill in data gaps
5. Compare estimates as result of different
models
This slide deck has been made available
under a creative commons license to reuse,
remix, repurpose for non-commercial
Adapted from Global Intelligence Alliance, 2012 10

11. What’s an Estimation Model?
Adapted from Global Intelligence Alliance, 2012
Vaccination
coverage
Price for one booster dose in DEFENSE scenario
Market size
(units)
Birth cohorts
Toddler cohorts
Price for one primary dose in DEFENSE scenario
Child cohorts
Adolescent cohorts
Price per country for one primary dose
Market size
(units)
# of primary
shots/year
# of booster
shots/year
Price per country for one booster dose
Public
channel %
Market size
(value in USD)
Private
channel %
Pre & post public
market switch year
Public
channel %
Private
channel %
x x
+
=
+
+
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11

12. Two Approaches
Top-down
Top-down estimates approach the true value from
above, by starting with broad indicators which are
narrowed down using assumptions.
Pro Often a quicker and easier way to size a market
Con Tends to give too high estimates
Bottom-up
Bottom-up estimates approach the true value from
below, by summing up known supply data from
market participants.
Pro Often considered more conservative (accounts
for capacity limitations of the industry).
Con Usually requires primary research, therefore
often expensive to do.
Statistic
Data point
Total market size
Assumption Statistic
Data point
Assumption
Supplier 1
Segment total
Total market size
Supplier 2 Supplier 3
Segment total
Supplier 4
Source: Global Intelligence Alliance, 2012 12

13. Board Games: Top-down
HH with Child
Total market size: Board Games in U.S.
HH Adults
% Purchase BG
Total HH Adult Market
# of Games Purchased
per year
Price per Game
% Purchase BG
Total HH w Child Market
# of Games Purchased
per year
Price per Game
Adapted from Gentschev, 2010
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13

14. Board Games: Bottom-up
Hasbro
% (Board
Games)
Total market size: Board Games in U.S.
Mattel Ravensburger
% Revenue
(Puzzles)
Rio Grande
% Revenue
(Strategy)
% (U.S.
Sales)
Total 1 Total 2 Total 3 Total 4
% (Board
Games)
% (U.S.
Sales)
% (U.S.
Sales)
% (U.S.
Sales)
Adapted from Gentschev, 2010
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under a creative commons license to reuse,
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14

15. Estimating the Diaper Market
300M (estimated)
80 years (estimated)
300M ÷ 80 = 4M (approx.)
Total U.S. population (all ages)
Average life expectancy
Population per each 1-year age group
Adapted from L.E.K. Consulting, 2013.
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under a creative commons license to reuse,
remix, repurpose for non-commercial
15

16. Diaper market by age (cont’d)
Segments # of 1-yr age
groups
Pop per
1 year age
group
Pop per
segment
Diaper
utilization
rate
Diapers used
per day
Total # of
diapers used
per day per
segment
Infant,
0-1 years
1 x 4M = 4M 100% 7 = 28M
Toddler,
1-2 years
1 x 4M
= 4M
100% 6 = 26M
Toddler,
2-3 years
1
x 4M = 4M
80% 5 = 20M
Child,
3-5 years
2
x 4M = 8M
50% 3 = 16M
Adult,
5-74 years
69
x 4M = 276M
15% 3 = 124.2M
Senior,
75-80 years
5
x 4M = 20M
40% 5 = 40M
300M (estimated)
80 years (estimated)
300M ÷ 80 = 4M (approx.)
Total U.S. population (all ages)
Average life expectancy
Population per each 1-year age group
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under a creative commons license to reuse,
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16

17. Segments Total # of
diapers used
per day per
segment
# days per
year
Total # of
diapers used
per year per
segment
Average
revenue per
diaper *
Total
estimated
revenue per
segment
Infant,
0-1 years
28M x 365 = 10.2B 0.14 = $1.4B
Toddler,
1-2 years
26M x 365
= 9.5B
0.14 = $1.3B
Toddler,
2-3 years
20M
x 365 = 7.3B 0.14
= $1.0B
Child,
3-5 years
16M
x 365 = 5.8B 0.14
= $812M
Adult,
5-74 years
124.2M
x 365 = 45.3B 0.14
= $6.3B
Senior,
75-80 years
40M
X 365 = 24.6B 0.14
= $3.4B
TOTAL 254.2 X 365 = 102.7B
0.14
= $15B
Diaper Market, Dollar Value (cont’d)
*Average cost per diaper will vary on segment, quantity sold, material employed,
brand premium and if end-market is retail or wholesale.
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17

18. Sourcing the Data: Secondary
Type of data Example of source
Statistics Economic statistics
Customs databases
Government statistics
Industry data Industry associations
Market research reports
Investor reports
Product data Product brochures
Product reviews
News Free public aggregators (incl. Google)
Fee-based news aggregators
Financial data Global company financials databases
Local company financials databases
Company data Public company directories
Securities exchanges (S.E.C., SEDAR)This slide deck has been made available
under a creative commons license to reuse,
remix, repurpose for non-commercial
Adapted from Global Intelligence Alliance, 2012 18

19. Triangulation
Estimate A
(e.g., primary research)
Estimate B
(e.g., product complements where
market sizes are known)
Estimate C
(e.g., based on
macroeconomic indicators)
Ideally, all estimates are
independent of each other
Adapted from Global Intelligence Alliance, 2012
This slide deck has been made available
under a creative commons license to reuse,
remix, repurpose for non-commercial
19

20. Framework: Three
Aspects to Market
Sizing
SEGMENTS
ESTIMATION
MODEL
DATA
SOURCES
Industry norms,
decision-making context
Develop more than one model,
compare estimates
Secondary + primary
20