Market Sizing Case Interview Questions: 7 Worked Examples
Updated: Oct 19
Market sizing case interview questions ask you to estimate demand, revenue, or capacity when complete data is unavailable. Start by defining what you are sizing, build a simple model, explain your assumptions, and check whether the result makes sense.
The seven worked examples below use invented assumptions for practice. They are not estimates of real markets. In an interview, use any data provided, explain your reasoning, and revise assumptions when the interviewer challenges them.
A repeatable approach to market sizing
Clarify the scope before calculating
Confirm the geography, customer, product, time period, and output unit. “How big is the coffee market?” could mean cups sold per day, annual retail revenue, or packaged coffee sold to households. Those require different models. Ask one or two focused questions rather than beginning with an unsupported population guess.
Choose demand, supply, or a combination
A demand model often starts with people, households, or businesses, then applies relevant eligibility, usage, and frequency assumptions. A supply model starts with outlets or available capacity. Write the structure first. Units sold × average realized price gives revenue, but neither market revenue nor total demand is automatically one company’s sales.
Show assumptions and keep track of units
Use rounded numbers that you can calculate reliably. Explain why an assumption is plausible and which assumptions need better evidence. Keep daily, monthly, and annual quantities separate. Segment customers when their behavior differs meaningfully, but avoid extra categories that do not improve the model.
Check and communicate the answer
Compare the estimate with an independent approach or a practical capacity constraint. Test the assumptions that drive the answer most. Finish with the quantity, timeframe, key assumptions, and limitation. In interviews, I find an answer easier to assess when the candidate makes the reasoning visible rather than presenting a number without context.
For an example of explaining your approach and calculations aloud, see McKinsey’s Electro-Light practice case. Follow the specific employer’s instructions about calculators and interview format.
Seven market sizing questions with worked answers
1. How many takeaway coffees are sold in a city each day?
Scope: purchased takeaway cups on an average day, excluding coffee made at home. Hypothetical assumptions: 1 million residents, 70% adults, and 40% of those adults buying an average of one takeaway coffee daily.
Calculation: 1,000,000 × 70% × 40% × 1 = 280,000 cups per day. At an assumed $4 per cup, that is $1.12 million in daily sales revenue. This simplified model excludes visitors and does not distinguish weekdays from weekends.
Check: if 700 outlets supplied all those cups, each would average 400 cups a day. Ask whether that is plausible given opening hours, service capacity, and other places selling coffee. A capacity check can reveal that your purchase frequency needs revision.
2. How many smartphones are sold annually in a country?
Scope: new smartphone units purchased by individual consumers in one year. Hypothetical assumptions: 30 million residents, 80% owning one smartphone, and a three-year average replacement cycle in a stable market.
Calculation: 30 million × 80% = 24 million devices in use. Then 24 million ÷ 3 years = 8 million replacement purchases per year. At an assumed average sale price of $500, replacement revenue is $4 billion annually.
Check: devices in use are a stock; annual purchases are a flow. The model omits first-time buyers, population growth, second devices, and used phones. Clarify whether those belong in the question before adding them. A replacement cycle is a simplifying assumption, not a claim that every device lasts exactly three years.
3. What is the annual gym membership market in a town?
Scope: annual membership fee revenue from town residents, excluding personal training and visitor purchases. Hypothetical assumptions: 200,000 residents, 75% adults, and 20% of adults holding one paid membership.
Calculation: 200,000 × 75% × 20% = 30,000 members. At an assumed average realized fee of $40 per month, annual revenue is 30,000 × $40 × 12 = $14.4 million.
Check: if the town has 30 gyms, the estimate implies 1,000 paying members per gym. That is not 1,000 people exercising there simultaneously. Consider attendance patterns, cancellations, discounts, and whether people travel to gyms outside the town.
4. What is the annual hotel room market in a destination?
Scope: room revenue earned by hotels in the destination, excluding food, events, and other services. Use a supply model here. Hypothetical assumptions: 40 hotels, an average of 100 available rooms each, 70% occupancy, and an average realized room rate of $150.
Calculation: 40 × 100 = 4,000 available rooms. Annual sold room nights are 4,000 × 365 × 70% = 1,022,000. Room revenue is 1,022,000 × $150 = $153.3 million per year.
Check: a room can be sold repeatedly across different nights, so room inventory and annual room nights are different quantities. Seasonal demand, unavailable rooms, hotel size, and rate variation would refine the estimate. If you use an overall average rate, it should reflect sold room nights rather than an unweighted average of hotel rates.
5. What is the annual market for a business software product?
Scope: subscription revenue potential for a specified customer segment at an assumed adoption level. Hypothetical assumptions: 100,000 businesses, 30% meeting the product’s needs and size criteria, 50% adoption within that eligible group, and 10 paid users per adopting business.
Calculation: 100,000 × 30% × 50% × 10 = 150,000 paid users. At an assumed $20 per user per month, annual subscription revenue is 150,000 × $20 × 12 = $36 million.
Check: all 30,000 eligible businesses adopting at the same seat and price assumptions would produce $72 million annually. The $36 million scenario assumes only half adopt. Neither figure is a revenue forecast for one vendor; market share, competition, sales capacity, and pricing still matter.
6. How many public charging points would meet daily demand?
Scope: simultaneously usable public charging points needed for a defined service area. Hypothetical assumptions: 100,000 electric vehicles, 20% needing one public charging session on an average day, and eight completed sessions per point per day at the assumed utilization level.
Calculation: 100,000 × 20% = 20,000 sessions per day. Then 20,000 ÷ 8 = 2,500 charging points. This is a capacity estimate, not annual charger sales or market revenue.
Check: average daily capacity does not guarantee sufficient capacity at peak times or in the right locations. Charging duration, power, downtime, queuing, and home charging access could change the answer. Also distinguish a charging point from a site that contains several points.
7. How many food delivery orders are placed each week?
Scope: orders placed by households in a city, excluding business orders. Hypothetical assumptions: 600,000 residents, an average of three people per household, 40% of households using delivery, and two orders per participating household each week.
Calculation: 600,000 ÷ 3 = 200,000 households. Then 200,000 × 40% × 2 = 160,000 orders per week. At an assumed average order value of $25, that is $4 million in weekly order value, not delivery-platform revenue or profit.
Check: at 30% household participation, the estimate falls to 120,000 orders; at 50%, it rises to 200,000. As an independent check, 800 participating restaurants would average 200 delivery orders each week under the base case. Explain what would make that comparison more or less plausible.
Practice explaining the model, not memorizing the answer
Try each question again without looking at the worked answer. Spend a moment on scope, state the model, and calculate with units. Then change one assumption and explain the impact. If you find an arithmetic error, correct it plainly and continue.
For your broader interview plan, use the interview preparation guide. If follow-up questions make you lose your place, practice the approach in answering tough questions without sounding rehearsed. If you are applying for an analytics role, practice with these marketing analyst interview questions as well.
The course below can help with your answer structure and delivery. Pair it with case practice so you can explain a model while doing the arithmetic.
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Frequently asked questions
What is a market sizing question in a case interview?
It is an estimation question about a defined market, demand, revenue, or capacity. The interviewer can use it to assess structure, assumptions, numerical reasoning, and communication. Clarifying the requested output is part of answering it.
Is there one correct market sizing answer?
There may be a target answer when the interviewer supplies specific data, but open estimation questions can support different defensible models. A plausible final number still needs clear assumptions, correct units, and sound arithmetic.
Should I use a top-down or bottom-up approach?
Choose the approach that fits the question and available information. Population and usage can help estimate demand; outlets and capacity can help estimate supply. A second approach is useful as a check when it adds independent information.
What if I do not know the population or purchase frequency?
Ask whether you should use an assumption, then state a rounded estimate and explain why you chose it. Identify it as uncertain and test the effect of changing it. Use any provided data instead of replacing it with a guess.
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