What is your understanding of Market
Size ?
• IN BEESTHO VILLAGE, there are 20 people
who wash dishes with ash.
• They get this ash from the fires that they
use to cook their food – absolutely free of
cost.
WHAT IS THE MARKET SIZE (IN UNITS) OF DISHWASH IN
BEESTHO VILLAGE? (ASSUMING ONE PERSON BUYS ONE
UNIT IN ONE YEAR)
THE MARKET SIZE IS 0 !
WHY ?
BECAUSE AT THE MOMENT, NO ONE IS USING
DISHWASH
MARKET SIZE IS DEFINED BY THE CURRENT
USAGE.
WHAT IS THE POTENTIAL MARKET SIZE OF
DISHWASH (ALSO KNOWN AS MARKET
POTENTIAL) ?
Some tips for interviews and GDs
• DO NOT JUMP THE GUN – Can be dangerous.
• In an interview/before GD starts, ask for all
information that may be required – whatever
need to be assumed will become clear.
• COMPLETE THE SET OF INFORMATION (Given
+ Assumptions) before you give any answers.
MARKET SIZE /POTENTIAL
HOW MANY
USE/CAN
USE
×
WHAT
FORMAT
THEY USE
×
HOW
MUCH THEY
USE
=
TOTAL
TURNOVER
Market Potential
for a Product
How many Can
use it (and buy
it) – THE
PRODUCT CAN
FULFIL HOW
MANY
CONSUMERS’
NEEDS
USE TARGET SEGMENT
DEFINITIONTO
CALCULATE
How often they
can use it (and
buy it)
USE CONSUMPTION
OCCASIONS TO
CALCULATE
CALCULATE MARKET POTENTIAL FOR
EXAMPLE
HAIR STYLING GELS – What is the market
potential ?
Quickly think on Segmentation
Categories and Work up a TG
• DEMOGRAPHIC
– Male
– 16-25 age
– Disposable Income > 3-4 lakh p. a.
• GEOGRAPHIC
– Indian/Urban
• BEHAVIORAL
– Likes to groom himself
– Fond of partying, going out, trying new looks (uses gel in
these occasions)
• PSYCHOGRAPHIC
– Identifies with Bollywood contemporary machismo
NOW LET US BREAK DOWN THE TG TO
GET MARKET POTENTIAL
Start with population of India
1.2 billion
URBAN
20%
240 million
MALE
50%
120 million
18 – 25 years of AGE
20%
24 million
Income > 3.5 lakh
10%
2.4 million
Average Consumption per month – Rs 50
Total Consumption per year = 2.4 million * Rs 50 * 12
Rs 144 crore
SOAPS FOR HOTELS
SENSITIVE TOOTHPASTE
FRUIT FLAVORED TOOTHPASTE
SMART PHONES
SMART PHONES COVERS
CARS
SUVs
CAR PERFUMES
BIKES
SPORTS BIKES
BIKE HELMETS
LET US COMPARE THAT WITH
MARKET SIZE
• Current Market Size in India for Men’s
Grooming is Rs 1500 crore
• Hair Gel is Nascent – take about 2-3%, viz 30 –
45 crore.
• Analyse 4Ps to understand why the gap
between Market Size and Market Potential is
there.
UNDERSTANDING MARKET SIZE AND MARKET
POTENTIAL FOR A CATEGORY
NO
EXCLUDED FROM
MARKET
EXCLUDED FROM
MARKET
EXCLUDED FROM
MARKET
EXCLUDED FROM
MARKET
NO
WANTS THE
PRODUCT?
YES
NO
AFFORD THE
PRODUCT ?
YES
NO
HAVE ACCESS TO
THE PRODUCT ?
YES
PRODUCT
AWARE OF THE
PRODUCT?
YES
PRICE
PLACE
PROMOTION
PART OF MARKET
BACK TO OUR VILLAGE! WHAT IS THE MARKET POTENTIAL WHEN
YOU HAVE THE FOLLOWING INFORMATION?
• The price of dishwash is set as follows :
– Dishwash Powder : Rs 1
– Dishwash Bar : Rs 2
• 8 people eat their meals on Banana Leaves
• Out of the 12 people who have utensils, 2 people
are below the poverty line – cannot spend on
dishwash.
• 20% of the population can afford to spend more
than Re. 1 for dishwash.
SEE HOW THE KEYWORDS ARE IN FACT
THE 4Ps
WANT – Product
AFFORD – Price
ACCESS – Place
AWARE – Promotion
Now let’s revisit the market potential thing we
were doing… with some information.
TOTAL MARKET POTENTIAL = Rs 12
Dishwash Bar
Dishwash Powder
2 * 2 = Rs 4
8 * 1 = Rs 8
No Market for Dishwash
BUT THIS IS NOT THE SAME AS MARKET SIZE! MARKET
POTENTIAL IS ‘What it can be’ and MARKET SIZE IS ‘What
it is’
WHAT IS THE MARKET SIZE? (ASSUME COMPANIES HAVE
STARTED DISTRIBUTING AND USERS HAVE STARTED USING)
This guy
doesn’t
want to
buy dish
wash
This guy shops from a
modern retail store – the
companies do not distribute
there
This guy watches
only ESPN
This guy
thinks dish
wash is too
expensive
Market size is Rs 7. Hope you worked it out!
MARKET SHARE – SAME MODEL
% MARKET
WHO
WANT
YOUR
PRODUCT
×
% PEOPLE
WHICH CAN
AFFORD / SEE
VALUE IN
YOUR
PRODUCT
×
% PEOPLE
WHO HAVE
ACCESS TO
YOUR
PRODUCT
×
% PEOPLE
WHO ARE
AWARE OF
YOUR
PRODUCT
MS = Product * Price * Place * Promotion
THE 4P MODEL IS THE ANSWER TO ALL OF
LIFE’s PROBLEMS –
(AT LEAST THE MARKETING ONES)
CASE (interview/GD questions)
A product X is not doing well in the market. How
will find out what is wrong?
Answer : 4 P Analysis
A Product Y has low market share – how will you
gain market share?
Answer : 4 P Analysis
A Product Z was launched and failed – what could
be the problem and how will you solve it?
• Answer : 4 P Analysis
WHAT YOU NEED TO THINK
• PRODUCT :
– Is it in line with the consumer insight
– Is the quality right
– Are the functional/ Emotional Benefits relevant to consumer
• PRICE
– Is it too expensive
– Is it PERCEIVED to be expensive/cheap
• PLACE
– Is it available
– Is it Visible where available
• PROMOTION
– Does the communication convey the right message
– Does the communication ride the proper channels
– Does communication influence purchase
YOUR THOUGHTS - WHAT WENT WRONG?
(WHICH P MIGHT BE AT FAULT? )
YOUR THOUGHTS – WHICH P HAS
MAXIMUM ROLE TO GROW/TAP
MARKET
WHAT STRATEGY FOR WHAT PRODUCT
CATEGORY ?
• Anyone fond of 2 by 2s ?
NOW BACK TO THE LITTLE VILLAGE
WHERE WE ARE SELLING DISHWASH
• Assume we have a market share of 0% in Bars and 25% in POWDERS (We
are the blue ones)
• What is our overall market share?
– Rs 2 out of Rs 12 market = 17% share
• WHAT SHOULD BE OUR GROWTH STRATEGY?
Answer : Steal Market Share
Question : How ?
UNDERSTAND CONSUMERS BETTER –
TWEAK 4Ps - STEAL MARKET SHARE
• CASE :
– Insights Gathered – What should you do in each
case ?
• Market Survey Revealed that only 5/10 people could
recall our advertisement.
• Our RPI is 140 in dishwash bar segment (RELATIVE
PRICE INDEX IS (OUR PRICE*100/AVERAGE PRICE OF
CATEGORY)
• Out of 100 retail outlets, we are servicing 40 outlets.
• Our competitor powder is offering Lemon Fragrance.
LET US SAY THAT OUR AWESOME UNDERSTANDING OF 4Ps HAS
HELPED US WIN 100% MARKET SHARE IN BARS and a 75% SHARE
IN POWDERS.
• We are now a Rs 10 business. How do we
grow now ?
• MARKET DEVELOPMENT IMPORTANT NOTES :
– Should be done by Market Leader to reap
disproportionate results
– Can be done in three ways:
• More Users
• More Usage
• Trading Up (format change)
– Market Development Is focused on Behavior
Change.
MARKET SIZE = How many people Use the product Format
* How much they use in on usage occasions * Number
of Usage Occasions.
Can I make
these
people Use
Dishwash
Liquid?
Rs 3 per
unit
Can I make
these
people use
dishwash
Bars?
Can I make these
people Use Powder
rather than Ash?
Can I Make these
people Wash their
Kitchen Sink with
powder as well?
Can I make these
people use utensils
instead of Banana
Leaves?
Market Share Gain or Market
Development? If MD then what type –
MORE USERS? MORE USAGE ?
TRADING UP ? Identify :
THE BOTTOM LINE
A SINGLE APPROACH IS UNIVERSAL IN CRACKING
GDs and INTERVIEW QUESTIONS :
STP  4P ANALYSIS