Lumen Learning: This Market Size Looks Too Big
Consulting
medium35 min0 submissionsBain
Scenario
A junior consultant has sized the annual replacement market for a household appliance in India. The number is being used to justify a ₹148 Cr capacity investment.
Their working, verbatim
Population is 133m. Average household size is 5, so there are about 27m households.
Penetration of this appliance is 32%.
Appliances are replaced every 4 years.
So annual replacement demand = 133m × 32% ÷ 4 = 10.6m units per year.
At ₹4443 per unit, that is a market of roughly ₹4,727 Cr a year.
The partner has asked you to check it before it goes in the deck.
Supporting data
derived hints
- corrected units m
- 2.2
- overstatement multiple
- 4.9
stated working
- households m
- 27
- population m
- 133
- household size
- 5
- price per unit
- 4443
- stated units m
- 10.6
- penetration pct
- 32
- replacement years
- 4
Your task
Check the estimate. Your answer should provide:
- Analysis — find the error and quantify how much it distorts the answer.
- Risks — what depends on this number being right.
- Recommendation — the corrected size, computed, and how you would sanity-check it.
State any assumptions you make.
Ready to move forward? Up next: Marlow Chemicals: Pressure-Test This RecommendationNext question
How you'll be graded
100 points, 60% to pass.
- explanation20
- residual review15
- error identification35
- quantitative correction30
Hint
Reveal suggested structure
Unit consistency; households vs individuals; recompute; sanity-check against a known anchor