Assignment 2: Market Size

a) The most used approach to market sizing is based on finding answers to 4 main questions.
First, one should find the last official population size of the analyzed country. Secondly, when
researching the market size of a country, companies should estimate the number of potential
customers, or in other words, the number of citizens who find the companys product relevant
for them. Furthermore, out of all the potential customers, it is important to know the number
of purchases of similar products. Lastly, for approximating the market size of a product
category, the number of purchases per year by an average customer should be calculated or
approximated. Only by finding all of these numbers, it is possible to estimate the market size
of a certain product.
b) Starting from the same method explained above, when coming up with the French market size
of school bags, especially bought by/for primary school students, one should find the relevant
numbers for the same 4 questions. First, the number of French inhabitants in France is
approximately equal to 66 million people. Out of the total number of French population, it is
approximated by the National Institute of Statistics and Economic Studies (INSEE) that there
are approximately 4 million female citizens with the age between 5 and 14 and approximately
3.7 million of male inhabitants in the same age structure. Because the primary education starts
at the age of 6 and ends when the students are 11 years old, the added number of 7.7 million
can be decreased to approximately 6 million students because the 7.7 million number includes
students of preparatory school (5-year-old children), as well as pupils that already started the
secondary school (from 11-year-old children). Furthermore, it is appropriate to consider that
the majority of children from these age category attend the primary school in France because
the attendance rates of pupils in France are over 98 percent, according to World Bank Data.
When answering the question regarding the estimation of potential customers, it would be
logical to consider the chance of Kiddibag to capture a 15 percent of the French market share,
which is an accomplishment achieved in Germany already. Consequently, a 15 percent market
share out of 6 million students is equal to 900.000 purchased Kiddibags. Finally, after the
number of potential customers is approximated, it is easy to forecast the potential sales.
According to these calculations, if Kiddibag captures a 15 percent of the French school bags
market, and if their bags cost 40 Euro for instance, then their estimated profits would be equal
to 36 million Euro (40 x 900.000 = 36.000.000 ). These estimates include the fact that the
products are of high-quality materials and that they age with the customers, meaning that there
is one purchased bag per customer.

http://www.indexmundi.com/france/age_structure.html
http://www.nationmaster.com/country-info/profiles/France/Education/All-stats
http://www.insee.fr/fr/themes/tableau.asp?reg_id=0&ref_id=NATnon02150