Interview Case # 3 : Diapers Market

Estimate the size of the disposable diaper market.

Case Question :

Estimate the size of the disposable diaper market.

Solution

As with other market sizing questions, there are many ways to reach an estimate. The important thing is to use reasonable assumptions, talk through the solution logically, and strike the right balance between detail and rough estimations. Here is an example solution which assumes that the interviewer does not want to spend too much time on this question.

First, I will assume that there are 350 million Americans. I’m going to further assume that the average life expectancy of an American is 80 years. I’m also going to assume that there are even numbers of people in each age group. And that there are exactly same numbers of 8-year-olds as 68-year-olds.

You divide 350 million by 80 and you get about 4.4 million people per age group. Children wear diapers from ago zero to 3 so that’s 13.2 million kids wearing diapers. So, we’ll round it off to 13 million kids. You said disposable diapers. So, I’ll estimate that 90 percent of children wear disposable diapers, as they are more convenient for parents than reusable ones. So now we’re talking 12 million children wearing 5 diapers a day. That’s 60 million diapers a day times 365 equals approximately 22 billion diapers a year.