Case Statement:
Your client is a manufacturer of menstrual cups in India. They are a new player, and they have hired you to estimate the market size of the product and recommend a pricing strategy for the product.
C : Sure. First, I would like to get some clarity on the usage of the product and its frequency of use.
I : Okay. So, this product is a silicon cup, which is used by women during their monthly cycle. Once it collects the discharge, you need to take it out, wash and then sterilize. This is a reusable product.
C : Alright. As I understand, currently, majority women use sanitary pads for this purpose. Apart from this, are there any other products in use? What is the value proposition of our product over the pads?
I : You are right. Most of the women use sanitary pads. However, menstrual cups are healthier and more hygienic, comfortable, and most importantly it is reusable.
C : Understood. Do we have any information on the frequency of use and the number of products used per year? What is the life of a single cup?
I : So, the frequency of use is obviously monthly. Life of a single up is 1 year. However, each women is advised to carry 2 cups at a point on time. One will be in use, and an additional one is kept in the sterilizer.
C : Sure. I would like to start with calculating the market size and attractiveness, and then move onto the financial feasibility where I would see the pricing of the product.
I : Sure.
C : I will structure the market sizing in the following manner. I would take the entire population of the country and segregate basis the gender (taking only males and females for simplicity). Our target segment will be the females. Further, I would like to divide it further based on age groups. Here I would like to make an assumption that the age group where women have active menstrual cycle is 16-45 years.
I : Okay makes sense. What else?
C : Further, I would consider 2 segments in the target age group – Urban and Rural. Since the awareness and usage of such products is very different in these 2 areas, this approach will help us calculate the number in an accurate manner
I : Go on. What are the major differences in these 2 areas?
C : There are 3 major points of differences where the urban and rural areas are different: Awareness, Availability and Adoption. Rural areas have lower adoption and awareness so the market size from this segment will be lower than its urban counterpart.
I : Good. This makes sense. We can move onto the financial feasibility part now. How will you analyze this and what data would you need for this?
C : Okay. I would like to know the current spending done on this. As the women are using pads currently, how many pads per year does a woman require?
I : Lets say each woman requires 10 pads per month and each pad costs Rs. 2.
C : For pricing strategy, we have 3 major approaches: Cost based approach, competitor based approach and value based approach.
I : I would like you to focus on comparing the product with the pads only. How would you decide to price the product with respect to that?
C : Okay, so, the net annual spending on pads will come out to be Rs. 240. The price of 2 cups can be less than this or more than this. However, since the product provides more value to the consumer in terms of comfort and hygiene, I would like to consider pricing the product a bit on the higher side.
I : How will that impact your market size if the new product is more expensive than the current pads they use?
C : In that case we will also have to consider the income segments of the final target groups and then come up with the people who would find the product affordable
I : Okay. What will happen in case we price it lower than the pads?
C : Then I would like to see the willingness to switch to new product given that the consumers are comfortable using their current pads.
I : Good. We can end the discussion here. Thank you.
Background Information:
Currently, women use pads.
Menstrual cups is more hygienic, comfortable, and reusable.
Need to stock at least 2 units at a point in time.
Case Tips:
Considering rural and urban split is important since usage is very different.
Brownie points for mentioning willingness to switch in case the product is cheaper than the pads
