Product Management — Guesstimates | The number of pizzas Dominos deliver in India in a day
Guesstimate problems are one of the most frequently asked questions in a Product Management interview. These questions are designed to test the interviewee’s quantitative and analytical skills and to understand if they can reach a workable solution in a time-bound manner.
In this article, we are going to approach one such question —
How many pizzas does Dominos deliver in India every day?
(Before jumping onto mental calculations or slipping into panic mode, it’s necessary to take a minute and think about the structure of the problem and make sure we comprehend what’s asked)
As we think more about the problem, it’s only natural that we would want to start by asking a few clarifying questions —
- As the demand for ordering food from outside has been affected by Covid, which period are we considering?
[Re: Let’s consider pre-covid times]
2. As the demand for Pizza is affected by occasional sales and offers like BOGO, should we consider such offers?
[Re: Let’s consider a normal operational day with no offers]
3. Are we considering any particular size of Pizza?
[Re: No]
4. Are we also considering deliveries made by Dominos through food delivering apps like Swiggy and Zomato?
[Re: Yes]
(Now that we have the answers to our questions, the next step is to choose the structure or flow of the guesstimate exercise. For this example, we are following a Top-Down approach)
- The population of India — 1.3 bn
- Considering Dominos only operates in urban cities, it is accessible to 30% of the total population of India — 400mn
- Considering only the population between the age of 20–60 years consume pizza, it makes up to 70% of the urban population ~ 300mn
- Considering the likeliness to order Pizza to be dependent on the earnings of the individual, the split would be -
Unemployed (10% population = 30mn) — 0 pizzas/day
< INR 100,000 per annum (50% population = 150mn) -> 1 in 500–300k pizzas/day
100,000–500,000 (20% population = 90mn) -> 1 in 400–200k pizzas/day
500,000 + (20% population = 90mn) -> 1 in 300–300k pizzas/day
Total Pizza consumption — 800k pizzas/day
Assumption— There is 1 pizza in each order
Considering the Split between Online and Dineout to be 3:2
Pizzas delivered in India in a day= 500,000
Considering Dominos has a 20% share of the overall Pizza market,
Pizzas delivered by Dominos in a day in India = 100,000
P.S. We could increase the pizzas in an order to 1.5 or 2 to adjust for special discount days.
