Estimation question

How do you go about calculating the TAM, SAM and Target Market for the food tech industry?

Practice this question out loud. An AI interviewer asks it, follows up like a real interviewer would, and scores your answer. Type or speak.

What this question tests

Tests structured market-sizing methodology with clear definitions and labeled assumptions for a specific industry.

Define TAM as total spend on food, restaurant, grocery and delivery, in the relevant geography, stated as an assumption-based figure.
Define SAM as the portion of that spend transacted through digital or tech-enabled channels, a much smaller slice, assume roughly 5-10% of TAM given current digital penetration.
Define the target market as the realistic share a specific company could capture given competition, for example 2-5% of SAM in addressable cities within a few years.
Show the funnel explicitly, TAM to SAM to target, each with a stated narrowing assumption, not three unconnected numbers.
State clearly these are illustrative, assumption-driven figures for structure, not precise market research.

Keeps the three layers clearly nested, each a subset of the previous, with stated narrowing assumptions, rather than three independent guesses.
Explicitly separates food tech, digital-enabled spend, from total food spend, the key definitional distinction the question tests.
Presents a clear, followable funnel rather than isolated numbers.

Treating TAM, SAM and target market as unrelated numbers instead of a nested funnel.
Conflating total food spend with food-tech-addressable spend, missing the digital-penetration narrowing step.

What data would you use to validate your digital-penetration assumption for SAM?
How would this breakdown differ for a mature market like the US versus an emerging market?