Student Test Prep Market - GMAT
The market for GMAT test prep services in Austin is estimated to be worth $483,363 based on the most recent data available. The methodology and assumptions for this estimation and other findings are detailed below.
Despite extensive searching, I was not able to find pre-existing sources on the market size of the GMAT test prep market that is freely available. However, I was able to triangulate an estimated market size based on the available information. This estimation is based on the number of GMAT candidates in Texas and the population statistics of Austin.
According to IBISWorld, the US test prep industry was worth $328 million in 2016. A study conducted Research and Markets predicts that the market will grow at a CAGR of 5.51% during 2017-2021. One of the primary drivers for the test prep market is the increase in enrollment of graduates in the US. This is in direct proportion to the increase in the number of standardized test takers. In addition, "the growing importance of standardized test scores has compelled many students to opt for test preparation services in the US."
gmat test prep market in austin
1. The age breakdown of students that take the GMAT exam is as follows: (the latest data available was from 2015)
-Younger than 25: 38.2%
-40 and older: 6.2%
For the purposes of the triangulation, it is assumed that GMAT test prep would not be pursued by anyone younger than 19, as they have not graduated from university, or older than 65 as it is not the norm. Hence, the age range considered will be 19-65.
3. In 2017, 9.467 total Texas residents sat for the GMAT. Based on the 18-64 population data (point 2), an estimate for the number of GMAT students in Austin can be made as follows.
The % GMAT students in Texas aged 18-64 =9467/16,554,900*100
By applying the percentage calculated above, the number of GMAT students in Austin aged 19-64 will be
4. There was no recent information available (that are not behind paywalls) which shows the percentage of GMAT students that take test prep services. However, it was found from an older source (2010) that approximately 50% of GMAT students opt for test prep courses. (online or in person)
4. The course fee for GMAT test prep offered by Kaplan in Austin (searched by zip code) ranges from $1,049-$1,449. Based on this information, the average course fee for GMAT test prep in Austin is calculated as $1,249 ($1,049+$1,449/2)
Based on the above findings, the market size of GMAT test prep services in Austin can be estimated as follows:
Market size=Number of GMAT students in Austin*average GMAT prep course fee* % of students that take GMAT prep
According to GMAC, there has been a declining trend in the graduate management applications in the US. According to the report, this decline in domestic demand is due to the tightened US labor market with unemployment levels at pre-recessionary levels. It further states that the recent political events in the country may have played a role in the drop in international candidates applying to US programs. This may explain the discrepancy between the initial estimate of 11,000 GMAT candidates in Texas (client comment), and the actual findings of only 9467 in 2017.
Based on the available information, the estimated market size of the GMAT test prep services in Austin is worth $483,363. Based on research conducted by GMAC, the governing body of GMAT exams, there has been a decline in the industry during the recent years as a result of tightening labor market and possibly also the political situation in the country.