How would you estimate the size of the annual U.S. chewing gum market? Check your answer for reasonableness.
A typical approach:
Estimate the number of people who chew gum: of the 300 million population, 15% are between the ages of 10 and 20, the heaviest users, for a total of 45 million. Estimate that these people chew two packs per week, for annual sales of 4,500 million packs. For the other users over age 20, (70% of the 300 million population, or 210 million) estimate a usage rate of one half pack per week, for a total of 5,250 packs per year. Total packs per year is 9,750.
To check for reasonableness, figure the dollar sales that these packs represent: at 25 cents per pack, annual sales would be $2.4 billion, a reasonable figure.
FRENCH PIZZA MARKET
Pizza Hut has recently entered the home pizza delivery business in Paris. The market for home delivery is currently dominated by Spizza Pizza. Pizza Hut has asked your consulting firm to help it analyze issues that will determine its likelihood of success in the Parisian Pizza market. First, what information would you need and second, how would you analyze the pizza delivery market?
Possible Information Needs:
An estimate of the size of the Parisian home pizza delivery market. This could be obtained by knowing the population of Paris (6 million) and making some educated guesses about factors that determine pizza market size.
You may also want to know the size of Spizza, the current competitor, including sales, number of stores, and proportion of Paris that is currently served by Spizza.
Other useful information: market segments targeted and served by Spizza; market segments that are neglected by Spizza; what type of product do they offer; what do they charge for their product; what is the cost structure of their business and what products are most profitable.
Method of analysis:
The best method of analysis would start by determining if any part of the...