True Earth Case

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TruEarth Healthy Foods: Market Research for a New Product Introduction

Forecast units and value Truearth Pizza| |
 | | |
Target Households| 58,80 | values x 1 million|
 | | |
Section| Non customer| Customer|
Trial customer| 89%| 11%|
Number of Households| 52,332| 6,468|
Definitely 'would buy' | 15%| 26%|
Actually definitely 'would buy' (x 80%)| 12%| 21%|
Probably would buy| 39%| 53%|
Actually probably 'would buy' (x 30%)| 12%| 16%|
Total trial Rate| 24%| 37%|
Customer Awareness| 12%| 50%|
ACV Distribution| 40%| 40%|
Adjusted Trial Rate| 1%| 7%|
Trial Purchases Volume| 0,595| 0,475|
 | | |
Repeat Purchases| | |
Repeat Purchase Occasions| 2| 2|
Repeat Rate| 49%| 49%|
Repeat Purchases Volume| 0,583| 0,465|
 | | |
Total Volume (Trial Purch. + Repeat Purch.)| 1,179| 0,940| Price per unit | 12,38$| 12,38$|
Total Revenue| 14,593$| 11,637$|
 | | |
Revenue Non Consumer| 14,593$| |
Revenue Consumer| 11,637$|  |
Total Revenue | 26,230$| |
Gross Margin (100% -35%= 65%)| 17,05$| |
Return Requirements| 12,00$| -/-|
Margin| 5,05$| |
Question 1A: To answer this question, the number and value of the units are calculated, like the method used by the Pasta (Exhibit 5) showed below.

As you can see in the table showed above is the forecast of the total number of units 1,179 + 0,940 = 2,119 million units. The total value of this demand is $ 26,230 million. These values are based on the assumption that it is a excellent product with a market penetration of 11%.

Question 1B: The forecast shown in Table B is based on assumptions. By launching a product it is better to look to the demand of the product in different ways. So looking to the results of different assumptions. In the table below is the sensitivity analysis of the pizza shown.

Margin by different penetration and scenario| Mediocre Product (21%)| Average...
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