You are the New Product Manager and are evaluating two new products. In the first product the PIC says that you must have a profit of $750,000 after year to continue. For the second idea, Management wants a share of 9 points by the end of the first year. Should either or both of these products be considered for continuation? Show all work. Why is forecasting so important and when should you do it and why?


Product 1:

You have estimated your overall market size of 2.5 million potential customers. You estimate that 52% of the people are aware of the product and 18% will try it. However the product is only available to 35% of those potential customers due to distribution limitations and each customer will only buy 1 unit a year. We have calculated that the cost for product of each unit is $11.00 and we will sell the unit for $19.95 What do you estimate the profit to be and will management agree to move this product forward at this stage.


Product 2:

For product two, you estimate that the current market is 5.5 million. Your estimate for the percent of customers aware of a potential product to be 80% and the product will only be available in 60% of your stores. The trial rate only runs at 18% which is lower than you had hoped. You also expect that because of the changes of this model over the older model that 65% of your customers will switch to the new product and you will have a repeat buy of 50%.

Answer rating: 100% (QA)

Product 1 The estimated profit for this product is 4500000 This is based on the estimated market siz... View the full answer