You have been promoted to the Vice President of Marketing for (fictitious) Acme Pet Food. Acme sells

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Question:

You have been promoted to the Vice President of Marketing for (fictitious) Acme Pet Food. Acme sells to pet lovers in the United States. You desire to estimate the market size for pet food in America, so you assemble the data shown in the tables below. Tables include demographic information, analyst information, and pet ownership information. (Values in the table have been modified from actual values to simplify the calculations). For the case study, please only use the values shown below.

Data: Demographics; United States Census Bureau

Number of people in the United States (U.S. Census Bureau): 310 million

Americans aged 0-14 (U.S. Census Bureau): 61 million

Americans aged 15-24 (U.S. Census Bureau): 44 million

Americans aged 25-29 (U.S. Census Bureau): 21 million

Americans aged 30-34 (U.S. Census Bureau): 20 million

Americans aged 35-39 (U.S. Census Bureau): 20 million

Americans aged 40-44 (U.S. Census Bureau): 21 million

Americans aged 45-49 (U.S. Census Bureau): 23 million

Americans aged 50-54 (U.S. Census Bureau): 22 million

Americans aged 55-59 (U.S. Census Bureau): 20 million

Americans aged 60-64 (U.S. Census Bureau): 17 million

Americans aged 65-74 (U.S. Census Bureau) : 21 million

Americans aged 75-99 (U.S. Census Bureau): 18 million

Data: Analyst Report Data; Spending by Segment

Percentage of Americans who own pets (FranchiseHelp.com): 62%

Money spent on pet food in United States (APPA.org): $13.7 billion

Total revenue generated by pet stores (IBISWorld.com): $15.7 billion

Average amount spent on pet food per person per year (ASPCA.org): $107.22

Amount of spending on pet food vs. all pet spending (IBISWorld.com): 52%

Pet food spending by segment: Consumers aged 0-24 (modified data): $50

Pet food spending by segment: Consumers aged 25-34 (modified data): $80

Pet food spending by segment: Consumers aged 35-44 (modified data): $90

Pet food spending by segment: Consumers aged 45-54 (modified data): $110

Pet food spending by segment: Consumers aged 55-64 (modified data): $120

Pet food spending by segment: Consumers aged 65-74 (modified data): $110

Pet food spending by segment: Consumers aged 75-99 (modified data): $50

Data: Pet Ownership

Percentage of Americans who own dogs (AVMA.org): 36.5%

Percentage of Americans who own cats (AVMA.org): 30.4%

Percentage of Americans who own birds (AVMA.org): 3.1%

Percentage of Americans who own fish (AVMA.org): 2.5%

Percentage of Americans who own rabbits (AVMA.org): 0.7%

Percentage of Americans who own guinea pigs (AVMA.org): 0.3%

Spending by segment: Annual pet food costs: dogs (ASPCA.org): $137

Spending by segment: Annual pet food costs: cats (ASPCA.org): $115

Spending by segment: Annual pet food costs: birds (ASPCA.org): $75

Spending by segment: Annual pet food costs: fish (ASPCA.org): $20

Spending by segment: Annual pet food costs: rabbits (ASPCA.org): $190

Spending by segment: Annual pet food costs: guinea pigs (ASPCA.org): $105

Calculation Questions:

Note that a limited number of options (a, b, c, d) are given to help guide you, in that one of the options is the correct answer.

1.Estimate the size of the U.S. pet food market using available industry analyst reports.

a.316 million

b.$13.7 billion

c.$15.7 billion

d.$107.22

2.Estimate the size of the U.S. pet food market using top-down estimation methods.

a.$13.7 billion

b.$15.7 billion

c.$20.6 billion

d.$24.8 billion

3.Estimate the size of the U.S. pet food market using bottom-up estimation methods, applying segmentation based on demographics, in this case, age of pet owner. Note that estimates with bottom-up methods often result in higher values than those for top-down methods.

a.$13.7 billion

b.$15.7 billion

c $20.6 billion

d.$24.8 billion

4.Estimate the size of the U.S. pet food market using bottom-up estimation methods, applying segmentation based on pet ownership (dog owners, cat owners, bird owners, etc.).

a.$13.7 billion

b.$27.8 billion

c.$86.9 billion

d.$133.8 billion

5.Estimate the overall size of the U.S. pet food market by triangulating (aggregating) the sizes found with the analyst report, top-down, and bottom-up methods. Use weighting factors of 70% for the analyst report, 10% for the top-down estimate, 10% for the demographics-based bottom-up estimate, and 10% for the pet ownership-based bottom-up estimate.

a.$13.7 billion

b.$17.0 billion

c $27.8 billion

d.$133.8 billion