MKT101 Principles of Marketing
Task:
Questions
1.Looking at the market segment profiles, which segment would you target? Note: Assume you only have the resources to target one of the segments for now. Explain your reasoning.
2.Calculate the market potential for the product in terms of units sold. To do this, you will have to make some decisions about targeting of segment(s), what numbers to use, etc. Please clearly explain your reasoning and your calculations. Note: At the end, you should have an estimated value that you believe reasonably characterizes the market potential for your product.
3.What are the fixed costs? Note: Fixed costs are those that remain the same regardless of how many units are produced.
4.What are the variable costs per unit produced? Note: Variable costs are those that depend on the number of units produced.
5.What is the break even quantity for the product? What is the break even revenue? Show your calculations. Assume that you will be selling the product primarily through a retailer.
6.Given your c, do you believe that moving forward with bringing the product to market is a good decision? Explain.
7.You’ve always dreamed of making your first million dollars. Calculate the number of units you need to sell to make $1,000,000 in profit.
Stretch Question
8.Imagine that you’ve been offered deals by two of the Piranhas. One piranha, named Mark Dominican, offers you an investment of $100,000 in exchange for 20% ownership of your company. Another piranha, named Daymond Jim, has offered you $100,000 in exchange for a $1 royalty paid to him for each unit sold for the life of the product.
Which offer would you choose? Explain.
Did your market potential and break-even calculations influence this decision? Explain why or why not.
