The introduction of a new product

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Reference no: EM13660336

Executives of Coca-Cola are considering the introduction of a new product - Rum&Coke. Rum&Coke would be targeted to medium and high income (>$40,000) men and women ages 21 to 60. The product would be positioned as a fun, fast, premium, adult beverage. To better understand the market potential of this product, Coke conducted a test market. The test market data combined with other data indicate the following facts:

• Of the men and women who drink alcoholic beverages, 15% of men and 10% of women will try this new beverage over a two-year period (assume this the trial rate is divided equally across years).

25% of men and 10% of women who try the product will become repeat buyers
There are 60,000,000 men in the U.S. ages 21-60.
There are 65,000,000 women in the U.S. ages 21-60.
50% of men and 30% of women drink alcoholic beverages
Of men and women who drink, 30% of men and 10% of women earn >$40,000

Coke planned to offer Rum&Coke in a 4-pack package with a retail price of $10.00. Coke knew from experience that, on average, anyone interested in trying the product would buy a total of 2 packages. Repeat buyers would ultimately buy an average of 10 packages per year. Based on the information provided, estimate the target market size and retail sales for this new product over a 2 year period.

Reference no: EM13660336

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