Reference no: EM13998620

GoodBite is interested in selling a new form of teeth whitening strips. They dissolve in your mouth and leave less of a gunky residue feeling than current competitors’ products do.  White strips seem to appeal to people 20–29 years old. Competitors’ data on existing strips suggest they appeal to women slightly more than men, but, for the moment, GoodBite is not planning on differentiating on gender in the advertising. So let’s ignore gender and just consider that 20–29 year old age category. Say the U.S. population is 301 mm, with 41.1 mm in the target age bracket. About 7.5 mm people have tried competitors’ white strips (GoodBite isn’t on the market yet), and roughly 3 mm of them are semi-serious, frequent users. GoodBite is trying to guesstimate the size of its target market and its likely profitability. The GoodBite product is sold in packages of 14 sets of strips (each set is an upper and lower pair) in each box.  GoodBite isn’t sure of the frequency with which a typi cal purchaser will buy a set yet because the product category is still relatively new. However, they reason that an upper bound would be about 26 boxes bought by a consumer a year (52 weeks in the year, divided by the two weeks’ supply that is sold in each box). A more conservative estimate would halve that (13 boxes; roughly one bought each month). A more con- servative estimate still would be that a customer buys “a few” (two or three) boxes a year. GoodBite expects to charge $25 per box.

Should they launch GoodBites? What assumptions were made that might be revisited?