Oh Baby Forecasting Assignment

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Oh Baby Forecasting Assignment As a marketing analyst for Proctor & Gamble’s personal care division (manufacturer of Pampers diapers among other things), you have developed the following data for the US market. From this information you should: 1. Estimate the market sales potential (industry potential) for disposable diapers for 2011. 2. Determine the sales potential for P&G’s Sesame Street Pampers in this market in units and in dollars for 2011. 3. Determine the sales forecast (units and dollars) for Sesame Street Pampers for 2011. 4. Estimate how much profit P&G can expect to generate in 2011 from Sesame Street Pampers 5. Estimate Sesame Street Pampers’ market share in 2011. The market for disposable diapers is generally considered mothers between the ages of 18 to 45 that select the diaper. (There are other institutional segments such as hospitals, businesses, and daycare facilities.) A baby averages 5 diapers per day for 30 months. About 90% of mothers use disposable diapers. This number of mothers using disposable diapers is expected to fall about .5% annually over the next 3 years. Number of US Births 2006 3,959,400 2007 4,058,800 2008 4,025,900 2009 4,021,700 2010 4,089,950 P&G’s focus group research in Cincinnati and Topeka suggests that 15% of mothers using disposable diapers would try Sesame Street Pampers. Sesame Street Pampers are expected to sell on the premium end of the market. Retail prices for disposable diapers range from $.25 to $.40 each. This is a very profitable category for retailers as they generally take a 50-60% margin. Disposable diaper manufacturers generally make about a 40% margin. P&G has capacity to produce about 5 million Sesame Street Pampers per year. 5 diapers/day x 365 days/year x 2.5 years = 4572.5 per baby over their “babyhood” but we are only

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