Background and an Invitation to the "Piranha Pen"Imagine that you have developed a new dog leash and harness called "2Chainz". The product features a unique double helix, chain-like structure made out of nylon that helps prevent dogs from pulling their owner during walks. You also recently received an invitation to present "2Chainz" on an episode of a television show called "Piranha Pen". The show gives entrepreneurs the opportunity to pitch their products to a panel of wealthy businesspeople (aka "Piranhas") in the hopes of landing an investment deal. The Piranhas are known to be savvy negotiators and are famous for asking tough questions and having high standards before making an investment. Therefore, it is critical that you be well-prepared. In preparation for the show, you pull together the following data from a variety of sources. Market Research DataSegment ProfilesYou obtain a market research report profiling the different segments of dog owners in the United States. The report suggests that there are approximately 40 million households in the U. S. that own dogs and they typically fall into one of four segments: (1) Guard Dog, (2) Child Substitute, (3) Family Dog, and (4) Golden Years Counterpart. Table 1 provides a general profile of each segment as well as the estimated proportion of dog owning households that fall into each category. Segment NameGuardDogChild SubstituteFamily DogGolden Years CounterpartMotivation for having a dogFor protectionWatchdogDog serves as a replacement for a childDog as a playmate for kidsKeep active/activity partnerAvoiding Household incomeAges 25-45HighhouseholdincomeAges 25 -35Middle household incomeAges 30 -45High household incomeAges 50 -65Attachment/AttentionLess attachedHighly attachedHigh level of attention to dogMedium attachmentLower attention to dogMedium/High attachmentHigh level of attention to dog Type of DogLarge dogLives outdoorsSmall dogLives indoorsMedium to large dogMedium to large dog% of Households in the U. S. Owning a Dog in this Segment25%20%30%25%Pricing SurveyYou paid a market research firm to conduct a nationally representative survey of 700 dog owners during which they were shown a 2Chainz prototype and asked how likely they would be to purchase it. Approximately 30% of those surveyed indicated that they would purchase the product from a retail store at your planned price of $45. Dog Behavior SurveyYou also discovered a national survey by a dog training organization called the American Association of Dog Whisperers. The survey suggests that pulling on a leash is one of the most commonly reported behavioral problems reported by dog owners, with about 65% of dog owners nationwide reporting that pulling on a leash is a problem they have experienced. And, about half of the dog owners that reported leash pulling also stated that they had not yet found a solution to
1 Calculate the market potential for the product in terms of units sold. Enter the number you've calculated in the space provided below.
2 In the previous question, you calculated market potential for the product in terms of units sold. In the space below, please explain your calculation and the reasoning behind it.