According to the Case of Drinkworks: Home Bar by Keurig

https://hbsp.harvard.edu/product/521010-PDF-ENG

Q3 (b) Q3b.Now, you will estimate the size of the target market.Gather the following information: (1) Number of U.S. households, (2) percentage of household who consume alcohol, (3) Sum of the proportions of the segments (from Exhibit 1) that you decided to target.

Target Market size is =Numbers of households in the US*Percentage of household that consume alcohol*Sum of the share of target segments selected

Read through the following Notes to see the approach for computation of target market size.

Many marketing decisions require an estimation of target market size."Decomposition into parts" is a practical approach to estimate market size or demand.In this case, the computation can be done in steps and it begins with the number of all buyers/consumers in the market (Let us call thisTotal market).Then multiply the Total Market by percentage of household that consume alcohol in a given time period to arrive at an estimate ofPotential Market.If you have 120.5 million households (from page 5 of the case) and 59% of them consumer alcohol every month (from page 5 of the case) , the potential market is 120.5 * 0.59 = 71.05 million household.

No business can target 100% of the potential market.Many businesses chose to target one or two segments for a specific product/model.In this case, it makes sense to target party hosts (as an executive suggests in the case) andYOU NEED to select the segments(from the Six segments in Exhibit 1) that you feel are good targets.If you selected Weekly "Drinker + Hosts" (Younger Demo) only, then you are targeting 21% of the potential market and your target market size will be 71.05 * 0.21 = 14.9 million household or round up to 15 million.If you selected two segment- "Drinker + Hosts" (Younger Demo) and Weekly "Drinker + Hosts" (Older Demo) - the sum of the share of these two segments will be 21% + 13% = 34%.Your market size will depend on the number of segments selected and which segments are selected.It is your decision as stated in Q3a.After receiving everyone's input, we will decide on target to proceed with future decisions.