Both Singh and Jain were confident that sales of Muscle-RDX would quickly take off once health coaches and high-endurance athletes understood the value proposition of the new supplement. Singh expected Jain to use his experience with past product launches, along with the marketing research conducted by Strength Pharma, to provide guidance on expected unit volumes for Muscle-RDX in the first five years of sales.

Jain decided to project demand using three different approaches, which were based on varying assumptions of how potential users would respond to Muscle-RDX. The first approach forecasted demand by looking at the number of athletes in India and narrowing the group to athletes who participated in high-endurance sports (37 per cent of all athletes, as per the Strength Pharma study). He felt this pool should be narrowed to focus on the 25 per cent of athletes who were comfortable with sports supplements (see Exhibits 3 and 4). Jains experience had taught him that Muscle-RDX was likely to capture 15 per cent of these consumers in the first year, with 8 per cent growth per year. Also, test trials found that at least 72 per cent of first-time users would purchase a second tub, and 55 per cent of first-time users would continue purchasing Muscle- RDX for a year.

In his second approach, Jain developed a more aggressive forecast, using the results from the Strength Pharma survey that specifically addressed consumer interest in a whey protein-based supplement for high- endurance sports. Again, as a starting point, Jain chose the number of high-endurance-sport athletes in India, but he concentrated the data point on the assumption that 18 per cent of the respondents were ready to switch immediately to Muscle-RDX. He believed that the earlier developed penetration guidelines (which increased by 8 per cent per year) and the 72 per cent/55 per cent model for repeat purchases would also apply.

In his third approach to forecasting, Jain focused on the ideal target consumer: athletes competing in high- endurance sports and residing in urban India (all runners in Tier 1 and 2 cities and 60 per cent of all cyclists in India), older than 18 years of age, and with no major illness. Strength Pharma expected a higher penetration by Muscle-RDX in this ideal target group than in the overall athlete population. Jain estimated that Muscle-RDX would capture 25 per cent of this target market in the first year, with an 8 per cent increase in shares each year. He felt the 72 per cent/55 per cent model for repeat purchase would also apply.

Analyse methods for demand forecasting as mentioned above, if you have to estimate demand how will you do it? what would be your demand forecast for next five years?

Jain knew that his pricing and packaging decisions would have a direct impact on sales forecasts. The different pieces of information began to reveal a broad overview of a strategy for Muscle-RDX, and Jain wanted to carefully analyze each piece of information to provide the best recommendation to Singh.

EXHIBIT 3: DISTRIBUTION OF TARGET POPULATION OF RUNNERS (BY CITY) Tie Examples Total no. of event participa nts No. of citie r Average no. of participants from the local vicinity (60% of total) Total runners (average no. of runners x no. of cities) 133,200 Prospect ive custome rs (15%) S 1 37,000 22,200 6 19,980 Bangalore, Chennai, Delhi, Mumbai, Kolkata, Gurgaon 2 14,000 8,400 17 142,800 21,420 Vadodara, Hyderabad, Pune Lucknow,Rajkot, Surat, Darjeeling 3 2,000 1,200 60 72,000 10,800 Total 348,000 52,200 Sources: Gopal B. Kateshiya, "Rajkot Marathon: 37,000 Participate; Kenyans, Ethiopians Bag Top Prizes," The Indian Express, January 25, 2016, accessed June 12, 2016, http://indianexpress.com/article/cities/ahmedabad/rajkot-marathon- 37000-participate -kenyans-ethiopians-bag-top-prizes/; 14,000 Runners Participate in AirTel Hyderabad Marathon," The Economic Times, August 31, 2015, accessed June 12, 2016, http://articles.economictimes.indiatimes.com/2015-08- 31ews/66070975_1_full- marathon-runners-shriram-life-insurance; 2,000 Participants Run in Amway/Darjeeling Police Marathon," January 15, 2016, accessed June 12, 2016, http://indiablooms.com/ibns_new/sports-details/SN/1543/2000- participants-run-in- amway-darjeeling-police-marathon.html; "India Marathon Calendar," India Running, accessed June 15, 2016, http://indiarunning.com/marathon-calendar.html. EXHIBIT 4: DISTRIBUTION OF TARGET POPULATION OF CYCLISTS (BY EVENT TYPE) Event Type Total no. of Events Average no. of Participan ts Total Athletes (Avg. no. of Participants no. of Events) Prospectiv e Customers (15%) 14 600 Triathlons/Duathl ons 8,400 1,260 50 200 1,500 Racing Randonneur 10,000 750 15 50 113 Total 19,150 2,873 Note: Duathlon is a combination of two events: running and cycling; Randonneur is a long-distance cycling event of 200+ kilometres. Sources: "Duathlons," India Running, accessed June 15, 2016, http://indiarunning.com/duathlons.html; "Cycling Calendar," India Running, accessed June 15, 2016, http://indiarunning.com/triathlons.html. EXHIBIT 3: DISTRIBUTION OF TARGET POPULATION OF RUNNERS (BY CITY) Tie Examples Total no. of event participa nts No. of citie r Average no. of participants from the local vicinity (60% of total) Total runners (average no. of runners x no. of cities) 133,200 Prospect ive custome rs (15%) S 1 37,000 22,200 6 19,980 Bangalore, Chennai, Delhi, Mumbai, Kolkata, Gurgaon 2 14,000 8,400 17 142,800 21,420 Vadodara, Hyderabad, Pune Lucknow,Rajkot, Surat, Darjeeling 3 2,000 1,200 60 72,000 10,800 Total 348,000 52,200 Sources: Gopal B. Kateshiya, "Rajkot Marathon: 37,000 Participate; Kenyans, Ethiopians Bag Top Prizes," The Indian Express, January 25, 2016, accessed June 12, 2016, http://indianexpress.com/article/cities/ahmedabad/rajkot-marathon- 37000-participate -kenyans-ethiopians-bag-top-prizes/; 14,000 Runners Participate in AirTel Hyderabad Marathon," The Economic Times, August 31, 2015, accessed June 12, 2016, http://articles.economictimes.indiatimes.com/2015-08- 31ews/66070975_1_full- marathon-runners-shriram-life-insurance; 2,000 Participants Run in Amway/Darjeeling Police Marathon," January 15, 2016, accessed June 12, 2016, http://indiablooms.com/ibns_new/sports-details/SN/1543/2000- participants-run-in- amway-darjeeling-police-marathon.html; "India Marathon Calendar," India Running, accessed June 15, 2016, http://indiarunning.com/marathon-calendar.html. EXHIBIT 4: DISTRIBUTION OF TARGET POPULATION OF CYCLISTS (BY EVENT TYPE) Event Type Total no. of Events Average no. of Participan ts Total Athletes (Avg. no. of Participants no. of Events) Prospectiv e Customers (15%) 14 600 Triathlons/Duathl ons 8,400 1,260 50 200 1,500 Racing Randonneur 10,000 750 15 50 113 Total 19,150 2,873 Note: Duathlon is a combination of two events: running and cycling; Randonneur is a long-distance cycling event of 200+ kilometres. Sources: "Duathlons," India Running, accessed June 15, 2016, http://indiarunning.com/duathlons.html; "Cycling Calendar," India Running, accessed June 15, 2016, http://indiarunning.com/triathlons.html