important Note: You?! be able to answerthe tottowing questions regardtess of your personal experience or attitudes toward marijuana. .' selected marijtiana as the context tbr these questions because it is NOT currently mdety marketed. And I do this because I want you to rety on what you've teamed in this course instead or spending your time searching the intemet for the 'right' answer. President Bide" surprised many political strategists with his latest tweets: 'I discovered the best way to manage the stress from my job. Are you ready for it? It's marijuana. That's right! I'm going to make America great by legalizing marijuana everywhere, not just in those blue states. that mnied me to victory." People were shocked. Could he get Congress to go along? 10/9/21, 12:45 PM Module 3: Quiz Tap Customer Insights: 202130 MKT 5310 01 - Sem/Marketing Strategy Next tweet: "By executive order, I declare marijuana-based products are completely legal as of today." Assume there are no legal challenges and that, as of today, marijuana is perfectly legal, everywhere in the United States. You and several friends decide to manufacture a marijuana-based product to be sold in supermarkets across the country. The product: Buzzy Banana Brownies. Basically, they are chewy, organic brownies with bananas added for nutrition and THC added for the buzz. THC is the active ingredient in marijuana. The brownies will be packaged in resealable, rectangular paperboard packages similar to HoHos or Twinkies or other such tasty delights. Your team is unsure about which segment of the market to target. One of your teammates suggests targeting preteens. "They'll be lifelong consumers." You fire her. You do have moral standards. Your team regroups and decides you could target people who suffer from chronic pain. Or you could target recreational users. Assume there are no legal issues, no FDA issues, etc. "Let's go after both!" one of your teammates suggests. "We can't do that," you explain. "Brand image is going to be important to attract buyers. We don't have the resources to create separate brand images and separate campaigns for two distinct markets. Chronic pain sufferers will reject our product if they see ads describing Buzzy Banana Brownies as a way to get high. And recreational marijuana users won't be interested if they see ads with old people in pain nibbling on Buzzy BB. We have to choose ONE segment to target." "OK," the group agrees. "Which market is likely to be more profitable for us?" "Let's vote," suggests one of your partners. "I have a better idea," you suggest. "I can guide an analysis that will help us make the right decision." You're a hero. First, you calculate the potential market for each of the two segments.There are 250 million adults in the US. Chronic pain segment According to the Centers for Disease Control and Prevention (CDC), 20.4% suffer from daily pain. Those people form the chronic pain market. So the potential market for the chronic pain market is [ Select ] million people. Recreational segment According to industry reports, 38% of Americans are likely to form the recreational market. Thus, the potential market for the recreational market is [ Select ] * million people. Next, you investigate the appeal of BuzzyBB to your target market segments. Your friend Jorge is in charge of market research. He conducts concept tests. First, he describes the product to study respondents and then asks them to rate how likely they are to buy BuzzyBB using a 5 point scale. Then he collects demographic and prior usage information from respondents. "Concept acceptance rates are different for the chronic pain and the recreational markets," he tells your team. Chronic Recreational user pain segment segment Definitely will buy 28% 33% Probably will buy 42% 17% Might or might not 10% 30% buy Probably won't buy 5% 5% Definitely won't buy 15% 15% "These are raw scores from respondents. They're inflated because respondents are trying to be supportive and helpful. A rule of thumb: we can count on trial purchases from 80% of people who say they'd "definitely" buy, and just 30% of those who saythey'd "probably" buy. The others are very unlikely to try the product," he advises. Based on this info, you estimate the trial rate percentages for the chronic pain market [ Select ] and for the recreational user market [ Select ] Now, you estimate trial. Your college friend, Sissy, is a hot shot sales exec with Mondelez International where she's responsible for selling Oreos and other baked snacks to supermarkets. Sissy will head up sales for BBB. "If we position BuzzBB for the chronic market, we can count on 60% of supermarkets and drug stores (all commodity volume) to carry BuzzBB," Sissy assures you. "But, if we go after the rec market, supermarkets and drug stores will be skeptical about carrying the product. They'll be worried about a backlash from people who don't approve of marijuana. I predict just 20% of supermarkets and drug stores will carry the product." Your classmate, Kitty, will head up advertising. "Our budget is tight. So we'll use social media to build awareness of BuzzyBB." "With a solid social media campaign, 20% of the chronic pain market and 40% of the rec market will be aware of our product," she promises. Assume the following: 1. The market potential for the chronic market is 75 million and the market potential for the rec market is 80 million. Note: You calculated the market potential for each segment above. But if you had an error above, I don't want that error to ripple through the entire exam. So I am making up these numbers out of thin air. Do not rethink your earlier calculations based on the assumptions I'm using here! 2. The trial rates are 40% and 44%. Same disclaimer. Based on this information, approximately what will year 1 trial be in millions of people for chronic pain sufferers [ Select ] and for recreational users [ Select ]Unit sales forecast You know that repurchases depend on the whether the product lives up to expectations. If the product is acceptable, then chronic pain users will buy an additional 20 packages per year because they're in constant pain. Otherwise, they will only buy the trial package. Because marijuana doesn't relieve all kinds of pain, you estimate 30% of the chronic pain users will find the product acceptable. If the product is acceptable, then rec users an additional 9 packages per year. Otherwise, they will only buy the trial package. There are fewer substitutes in the rec market, and so you think 40% of the rec users will find the product acceptable. Assume that Year 1 trial is 5 million chronic pain users and 10 million rec users. (Again, that's inconsistent with your earlier calculations. / provide these estimates to prevent cascading errors. ) What is your year 1 retail sales forecast in units (packages, in millions) for Chronic pains sufferers [ Select ] Recreational users [ Select ] The product will retail for $17.00 in the chronic pain market and $20.00 in the rec market. Retailers' demand a gross margin of 35%. What is your wholesale sales forecast (that is, your sales to retailers) in $ millions for. Chronic market [ Select ] Recreational market [ Select ]