Information:

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 Data

Segment Profiles

You 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 Name

Guard Child Family Dog Golden Years

Dog Substitute Counterpart

Please use the scenario below to help you answer the questions in the Answer Entry section

for this assignment in Canvas.

Motivation for having a dog

For protection Watchdog

Dog serves as a replacement for a child

Dog as a playmate for kids

Keep active/activity partner Avoiding loneliness

Demographics

Lower Household income Ages 25 - 45

High household income Ages 25 - 35

Middle household income Ages 30 - 45

High household income Ages 50 - 65

Attachment/Attention

Less attached

Highly attached High level of attention to dog

Medium attachment Lower attention to dog

Medium/High attachment High level of attention to dog

Type of Dog

% of Households in the U.S. Owning a Dog in this Segment

Pricing Survey

Large dog Lives outdoors

25%

Small dog Lives indoors

20%

Medium to large dog

30%

Medium to large dog

25%

You 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 Survey

You 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 this problem.

Questions:

1. Calculate the market potential for the product in terms of units sold. Enter the number you've calculated in the space provided below. Note: To do this, you will have to make some decisions about the targeting segment(s), what numbers to use, etc. Don't stress! There are various ways to approach this question. You will enter a number here and be given an opportunity to explain your reasoning in the next question.
2. In the previous question, you calculated the market potential for the product in terms of units sold. In the space below, please explain your calculation and the reasoning behind it.