Exercise 1: Demand Assessment and Forecasting (9 Marks)

Potential Estimation

1. Diapers (3 Marks)

During the 1990s, an average of 4 million babies were born annually in a country.
The average child goes through 7,800 diapers in the first 130 weeks of life (2.5
years) until toilet training, or 60 per week (Deveny, 1990).
(a) What is the annual market potential for disposable diapers? (1.5 marks)
(b) What other qualitative issues need consideration here? (1.5 marks)

2. Consumption of Ice cream (3 Marks)

In 1999, the population of a country was 273,401,000. Of these 16 million suffer

from diabetes (and hence cannot consume regular ice cream) and 30 million are
lactose intolerant (and hence cannot eat ice-cream). On average, consumption per
person is 46.6 pints per year. The average price per pint in 1999 was $3.19.
What is the market potential in (a) units and (b) dollars? ($ is used as a general
unit of currency) (1.5 marks each)

3. PDA (3 Marks)

(a) Estimate the market potential for PDAs in 2000. The total population in 2000
is 278.1 million. Children under 13 are 56.2 million, and those who live below the
poverty level are 21.1 million. (1 mark)
(b) Are there are implicit assumptions in your estimate? (1 mark)
(c ) Is the potential static? (1 mark)