Required Assignment 6.

4 <Aarti Kumar>
Estimate the Market Potential for the Following Products:
Diapers, Ice cream
Diapers:

During the 1990s, an average of 4 million babies are 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?

(b) What other qualitative issues need consideration here?

Methodology used:

1. Secondary Data Collection: Utilise the information provided to identify the total number of
diapers consumed annually.

Available Data utilised – Average number of babies born annually & Average number of diapers
used per child during the first 30 weeks

2. Numeric Calculation:

 Calculated the annual diapers used per child.

 Multiplied the diapers per child by the number of babies born annually to find the
annual market potential.

Approach taken:

Quantitative Analysis: Use of Numerical data to calculate the market potential for disposable
diapers

Assumptions:

1. The average number of babies born annually remains constant over the years.

2. All babies in the specified age range use disposable diapers. No Exclusions for babies using
traditional methods or allergic to diapers

3. Diaper usage per child remains consistent across different demographics.

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Calculation:

Annual market potential = Number of babies * Diapers per baby

Solution:

Number of Babies = 4 Mill

Diapers used per week = 7800/130 = 60 diapers per week

Number of weeks in a year = 52

Diaper user per baby in a year = 60*52 = 3120

Annual market Potential = 4 Mil *3120 = 12.4 Bill

Qualitative concerns:

1. Health Hazards: The parents can be concerned on the after effects of diapers like skin
redness, rashes etc. Hence, high quality of product becomes key.

2. Cost: Diapers can be expensive for a or lower middle class & upper middle class family for
regular day to day usage.

3. Traditional Beliefs: As per major believe and behavioural patterns, diapers were used on
special occasions like travel, events etc rather than day to day use

4. Environmental Impact: Disposable diapers contribute to landfill waste, and there might be a
growing awareness of the environmental impact.

5. Regulatory & Health Certifications: One also needs to ensure that they are compliant with
geographic regulations and have attained the necessary certification before launch.

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Ice cream:

In 1999, the population of a country was 273,401,000. Of these, 16 million suffered from
diabetes (and hence could not consume regular ice cream) and 30 million were lactose
intolerant (and hence could not 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)

Methodology used:

Secondary Data Analysis: Analysis on the population data provided to understand the total
population that was eligible to consume ice – cream

 Determined the potential consumers by subtracting the populations with dietary

restrictions from the total population.
 Calculated the market potential in dollars by multiplying potential consumers,
consumption per person, and the price per pint.

Approach taken:

Quantitative Analysis:

 Use of Numerical data to calculate demographic considerations such as population

suffering from diabetes or are lactose intolerant.
 Evaluated market potential by considering consumption per person and the average
price per pint.

Assumptions:

 Average ice cream consumption per person will remain consistent

 Average price per pint for the calculation will also remain consistent

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Calculation:

1. Potential Consumers = Total Population-(Diabetic Population + Lactose Intolerant Population)

2. Market Potential (Dollars) = Potential Consumers × Consumption per Person × Price per Pint

Solution:

Let’s calculate Potential consumers first,

Total population = 273,401,000

Population with diabetes = 16,000,000

Population lactose intolerant = 30,000,000

Potential consumers = Total population - (Population with diabetes + Population lactose

intolerant) = 273,401,000 - (16,000,000 + 30,000,000) = 227,401,000 potential consumers

a. Now Market Potential in Units

Total Consumption = Adjusted Population * Average Consumption per Person Total

Consumption

= 227,401,000 * 46.6

b. Total Consumption = 10,598,326,600 pints

b. Market Potential in Dollars = Total Consumption * Average Price per Pint Market Potential in
Dollars = 10,598,326,600 * $3.19

Market Potential in Dollars = $33,826,301,914 or $33.8 Bill

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