1: A company has launched a new energy drink called “G-goody energy” in Miami-Da

Question

1: A company has launched a new energy drink called “G-goody energy” in Miami-Dade where there is a population of 2.56 million, research shows that 37% of the population is aware of this beverage, 40% actually admit that they would try it, and this company has been able to get distribution into 10% of the stores in the Miami area. How many people would be expected to make an initial purchase of “G-goody energy”? (remember to always use the percentages in this order – Awareness, Availability, Trial and Repeat)

Awareness = 37% = 2.56M x 37% = 947,200 people are aware

Availability = 10% of 947,200 = 94,720

Original Trial = 40% of 947,200 = 37,888

Repeat = 80% of 37,888 = 30,311

2: It is estimated that 80% of people who initially try G-goody energy will become repeat purchasers. What percentage of Miami-Dade population will become repeat purchasers of G-goody energy?

3: The owner of G-goody energy wants to increase the percentage of repeat purchasers to 2% of the population. Assuming Awareness, Trial and Repeat remain the same, what would the distribution need to increase to in order to achieve this goal?

4: Using the original percentages in question 1 and question 2, if G-goody energy has a goal of achieving 1% of the population as repeat buyers, what trial rate is needed?

Explanation / Answer

Assuming that you need solution to Question no. 3

In first case, Ratio of Availability and Repeat = 94720/30311

= 3.12

Since, the ratio of Availability and Repeat will remain same in third case because all other factors are same

New Trial count = 2.56 million *.02 = 51,200

Availability of store=3.12*51200

= 159,744

Thus increase in distribution = 159744-94720

= 65,024

Distribution to stores increase to approx 17%(16.86)

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