Question

using the forecast model for pasta shown in Exhibit 5, what is your forecast of the demand for pizza? hint: the necessary data is contained in Table B and Exhibit 7

Exhibit5 Exhibit 5 - Fresh Pasta Purchase Volume Estimate, Year'1 Trial Purchase Intent Definitely would buy % of "Definites" who actually buy "Definite" Purchases 27% 80% 21.6% Repeat Purchase Inputs Trial Households (MM) Repeat Purchase Occasions Repeat Transaction Amounts Probably would buy % of "Probables" who actually buy "Probable" Purchases 49% 14.7% 36.3% Repeat Rate, by Product Scenario Mediocre Product Average Product Excellent Product 21% 37% 49% Trial Rate (Definite + Probable) Marketing Plan Adjustment Gross Rating Points Projected Consumer AwarenesS Repeat Volume, by Product Scenario (MM Mediocre Product Average Product Excellent Product 800 17% 50% 3.0% 2.3 All Commodity Volume distribution (ACV) Marketing Adjusted Trial Rate Trial Rate x Awareness X ACV 45.2 Target Households (MM)* Trial Households (MM) * Target households based on addressable market in metropolitan areas with annual household income over $50K

Answer 1

Forecast of demand for pizza based on the pasta model

1 TRIAL PURCHASE INTENT

non customers True earth customers

definately would buy 15% 26%

% of definites who actually buy 80% 80%

definite purchases 12% [80%of 15%] 20.8% [80%of 26%]

probably would buy 39% 53%

% of probables who actually buy 30 % 30%

probable purchases 11.7% [30%of 39%] 15.9% [30% of 53%]

Trial rate [def + probable] 12%+ 11.7% =23.70% 15.9%+ 20.8% = 36.7%

2 MARKETING PLAN ADUSTMENT

projected customer awareness 12% 50% [ from Table B]

ACV 40% 40%

MARKETING ADJUSTED TRIAL RATE 1.14% [ 23.7%$\times$12%$\times$40%] 7.34%[36.7%$\times$50%$\times$40%]

[trial rate $\times$ awareness $\times$ ACV ]

target household 31.752 46.452

trial household 0.3612 [1.14%of 31.752]   3.4095 [ 7.34% of 46.452 ]

repeat rate 49%

repeat transaction amount 1.25

repeat purchase occasion 2