Question

The potential market represents all active duty military members, all veterans, and their families. Assume that according to the United States Department of Defense, as of December 31, 2014 there were 1,361,717 active duty personnel in all armed services. The veteran population totaled 21 million at the end of 2014. Assuming the average cost of life insurance is $710 per year and that potential customers purchase one policy per year, use the chain ratio method to calculate the market potential for life insurance in the military market. The number of buyers in the market can be estimated as 22361717. (Round to the nearest whole number.) The marked demand is estimated as $ million. (Round to the nearest whole number.)

Answer 1

By applying the chain ratio method to our marketing strategy, we can determine how best to market our business and how much is the cost of spent.

Many businesses have benefited by using this method and applying it on regular intervals during the normal course of business

By applying the chain ratio method, we can stay on top of the marketing landscape and we can ensure hit our marketing targets head on.

Solution of the Question:

First part of Question:

A) Total Veterans population is 21,000,000

B) Average cost of life insurance is $710 per year.

C) Assuming that one person is buying one policy per year

Total estimated market potential for life insurance in military's market is (A) x (B)

i.e. 21,000,000 x $710 = 14910 Million

Second Part of Question

A) Total number of Buyers in the market is 22,361,717

B) Average cost of life insurance is $710 per year.

Total estimated demand is (A) x (B)

i.e. 22,361,717 x $710 = 15877 Million