Marketing Report: 2Chainz Dog Leash - Market Potential Analysis

This marketing report analyzes the "2Chainz" dog leash, a product designed to prevent dogs from pulling during walks. The report identifies the "Golden Year Companion" segment as the primary target market due to their high disposable income and potential challenges with dog leash handling. It estimates the market potential, considering the number of dog-owning households in the United States and the willingness to pay for the product. The report also includes a detailed financial analysis, calculating fixed and variable costs, break-even quantity and revenue, and the number of units needed to achieve a profit of $1 million. Finally, it evaluates two investment offers, recommending the one that offers a more favorable profit-sharing arrangement, and highlights the importance of market potential in making the decision.

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Market Segment profile
The company should target the golden year companion as the target market as this
segment consist of the high income household and has the disposable income to spent on a $40
dollar dog leash. As this segment consists of elderly, they face more problems in dealing with
pulling of leash. These consumers own medium to large size dogs and they are expected to face
more issues when compared to other segments. Furthermore, these consumers provide high
attention to their dogs and are more likely to spend on this product.
Market potential of unit sold
The segment profile shows that 30% of the consumers belong own a dog. Considering 40
million household in the United States that owns a dog, this consumer segment includes 12
million consumers (40milliom *30/100). The pricing analysis shows that 30% of the consumers
are expected to pay the retail price of $40 which implies that atleast 4 million consumers
(12*30/100) are willing to pay the price. Considering 1 unit sold to this consumer segment, the
company can sold minimum of 4 million units in the market. Therefore, the market potential of
the product is quite high considering the minimum number of units that can sold to the target
segment.
Fixed costs
The fixed costs include rent, Manager’s Salaries, Advertising and Production Cost. Therefore,
the overall fixed cost is $110,000 ($25,000+$75,000+$10,000).
Variable costs
The variable cost depends on the number of the unit produced and considering the
production cost of $5 and number of units produced. Considering the target potential of 4 million
consumers, if the company starts producing 100,000 products then the variable cost will be
$500,000.
Break even quantity
BEQ= FC/P-VC where, FC= fixed cost, P= price charged per unit and VC= variable cost per unit
= 110,000/ (19-5)

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=7858 units
Break even revenue
BER= Break even units * sales price
= 7858* 19
= $149,302
Product feasibility
Considering the break even unit and the break even revenue, the product is quite feasible
in the market based on the 4 million minimum amount that can be sold to this consumer segment.
The break even unit suggest that the company can reach breakeven point in less than a year
which implies that the return on investment is significantly high. Moreover, the company can
achieve the break even without even selling the product to 10% of the consumers in the target
segment.
Number of units to be sold
Therefore, in order to achieve a profit of 1 million, the number of units sold has been
calculated using the following formula,
Units to be sold= (Desired profit/ contribution margin per unit) + Break even unit
= (1,000,000/7) + 7858
= 150,715 units
Choosing between two offers
The preferred offer to be chosen is from the Piranha Daymond Jim as the first investor is
asking for 20% of the ownership. It implies the first investor was charging 20% of the profit for
his investment. On the contrary, considering the profit on each sales as $7, the second investor is
asking for $1 from each sales which is 14% of the profit margin. Therefore, in the second
scenario, the company will have to share less amount of profit in the second scenario.
The market potential definitely impacted the decision as there is a huge market for the
product and finding a right investor is not the problem as long as the product is innovative and

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catering to the current market gap. Moreover, based on the break even analysis, the company can
easily attain sustainability in the market.
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