Question
Topic: Advertising/PR
Reach: How To Determine The Practical Requirment
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I am a start-up (or will be) . I have a product idea. Critical decision I have before me is deciding on the production level.
Here is what I grasp:
Let us assume that I calculate that the lower limit of profitable production is 1000 units. And, that my resouces allow me to make 10, 000 units.
I decide that I should try to produce 10, 000 units.
I do market research and establish that total segment production is 1000, 000 units.
Further reaserch forcasts that I could take 5% of market share.
That means if I reached everyone currently absorbing the total production, I have potential sales of 50, 000 units.
My actual sales forecast is a function of my sales/marketing plans. Who I advertise with, which retailer I may place my product with, whether I use TV advertising etc. It's my choice.
Now, if my market share is 5%, then if I could reach 100% of the market, I would in theory sell potential sales - which is 50, 000 units.
My decision is to try to sell the maximum I can produce, which is 10, 000 units, so in theory I have to reach 20% of the market segment.
I believe the above is correct.
Okay, I've got to discover what the practical requirements need to be in order to reach 20% of the markt.
I've never run a business, I'm new to this, and I don't know how I would proceed so that I end up with proper arrangements that allow for 20% reach.
By "proper arrangements" I mean what I should pay for, in terms of advertising, sales. Whatever impacts on putting the product before customers.
一个ny advice, hints on this? Do I set out to reach 20% of the market - or what? Who do I talk to? Etc etc.
I guess in a nutshell I have to produce a plan.
I need a way of working, so I know what my requirements are in order to get the required 20% reach. Thanks.