Background
The CEO of a publishing company is contemplating the launch of a men's monthly magazine in the US targeting 30-50-year-old men.
The goal is to generate $10 million in circulation revenues within the first year. You're hired to determine the feasibility of this goal.
Potential Solution
This is an estimation case where reasonable assumptions are essential. Define key assumptions carefully.
Target Customers: Estimate the addressable market - with around 80 million men aged 30-50. Presume only a percentage would be interested in a men's magazine (about 10%).
Expected Share: Anticipate a 5% market share in the men's magazine market within the first year.
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Revenues: Assuming a cover price for the magazine and a split between newsstand and subscription sales. Calculate expected monthly sales
Conclusion:
Based on the calculated revenues of $7.2 million, it falls short of the CEO's $10 million target. Thus, the launch wouldn’t meet the stated goal for the first year's circulation revenues.
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