In your analysis of local demographics, you discover that the target market makes up only 5% (core market share) of the households that currently rent (or would be interested in renting) in this town. If market experts believe that a total of 5,000 apartment units will be rented in your entire hometown within the next year, what is the projected number of units the developer could expect to lease in year 1 if he is able to capture 20% of the market potential?

Question

Business

Damien Copeland

21 November, 01:29

In your analysis of local demographics, you discover that the target market makes up only 5% (core market share) of the households that currently rent (or would be interested in renting) in this town. If market experts believe that a total of 5,000 apartment units will be rented in your entire hometown within the next year, what is the projected number of units the developer could expect to lease in year 1 if he is able to capture 20% of the market potential?

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Marshall Owens · Answer 1

50 Apartments

Explanation:

The reason is that the company will get involved with 5% of the total apartment leasors and out of these 250 leasors (5% * 5000) only 20% would agree to to rent out their apartments, which is 50 apartments.

Mathematically:

The market share captured = 5000 apartments * 5% share of total market will contact the company for its services * 20% would agree to lease terms

= 50 Apartments