Chain Ratio Method

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1. An estimation method used by multiplying a base number by a chain of related percentages. It is frequently used in marketing to estimate the size of a target market.


Here is a step-by-step example of how one might use the Chain Ratio Method to estimate the number of TVs in the United States (numbers for illustration only):

Question: How many TVs are in the US?

Method:
1. There are the roughly 300 million people in the US (This is the base number).
2. There are roughly 4 people per household: 300,000,000/4 = 75,000,000 households.
3. There are roughly 2 TVs per household: 75,000,000 * 2 = 150,000,000 TVs.

Answer:
150 million TVs.

 

 

Author Marketsaurus

The marketing tyrannosaurus.

Website: www.marketsaurus.com
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