Zoecon Corporation Essay
The Problem. The Zoëcon Corporation faces the following problems regarding their marketing strategy for their Strike ROACH ENDER product:
• Should the Zoëcon Corporation expand the distribution to a 19 city area where 80 percent of roach control products are sold?
• Should the Zoëcon Corporation focus their attention on the professional pest control market (Pest Control Operators (PCOs))?
• Should the Zoëcon Corporation contact the makers of Raid, d-Con, or Black Flag for the purpose of including the IGR chemical.
Recommendation. The Zoëcon Corporation expand the distribution to a 19 city area in the consumer market. The following justification is offered based on the decision factor below.
Market Characterization. The premise insecticide …show more content…
Unit Price: $4.32
Weighted Avg. Unit Contribution: $2.42 or 56%
EXHIBIT 2
SALES AND PROFIT ANALYSIS (CHAIN RATIO METHOD)
Trial: 1.7million HH x 6% trial rate x 1.3 units x $4.32/unit = $____572,832.00____
Repeat: 102,000 trial HH x 30% repeat rate x 3.5 units x $4.32/unit = $462,672.00
Total Sales $1,035,504.00
Contribution $1,035,504.00(56%)= $579,882
Less Case Exhibit 6 Expenditures $ 1,478,000
Profit/Loss $ 137,386
EXHIBIT 3
FORECASTING SALES AND PROFIT OF A 19 CITY INTRODUCTION
I. Assuming that all test market data would remain the same for expanded distribution, then forecasted sales in the 19 city market composed of 22 million households would be: $ Sales for Initial Trial: 22 million HH x 6% trial rate x 1.3 units x $4.32/unit = $7,413,120.00
$ Sales for Repeat Purchases: 1.32 million trial HH x 30% repeat rate x 3.5 units x $4.32/unit = $5,987,520.00
Total Sales: $13,400,640
II. Contribution dollars would be: ($13,400,640 x 56%) = $7,504,358.40
III. Expenditure levels (Fixed Costs) can be estimated several ways.
A. Assuming Zoëcon adopts the industry "rule of thumb" that $10 million are necessary to launch a new product when consumers were familiar with the brand name
• Should the Zoëcon Corporation expand the distribution to a 19 city area where 80 percent of roach control products are sold?
• Should the Zoëcon Corporation focus their attention on the professional pest control market (Pest Control Operators (PCOs))?
• Should the Zoëcon Corporation contact the makers of Raid, d-Con, or Black Flag for the purpose of including the IGR chemical.
Recommendation. The Zoëcon Corporation expand the distribution to a 19 city area in the consumer market. The following justification is offered based on the decision factor below.
Market Characterization. The premise insecticide …show more content…
Unit Price: $4.32
Weighted Avg. Unit Contribution: $2.42 or 56%
EXHIBIT 2
SALES AND PROFIT ANALYSIS (CHAIN RATIO METHOD)
Trial: 1.7million HH x 6% trial rate x 1.3 units x $4.32/unit = $____572,832.00____
Repeat: 102,000 trial HH x 30% repeat rate x 3.5 units x $4.32/unit = $462,672.00
Total Sales $1,035,504.00
Contribution $1,035,504.00(56%)= $579,882
Less Case Exhibit 6 Expenditures $ 1,478,000
Profit/Loss $ 137,386
EXHIBIT 3
FORECASTING SALES AND PROFIT OF A 19 CITY INTRODUCTION
I. Assuming that all test market data would remain the same for expanded distribution, then forecasted sales in the 19 city market composed of 22 million households would be: $ Sales for Initial Trial: 22 million HH x 6% trial rate x 1.3 units x $4.32/unit = $7,413,120.00
$ Sales for Repeat Purchases: 1.32 million trial HH x 30% repeat rate x 3.5 units x $4.32/unit = $5,987,520.00
Total Sales: $13,400,640
II. Contribution dollars would be: ($13,400,640 x 56%) = $7,504,358.40
III. Expenditure levels (Fixed Costs) can be estimated several ways.
A. Assuming Zoëcon adopts the industry "rule of thumb" that $10 million are necessary to launch a new product when consumers were familiar with the brand name