Zoecon Corporation - Strike Roach Ender :: Case Study, solution

ToExecutive, Zoecon CorporationFrom DateThursday, February 17, 2005Subject borrow Roach Ender IntroductionProjected IndustryConsumersProfessionalProjected Growth Rate of 10% annuallyProjected growth rate of 8% annuallyProjected sales of $4.4 million Projected sales of $2.7 billion Flea IGR Introduction Similar Scenario colossal success of introduction of flea IGR PRECOR into PCO, veterinary and pet store grocery stores.In 1980 Zoecon broke into the super foodstuff segment by selling the PRECOR ingredient to its competitor dConIn archean 1983 Flea Ender (using PRECOR) was introduced to supermarkets by Zoecon 11 % of the market was captured by late 1983Flea Enders success attributed to a second 3rd party competitor S.C. JohnsonBy 1985 Strike Flea Ender had captured 18% of the flea pesticide market and continues to achieve its profit objectiveConsumer Test Market AnalysisZoecons introduction of the Strike Roach Ender has captured a substantial character of the test area household market segment. As seen in skirt A the brand was recognized by over half of the households in the market and 6 %,( 70,200 households) of those households purchased the brand, resulting in a profit of $ 247,180.40. Though repeat purchases were besides high at 30% (21,060 households) the profit generated was not enough to sustain a revenue in the trial market. Zoecon ended the market in a net loss of $$1,230,819.40. Figures are further broken down in Table A.Contribution margins were also high for Strike Roach Ender. Aerosol Strike had a contribution margin of 55.1% and fogger had an even higher margin of 57% as seen in Table B.Table C projects the break even analysis in some(prenominal) units and dollars as a basis for further projections. As seen in Table C substantially larger sales are required to break even.Industry Market AnalysisUsing the techniques from the test market estimates of market share and projected sales for the 19 city (80% of trial insecticide volume) are made f or the introduction of Strike Roach Ender into the household market. I also chose to increase the advertising budget by 20% which increased costs to upwards of $12 million. This further drove the net loss to a nett projection of $6,844,476 as seen in Table D. Much like the test market Contribution margins were also high for Strike Roach Ender. Aerosol and fogger Strike had a contribution margin exceeding 50% as seen in Table E.Table F projects the break even analysis in both units and dollars as a basis for further projections.