Zoëcon Corporation: Insect Growth Regulators
Attached is my summary for the Zoëcon Corporation case. Included are four tables which provide supporting data for my recommendations.
The Problem(s). Should Zoecon commercialize the Strike Roach Ender brand by expanding distribution to the 19 city market area in the Southeast United States?
The Recommendation(s). Zoecon Corporation should not expand their sales of Strike Roach Ender into the 19 city market in the Southeast United States. Justification for the recommendation stated is based on four decision factors from the case.
Profitability. From the test market analysis, the …show more content…
From this insecticide consumer market, ant and roach killers contained 40% of the market, the largest of insect-specific insecticides. Also, aerosol sprays and foggers were the preferred method for application, which accounted for 74% of consumer retail sales. The growth can easily be seen in this particularly segment.
Chemical Characteristics of Product. – The development of this new product differentiates itself from competitor products. Hydroprene, an insect growth regulator that is useful for preventing normal roach maturation was considered a major breakthrough. This allows the product to form a competitive advantage over its competitors which can eventually help Zoecon gain market share.
TEST MARKET UNIT CONTRIBUTION MARGINS
Package | Sales Mix | Unit Price | Unit Contribution | Weighted Avg. Unit Price1 | Weighted Avg. Unit Contribution2 | Aerosol | 66.00% | $3.14 | $1.73 | $2.07 | $1.14 | Fogger | 34.00% | $2.79 | $1.53 | $0.95 | $0.52 | Total3 | | | | $3.02 | $1.66 |
1 0.66(Sales Mix)* $3.14(Unit Price) = $2.07 Weighted Avg. Unit Price. Process continued for Fogger product using 0.34 Sales Mix and $2.79 Unit Price data.
2 0.66(Sales Mix)* $2.07(Unit Price) = $1.14 Weighted Avg. Unit Contribution. Process continued for Fogger product using 0.34 Sales Mix and $1.53 Unit Contribution data.
3 $2.07 (Aerosol) + $0.95 (Fogger)