Beirut, June 17, 2012
AMERICAN UNIVERSITY OF SCIENCE AND TECHNOLOGY
Faculty of Business and Economics
Advanced Marketing Management ( MKT 500)
Spring Semester 2012
Case Analysis: Zoecon Corporation
Professor : Dr. Ziad F. Haddad
By: Lama Khreiss
Zoecon corporation was found in 1968 in California By Dr. Carl Djerassi in order to research endocrinological methods of insect population control. It was acquired by Sandoz LTD producer of pharmaceuticals, agrichemichals, colors, and dyes. Zoecon’s mission was to be the marketing arm of their producer in the animal health and insect control areas. Zoecon sells many products under different brand names as revealed in exhibit 1. They sell animal health products to small animal veterinarians and clinics, pest control chemicals for farm animals, insecticides for household pets and pest control to supermarkets, pet stores, and pest control companies. Finally, they also sell chemical compounds to firms engaged in marketing pest control products to the consumer market . The products target consumer, and pest control market. The new objectives emphasized a focus on high financial-return products and businesses, and to introduce insecticides that are safer to the household. The change in the focus of research and development from new insect adulticides which kill adult insects to chemical compounds that disrupt insect reproduction was in an attempt to meet the demand of customers’ increasing concerns for safer compounds. Zoecon’s products are spread in the U.S market where 80% of roach insecticide were sold . However, executives had aims to expand more in the U.S market and go International in 1987.
The issue in the corporation was to analyze and discuss the test market results for the Strike ROACH ENDER, after it was placed in a consumer test market for 6 months in the cities that represent the 19 city market . The cities were Charleston, South Carolina, Beaumont, Texas, Charlotte, North Carolina, and New Orleans , Louisiana. The decision is how they can best allocate technical, financial, and marketing resources for their IGR compounds. Suggestions were discussed, some executives called for consumer market expansion with the ROACH ENDER, others said that the company should concentrate its effort on opportunities in the pest control market. Also, some executives suggested that the company should reconsider any plans to market the product itself, whereby Zoecon should sell its IGR compound to firms who are actively engaged in reaching the consumer insecticide market . These firms included d-Con company, S.C Johnson and son ( Raid), and Boyle-Midway Division of American home products ( Black Flag).
Zoecon has many products divided between adulticides and growth regulators that kill fleas, cockroaches, rats, mice, spiders, rodents, crickets, and others. Insect Growth Regulators are synthetic analogs that prevent the continuity of the reproductive cycle in fleas, and when used on cockroaches, it makes them incapable of reproducing. This unique and high tech product that Zoecon uses is extremely effective in eliminating insect population. Besides, as chemicals, IGR’s are much less toxic than other compounds typically used in household insecticides since they are chemical analogs of juvenile hormones specific to insects. The scientific breakthrough Zoecon achieved in PRECOR and GENCOR provided competitive advantage among competitors. The unique feature of IGR’s is that the immediate effects of an application are not observable. Another thing is the company’s ability to create products for the two market segments; the consumer and the pest control market whereby sales were forecasted to grow at an average rate of 10% per year through 1990. Zoecon products had controlled the market since we notice a very high market share in the firms who sell their...
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