Zoecon Corporation Case

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To:Executive, Zoecon Corporation
Date:Thursday, February 17, 2005
Subject:Strike Roach Ender Introduction

Projected Industry
Projected Growth Rate of 10% annuallyProjected growth rate of 8% annually Projected sales of $4.4 million Projected sales of $2.7 billion

Flea IGR Introduction – Similar Scenario
•Great success of introduction of flea IGR PRECOR into PCO, veterinary and pet store markets. •In 1980 Zoecon broke into the supermarket segment by selling the PRECOR ingredient to it's competitor dCon •In early 1983 Flea Ender (using PRECOR) was introduced to supermarkets by Zoecon – 11 % of the market was captured by late 1983 •Flea Ender's success attributed to a second 3rd party competitor S.C. Johnson •By 1985 Strike Flea Ender had captured 18% of the flea pesticide market and continues to achieve it's profit objective

Consumer Test Market Analysis
Zoecon's introduction of the Strike Roach Ender has captured a substantial portion of the test area household market segment. As seen in Table 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 also 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 both units and dollars as a basis for further projections. As seen in Table C substantially larger sales are required to break even.

Industry Market Analysis
Using the techniques from the test market estimates of market share and projected sales for the 19 city...
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