Sales and Profit for the Expansion

Zoëcon Corporation should commercialize the Strike Roach Ender brand by expanding distribution to the 19 cities market area in the Southeast United States. Followings are my justifications based on the decision factors in the case for the recommendation.Profit Potential. First of all, Strike Roach Ender products are packaged in two different ways which are 10-oz aerosol and 6-oz fogger and they account for 66% and 34% of total sales in test market respectively. From the first part of table 1, the weighted average unit price and contribution for the product are calculated as $3.02 and $1.66, which means that the expense $1,478,000. It seems that it is not wise to introduce the product into a larger market which covers 19 cities, but a forecast of the sales and profit of the 19 cities market is necessary. Table 2 shows the result of forecasting and the total contribution in the bigger market which is $5,149,320. Let us assume that the costs of up-front investment in market research, setup/auditing, and public relations campaign don’t have to be repeated in the expanded distribution, so the major cost will be the promotion and advertising. Assuming the expenditure is based on a per city approach, the total spending would be $4,064,000. Therefore, Zoëcon can get a profit of $1,085,320. Comparing the profit and marketing Roach Ender are less toxic, which means less harmful to human and animal comparing with other compounds typically used in household insecticides, and long-standing effect, which is due to the fact that it affects the reproductive cycle of an insect. The features of Strike Roach Ender perfectly meet what the consumer wants in the market. When the product is introduced to a larger market, there will be more potential consumers.