Assume Clinique expects to sell 3 million ounces of BB cream within the first year after introduction but expects that half of those sales will come from buyers who would otherwise purchase Clinique’s moisturizer

(that is, cannibalized sales). Assuming that Clinique normally sells 10 million ounces of moisturizer per year and that the company will incur an increase in fixed costs of $2 million during the first year of production for the BB cream, will the new product be profitable for the company? Refer to the discussion of cannibalization in Appendix 3: Marketing by the Numbers for an explanation of how to conduct this analysis. (AACSB: Written and Oral Communication; Analytical Thinking)