A retailer decides to promote a new daily vitamin to a city with an adult population of one million. The proposed advertising and promotion plan will attempt to reach 30 percent of this population. Market research suggests that, of the adults reached, approximately 20 percent will try the product. However, only 50 percent of those willing to try it will find it on the retailers shelves, given that it will only stock it selectively during the first year. After trial, one out of four adults will continue to purchase the vitamin; they will buy a 120-tablet bottle once every quarter. The retailer acquires the 120-tablet bottles at a cost of $9.99 per bottle and sells them for $21.99 per bottle.

Use the ATAR model to calculate the retailers unit sales during the first year of stocking the new daily vitamin. Show all your calculations.

Calculate the retailers profit during the first year. Assume that the only applicable cost is acquiring the 120-tablet bottles, so ignore fixed costs and marketing-related expenses. Show all your calculations.

Based on experience, the retailer knows that a campaign such as this will ultimately result in a market penetration rate of 20 percent. Knowing this, recalculate the retailers unit sales during the first year of stocking the new daily vitamin. Show all your calculations.