Question
All Over Shampoo is launching a new anti-dandruff, 2-in-1 conditioning product in a simulated test market within the United States. The company expects to achieve
All Over Shampoo is launching a new anti-dandruff, 2-in-1 conditioning product in a simulated test market within the United States. The company expects to achieve strong distribution with an ACV% of88%. Market research shows that the marketing mix will result in an awareness rate of41%, a trial rate of23%, and a repeat purchase rate of40%. The population for the test market is estimated at1,110,000households.
If trial sales are made at prices that yield margins of $0.50 per 12oz bottle and repeat purchases yield margins of $1.00 per 12oz bottle what is the expected contribution of the new product if households purchase two 12oz bottles at trial and one 12oz bottle 3 times per year as repeat?
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