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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% of80%. Market research shows that the marketing mix will result in an awareness rate of37%, a trial rate of21%, and a repeat purchase rate of39%. The population for the test market is estimated at1,390,000households.

Calculated Variables so far:

trialv =172,804

triers =86,402

repeat =0.024(2.4%)

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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