Q2) The Coronavirus pandemic has increased the demand for disinfectant products in the U.S. More and more customers are seeking disinfectant products for personal care as well as for their household needs. Responding to the growing demand in the category, Michelle Colban, a Marketing Director at Unilever has proposed launching a new disinfectant product under the Dove brand. The proposal is to launch a new hand sanitizing gel with aloe vera and moisturizing agents, which promises to kill 99% of germs while keeping the skin soft and protected. A BASES-like concept test revealed that the Dove brand users and non-users of the brand will respond differently to the new hand sanitizing gel. Among the users of Dove brand, 30% of the surveyed respondents said that they will definitely try the new product and another 60% said that they will probably try it. In contrast, among the non-users of Dove brand, 20% said they will definitely buy and 30% said they will probably buy. Because brand users are more likely to pay attention to ads for the new product, the brand users and non-users are also expected to have different awareness rates. While 50% of the brand users are expected to be aware of the new product after the launch campaign, only 15% of the non-users are expected to be aware of the new product. These two groups also differ in the repeat purchase rates and quantities. 70% of brand users are expected to keep buying the product after the initial trial, and they are likely to buy it 3 more times in a year (i.e., a total of 4 times a year). Only 50% of the brand non-users are expected to continue buying the product after the initial trial and they are likely to buy it 2 more times (i.e., a total of 3 times a year). The proposal is to launch only one pack, a 3 oz gel tube at retail selling price of $4.99 per tube (1.e., price paid by customers in retail stores). The average retail margin for the product is 35%. The company expects the market potential for this product to be about 90 million people. That is, about 90 million people could potentially buy this new product in the long run. About 20% of them are existing Dove brand users; the remaining are non-users of the brand. The new product is expected to have strong distribution with an availability rate of about 75% of the market potential, the same for users and non-users of Dove. The team estimates that the annual fixed cost for the launch would be around $19 million. This included all the fixed costs associated with this new product, including the advertising and promotional costs for launching the product. The team expects the variable cost of each 3 oz tube to be $1.85. As Sunny Jain, the President of Personal and Beauty Care division at Unilever, sat down with Michelle and other members of the to analyze the proposal, he posed several questions. a) Based on the concept test results, will the proposed new product be able to achieve breakeven sales in the first year? Please compute the breakeven sales, clearly showing all your calculations. b) The brand team is debating two different types of marketing activities for the launch. One manager proposed that the company can improve sales and profits by spending an extra $1 million (on top of the $19 million in the baseline plan) on free trial packs. The trial packs-free single-use sachets handed out in stores-would increase the definitely-purchase responses to 25% and the probably-buy response to 35% for brand non-users. Trial rates for brand users will not change. None of the other metrics in the decision funnel would change. Based on your analysis, do you support spending an additional $1 million on trial generation?c) Another manager proposed that the company can improve sales and profits by spending an extra $1 million (on top of the $19 million in the baseline plan) to increase the reach and frequency of advertisements among non-users of the brand. This is expected the increase the awareness rate among non-users to 20%. Awareness rates for brand users will not change. None of the other metrics in the decision funnel would change. Based on your analysis, do you support spending an additional $1 million on focused advertising? d) Jain also wondered whether Dove might be the best brand for this new hand sanitizing gel. There is also a proposal to launch this under the Vaseline brand, which is more of a functional brand. In your opinion, which brand would be a better fit for this new product? Using the appropriate framework discussed in class, please explain the reasoning behind your recommendation