Submitted by: Submitted by msstelz
Views: 416
Words: 269
Pages: 2
Category: Business and Industry
Date Submitted: 11/03/2011 10:10 AM
Background
Since 1983, Zoecon Corporation has been selling animal health related products, and pest control chemicals. The company has successfully recorded $100 million in sales, and enjoys a 25 percent pretax profit on sales. The company stays strong in the Professional Pest Control market (PCOs), but the company is considering expanding into the consumer-market sector. In order to do so, option one suggests investment on a new product called Strike Roach Ender to expand its distribution to a 19 city area. Second option is to stay within the company’s comfort zone: the PCOs market. Third option is to sell hydroprene under GENCOR brand, an IGR that is useful for preventing normal cockroach maturation to competitors, such as d-Con, Black Flag or Raid. A decision needs to be made quickly.
Industry Analysis
The consumer market generated $400 million in sales in 1985with a forecasted growth rate of 10 percent per year through 1990. Strong competitors like Raid, Black Flag, and d-Con take a total of 67 percent of the market share already. If Zoecon wants to expand in this market, it will face great risks with strong competitors. The PCOs market generated $2.5 billion in sales in 1985 with a forecasted growth rate of 8%. Also, if Zoecon wants to continue to stay in this market, marketing expenses (27% of sales) will be cheaper compared to the consumer market. However compared with other pesticides, GENCOR is appealing to customers because it not only kills roaches, it can also destroy its reproductive cycle. Also, PRECOR sold well in supermarkets without adulticide, then hydroprene under GENCOR will