Zoecon
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1. How would you characterize the Premise Insecticide Market? (Hint: Size, growth, profitability, regionality, seasonality, competitors, distribution, promotion, applications, treatments by segment).
Consumer Market:
Packaged in easy-to-use, do-it-yourself containers mostly sold in supermarkets
Estimated annual sales in 1985 was $400 million at manufacturers' prices; Sales forecasted to grow at an average rate of 10% per year through 1990
Competition:
-S.C. Johnson and Son, Inc = 45% of market with Raid
-Boyle-Midway Division of American Home Products = 12% of market
with Black Flag
-D-Con = 10% of market
**No other company had a market share greater than 8%
Distribution:
-Supermarkets = 70% of insecticide sales
-Drug Stores = 9%
-Other retailers such as home improvement centers and house and garden outlets = 21%
Types:
-Aerosol sprays including foggers = 74%
-Liquid Sprays = 14%
-Solids, strips, pastes, traps, and baits = 12%
Insect Specific:
-Ant and Roach = 40%
-Flying Insect = 20 %
-Flea = 11%
-Other = 29%
Household insecticide sales were seasonal and varied by geography
-Six-month period from May through October = 75% of sales
-Southern tier of 14 states = 50% of annual sales
Heavily promoted--$26.8 million for magazine, newspaper, TV, radio and outdoor advertising in 1983
Professional Market:
Consists of sales of insecticides, often in diluted form, to professional applicators.
Revenues of $2.5 billion in 1985; revenues forecasted to be $3.7 billion in 1990; Growth rate of 8%
Types:
-General insect control (Roach, ant ,flea) = 52% of revenues
-Termite control = 21 %
-Specialty pest control applications (rodents) = 27%
Competition:
-Dominated by small PCOs; estimated 14,000 (only 2 with sales greater than $100 millionOrkin and Terminix)
-28 PCOs had annual sales greater than $3 million
-6,000 had revenues under $50,000 annually
Distribution:
-Distributors purchase insecticides in bulk quantities from producers and sell them to PCOs in smaller quantities
-Distributors have a gross margin of 27% on the selling price to PCOs
-Producers average gross margin is 55%
Promotion:
-Producer marketing expenses small
-27% of sales spent for marketing to PCOs
-Mostly for trade advertising and sales efforts
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