Light Up My Life (LUML) Lighting is a manufacturer of low-energy lightbulbs for consumers. They are getting ready to launch their new product, a LED bulb which uses only 10% of the energy of a traditional bulb. Their initial entry will be in the Czech Republic, a market that consists of approximately 4.3 million households. Based on their test market, they anticipate achieving ACV of 52%, awareness of 41%, and a trial rate of 26%. Of those who try the new bulb, results from the test market indicate 49% of those trying it will buy an additional 10 bulbs during the coming year. The bulbs generate a margin of 1.00 Euros each. LUML is planning on spending 760 thousand Euros in marketing expenditures in support of the LED bulb to achieve these goals.

Debbie Boone, the Czech Country Manager for LUML, is considering adding a Point of Purchase (POP) end-aisle display for two of the largest chain stores. She estimates that this will improve the trial rate to 45% overall and the displays and other costs associated with the effort are expected to run approximately 200,000 Euros. What is the net contribution of the POP end-aisle display?

CALCULATED VARIABLES:
netcontrib = 646,312
totalbulbs = 1,406,312
trialbulbs = 238,358

Answer rating: 100% (QA)

In view of the abovementioned problem New market test results include Market ... View the full answer