Assuming that you are an intern working under a supervision of a Marketing Manager of a company that produces personal care products. You have been tasked by your boss to evaluate the feasibility of introducing adult disposable diapers brand-named as “DYPEX” in order to capitalize on the growing demand for the product among the old-age adults. This is especially true for those who have “difficulties” in urinating, a phenomenon referred to as incontinence.
You gathered some secondary data to assist you in answering the sub-question (a) and (b) below. You then show each step of your calculations to arrive at the solutions.
(NOTE: please round-up the answers to the nearest RM Million. You are not allowed to use calculator for this task).
(a) Given the following facts, you are required to establish the market size for adult disposable diapers in terms of volume (pieces) and value (RM):
(i) Malaysian old-age adult population: 8 million.
(ii) percentage of usage penetration of adult disposable diapers: 50%
(iii) quantity of adult disposable diapers used per day: 3 pieces.
(iv) manufacturers’ selling price: RM 1.50 per piece.
(v) there are 52 weeks or 364 days in a year
(b) Prepare a one-year Income Statement to establish the potential Net Profit/Loss After Tax for this new product assuming the following:
(i) the first-year market share in terms of value: 10%.
(ii) the cost of goods as a percentage of total sales: 40%.
(iii) the advertising expense: RM 20 million.
(iv) the sales promotion expense: RM 14 million
(v) the corporate tax rate: 25%.