General Manager, Transactional Data - Assignment Example

Assessment Name: Tutor: Course: Date: Question 1 The General Manager in your company has a background in economics and has suggested that in your product category the brands with lower market shares will have higher average prices but as a Marketer Analyst you might not agree. Data set 1 provides information on the sales of the brands in the category over a period of time. Do these data support the General Manager’s proposition? Apply the principles of data reduction to the data for Q1 to build a reasonable argument to convince the General Manager about the correctness of your judgment. In the competitive market, each brand of a product has market share. This is dependent on the consumer satisfaction derived from the consumption of that product. Each businessman strives to ensure that their products attain the largest market share. This is because market share and volume of shares have a directly proportional relationship. This implies that the larger the market share, the more the product is purchased by consumers. It also implies that the demand for the product is relatively high. The law of demand states that as the demand of a product rises, the price of the product decreases ceteris paribus (holding all other things constant). The law of demand forms the basis of almost all microeconomic decisions. Therefore, the general manager would form his decision on the basis of the law of demand (Pride and Ferrell, 2008, p.76). An analysis of data set one does not necessarily agree with the law of demand. This is because in practice, it is arguably impossible to hold all other factors affecting demand constant. This implies that this law of demand does stand if the condition of ceteris paribus is not adequately fulfilled. Whilst interpreting data that has a wide range of values form x1 to xn, only a sample is used as a representation. Statistical analysis is effectively done using the various principles of data reduction. This is implies that if the data or the number values between x1 to xn is too large; it may be difficult to analyze the data. This necessitates the need to use any of the principles of data reduction in order to use lesser values in drawing the necessary conclusions of a parameter θ. The sample used is to represent all the features accrued to the entire data. Data reduction ensures that it reports information such that T (x) = t. There are three principles of data reduction. They are: The Sufficiency Principle- This principle of data reduction seeks to ensure that no information is discarded (from the θ) while summarizing the entire parameter. The Likelihood Principle- This principle utilizes a function of the given parameter that is realized through observation of a sample. This function is such that it contains all the information that can be derived from the given sample, θ. The Equivariance Principle- This principle also seeks to ensure that it retains significant features of the model that is being analyzed. There are certain conditions that must be met in order to choose the principle to apply in the analysis of data provided. In any problem, there are numerous adequate statistics. For instance, 1. It is constantly true that the entire sample, X, is a sufficient statistic. 2. Whichever one-to-one function of an adequate statistic is also a sufficient statistic. It should be noted that the aim of a sufficient statistic is to attain data reduction without trouncing of ideas regarding the parameter θ. Therefore, a statistic that attains the most data reduction at the same time as still keeping all the information about θ may be well thought-out to be preferable (Clampitt, 2009, p.118). The sufficiency principle would be used in the determination of how the various brands of the products are fairing in the market. From a general view of the available statistic, a general comparison of the product Ariel and Carrefour depicts that the general manager’s assumption on the basis of microeconomic theory is not true. This is because of the following (from Data Set 1) Product Market Share Price averaged over all sales Ariel 0.11677 12.705 Carrefour 0.10509 6.2209 Auchan 0.011911 10.241 Axion 0.001956 5.063 Le Chat 0.047741 10.944 From the table above, certain things are evidently clear. For instance, the data is an indication that the law of demand could be referred to as being ideal. This implies that it is not depicted by the values that we derive in the business world. This is based on the fact that it is impossible to hold other factors constant. Therefore, this assumption could be termed as being farfetched. For instance, a comparison between Ariel and Carrefour indicates that Ariel has a larger market share than Carrefour (0.11677>0.10509). However, the price of Ariel is greater than that of Carrefour (12.705>6.2209). This implies that the law of demand does not stand in this case. This is because it would have implied that an increase in demand of Ariel; which led to a larger market share, should have subsequently led to an decrease in price. Question 2 Data set 2 provides transactional data. It is the purchases by consumers of the brands in a category over a period of time. Do these data show any evidence of the double jeopardy phenomenon? Explain. What market implications can you think about by observing these data? Explain. The double jeopardy phenomenon is a principle that states that a large brand is large because it has many buyers who buy it. On the other hand, a small brand remains small because it has very few people who buy it. This phenomenon is persistent in all brands and in each and every category. These varieties of brands are largely similar and their differences can hardly be identified (Franzen & Moriarty, p.368). This phenomenon greatly contributes to large market share of the product in the market. The popularity of a product is also said to contribute to the market share of a product. The double jeopardy phenomenon has the effect of affecting the consumers’ purchasing behaviour in regards to the product. It also affects the consumer attitudes towards small brands and the overall brand loyalty that is depicted by consumers. This phenomenon tends to ensure that the small brands never grow since they are hardly noticed (Tansky & Heneman, 2006, p. 71). In reference to data set 2, double jeopardy phenomenon is depicted. This is because there certain brands of juice that are hardly bought. However, there are others that have very many loyal consumers. This could be greatly attributed to this double jeopardy phenomenon. This is despite the fact that the satisfaction derived from taking whichever brand of juice is relatively the same. The difference in choice could be attributed to flavours and popularity of particular brands. The study involved 35 brands of juices as purchased by 3459 consumers. An analysis of the data indicates that brand 1 to brand 7 is hardly purchased by the consumers from whom the study was carried out. However, it is also evident that brands 8 to brand 14 are popular and display a large market share in reference to the whole market. The market share of a brand of juice as shown in data set 3 is dependent on the penetration of the brand into the market. This is such that the brands with minimal penetration have small market share, those with average penetration have medium market share while those with high penetration have large market share (Bogardus, 2004, p.87). This can be represented as follows: Double jeopardy phenomenon creates the need for firm to adverse their brands. This ensures that the small brands become known to the consumers such that they are now able to purchase them. The marketing mix is referred to do in order to market the product in the manner that it will attract more consumers and probably lead to more brand loyalty. The marketing mix involves the product, pricing, place and distribution and promotion. Focusing on these aspects of the products will ensure that the brand captures the interest of consumers. This will do to enhance the following: Product The brand being marketed could deal in a range of benefits that consumers are bound to derive from the consumption of the product. These brands are necessitated by the demands from the people around the market as well as the culture and the changing lifestyles. They should be able to determine the kinds of flavours that the natives prefer. This then forms the basis of the juices that they are going to serve. Consideration of the heath watch and the diets that people around the region have adapted should be visible in the marketing strategies. This will ensure that their lifestyles and the juices sold do complement each other. It is important to note that the consumers will only be interested in the brand if it can offer them the services that they need. This implies that marketing without following the stipulations or expectations of consumers in the products presented to them will not be fruitful. This is because it is the core marketer. This is given the fact that utility is highly dependent on the consumer. Therefore, the brand must maximize on the use of the juices that are presented in the market. This is because if the products served are of high quality, the customer will not need to be told to come back, they will do so voluntarily. Moreover, they are likely to spread the news of the brands to their friends and families. This will gradually increase the pool of customers for the hotel and consumer loyalty. Pricing Pricing is the most important element of marketing mix. This is because it is the price that determines the final turnover of the organizations and hence profitability or losses may be realized. The other three are just adding up to the cost of business operations. It is, therefore, important to note that for a company to be successful, price has to support all the elements of mix. Prices should also be determined by prices in the market. Charging very high prices will not benefit the brand. This is because there is likely to be a decrease in the volumes of customers who purchases the brands of juice. However, this does not imply that the brand should charge extremely low prices. This is because determination of prices should be dependent on the elasticity of these prices in the market. This implies that if the market is inelastic, a small decrease in price will cause a minimal change in the volumes of customers purchasing the product. On the other hand, if the market is elastic, a small change in price will cause a relatively high change in the volumes of sales. Therefore, if the market is elastic, lowering prices would lead to increased revenue. This will be a marketing strategy because consumers are likely to purchase the brand of juice due to the sole purpose of low prices. This coupled with quality service provision would be a stepping stone for the brand of juice to scale to high heights of successes. If the market is inelastic, an increase in prices would be hardly noticeable. This implies that this could be used in order to increase revenue. Place and distribution The location of the brand of juice in terms of the outlets from which it is sold should be accessible and in a busy area. This implies that the brand should be strategically located with a target of particular customers. For instance, in could be located in the central business districts targeting the people working in offices. It could be near a recreational area. This will ensure that there is a target market already existing when the brand is introduced. This will also create the ease with which people learn of its existence and exuberant services. The brand should also enhance services such delivery services. This will be beneficial since the services are mobile. This could increase sales and revenue because people are likely to place many orders when they cannot conveniently reach the outlets from which the brand of juice is sold from. The brand should also seek to expand further by opening branches in other regions. This could lead to diversity as they try to please and meet the needs of the different consumers defined by the different flavours. This could spice up business as profit margins increase because the different customers could lead to the establishment of new products in terms of variety of flavours. This could interest the open-minded customers who may be willing to try out something new. Also, diversity ensures that the brand is in a position to meet a range of the consumer needs. Diversity in the different kinds of consumers also increases the pool of ideas from people from different regions. It creates the need for the marketing manager to compile all these needs into quality and diverse products and services. Eventually, the brand of juice will benefit greatly in the achievement of its goals and objectives. This would lead to an increase in consumer loyalty and a large market share. Promotion Promotion of the brand and is products is a key part of the marketing process. This is because it will ensure that the people who have not had the chance to learn about it existence and the range of products that it presents. Moreover, once they hear about it and try it, they are likely to increase the market share because of the quality service provision that is highly maintained. This will also increase the revenues and profit margins. The inclusion of advertisements and leaflets handed in to customers after their purchases is also a good marketing strategy. This will ensure that they are well aware of all the products and services available. They will be in a position to tell their friends and families of the same. Advertisements could also be placed on televisions and radios. These could be placed during broadcasting so as to get the attention of the consumers. It would also be strategic to include posters and display all contact information. A website displaying all the available products and services available could also be made available. This could capture the international consumers (Aswathappa & Dash, 2002). However, it should be noted that making marketing strategy decisions for a marketing manager is not an easy task. In fact, the organization should carefully choose a suitable candidate for the managerial post (Jackson and Mathis 2007). This is because there are numerous challenges that the manager will have to go through. Therefore, it is important to well aware of the challenges waiting as discussed below. The biggest challenge that new marketing managers face include the pressures that they are subjected to. These pressures could be due to the competition in the market where there are already established companies. Consumers also tend to stick to the older companies due to loyalty. There is also the fear of the risks involved in terms of quality. Some consumers will not be willing to try out new products from new companies. This therefore results in low sales yet the company’s expectations are huge sales so as to increase revenues and also meet their optimum goal of maximizing profits. The manager is faced with the problem of meeting the goals and expectations of the company. The manager can identify the root of the problem as being poor criterion applied in carrying out the marketing process. This could also be due to ignored risks factors and hence resulting in different results from the expected results. The problems could also be the coordination of activities between the manager and his subordinates. This therefore means that the set goals are not achieved. If the strategies that are meant to be applied are not well communicated, it could result in failure in achievement of the ultimate goal. The problem could also be emerging from the superiors. This could be due to unnecessary pressure or setting of ideal objectives. If the goals set are not achievable, it becomes impossible to achieve them irrespective of how hard they try. the superiors could also be leaving the managers on their own without offering them any help. This means that some unclear issues are not clarified. The managers are faced with lack of morale if they are not achieving the set goals and as a result, the same lack of morale is passed onto the subordinates The problems could be both long term and short term. Short term problems are at the initial stage for example, when introducing the product in the market, there could be resistance from the consumers before they get to know the product. Lack of morale is also a short term problem that ends as soon as the volumes of sales start increasing. Long term problems include the competition from already established companies that are already prosperous in the market. Competition will always exist since each businessman wants to maximize profits (Dale, 1999, p.56). Enhancing marketing strategies to the effect that the product is well known to the consumers ensures that the double jeopardy phenomenon is taken care of. This ensures that its effects are dealt with such that they are not a hindrance to how the brand performs and is received in the market. This will ensure that anomalies such as those depicted for the brands 1 to 7 in the data set 2 are not experienced. This prevents the continued redundancy of a product because of the fact that it is a small brand or a new brand (Hanson, 2007, p.98). Question 3 Data set 3 gives the results of a discrete choice experiment using the same design as discussed in lectures. There are three attributes – bag size (small/big), brand (Gucci/Prada), and price ($300/$500) – and two levels per attribute as given. Analyse the data. Estimate the partworths. Assume there are two competitor products already on the market (i) a small Prada bag sold at $500, (ii) big Gucci bag sold at $300. Your company does not have a product on the market but is about to launch one. Develop recommendations on the attribute structure the product should have. Give your reasons. Remember, you do not have information on costs and so cannot develop final recommendations. When introducing new products in the market, an analysis of the existing products in the market must be made. This is done so as to establish the market gap that exists. The marketing research is carried out using conjoint analysis to determine the consumer needs in the market. The determination of the features that consumers are willing to pay is done using partworths. From the features available in the market, the consumer is in a position to choose those that will attract customers. In each and every company or firm, there must be an employee schedule that clearly defines the responsibility of each employee. The schedule also ensures that there is no chaos on who is meant to do what. It also reduces blame game because in case of mishap there is someone who is directly accountable. It reduces ambiguity and laziness (Shim & Siegel, 1998, p. 231). It also ensures that the product is innovative. Data must also be collected in such a way that it meets the needs of the target market. The costs incurred must also be considered. The product should be such that it has competitive advantage over the existing brands in the market. In choosing the best solution for a company, there are several factors that need to be considered. The time that will be used in the implementation process is a major concern. If the timeline is too long, it implies that the decision will not be profitable to the firm. Much as in the long run the decision will benefit the firm, the benefits may be too small to be considered. If the limitations outweigh the benefits, the manager should implement the particular decision. Current products in the market I would recommend that the product to be introduced in the market should be a medium bag with a catchy brand name to ensure that the sales are not affected by double jeopardy phenomenon. It should be sold at a price of $400. This will ensure that customers find the bag that they can use at any particular time. This is because it can hold almost everything that they need. This price is competitive and will attract many customers (Jackson and Robert, 2007, p.92). Having analysed all the responsibilities that are in the hands of any manager, including a marketing manager, a strategy that ensures that both parties’ needs are catered for must be developed. There needs to be a solution on who is to be held responsible in the event that a decision is made and as result things do not go as planned. This will ensure that the restaurant or any other enterprise remains successful. References Aswathappa, G., & Dash, K., 2007, International Resource Management Mexico: Tata McGraw- Hill. Bogardus, M., 2004, A Human resource jumpstart. London: John Wiley and Sons. Clampitt, G. P., 2009, Communicating for managerial effectiveness: problems, strategies, solutions, New York: SAGE. Dale, E., 1999, Management: theory and practice. Metro Manila: Rex Bookstore, Inc. Franzen, G., & Moriarty, S., 2008. The Science and Art of Branding. New York: M.E. Sharpe. Hanson, H., 2007, A Managerial problems in public enterprises, Michigan, Asia Pub. House. Jackson, J. and Robert L., 2007, Human Resource Management, New York: Cengage Learning. Pride, W. and Ferrell, T., 2008, Marketing Express. New York: Cengage Learning. Shim, K. J., & Siegel, G. J., 1998, Schaum’s theory and problems of managerial accounting Mexico: McGraw-Hill Professional. Tansky, W. J., & Heneman, L. R., 2006, Human resource strategies for the high growth entrepreneurial firm, London: IAP. Read More