Assignment 2
Advanced Marketing Analytics Team Assignment
The assignment has three questions.
Question 1
Suppose you are the marketing analyst for a skincare company. The company owns brand 1 in this category. The company wants to grow this brand market share by 5 percentage points next year. You have been given a data set of 2500 shoppers, which reports for each shopper his/her purchases of a set of brands over one year (data for Q1). Complete the tasks below:
Calculate market share, penetration, and purchase frequency for each brand. Comment on the patterns of brand growth in this category.
Fit the Dirichlet model to the data and discuss the overall fit of the model.
What can you tell about consumer buying behavior in this category?
How does your brand perform compared to the Dirichlet model estimations?
What would be reasonable targets of penetration and purchase frequency if you want to increase your brand market share by 5 percentage points?
Discuss potential marketing activity that you can use to achieve the targets.
Question 2
Suppose you are the marketing analyst for an online cookware store. Your store manager has recently looked at the aggregate purchasing data in two periods and found that there is an increase in sales from previous non-buyers of the brand, from 0 units to 105 units (16% of the total sales). However, there is no increase in the total sales from period 1 to period 2. She believes that this is due to a poor performance in sales from existing buyers, especially the heavy buyers. She therefore suggests that the online store should invest more in customer loyalty activity, in order to retain the heavy buyers. She also believes that the 16% increase in sales from previous non-buyers is a success, hence there is no need to invest more in customer acquisition activity.
As the marketing analyst you know that there is always some natural variation from period to period in purchases. Apply the conditional trend analysis to the full data set (data for question 2). Present your findings to the store manager. Advise her if her beliefs are supported by your analysis. Discuss the managerial implications of the findings.
Question 3
Suppose you are the marketing analyst for a grocery retailer selling almond milk. The retailer wants to find out the consumer preference of different attributes of an almond milk product including product type, brand type and price. The retailer also wants to introduce to the market a new almond milk product which is a combination of these attributes.
Your research team has already conducted a Choice-Based Conjoint study from 1400 respondents for three attributes, each has two levels:
Product type: Regular and Organic
Brand type: Store brand and National brand
Price: $3 and $5
Your team needs you to do some analysis (data for Q3).
Undertake a conjoint analysis, completing all the tasks below.
Calculate the partworths for changing product type from Regular to Organic (b1), changing brand type from Store brand to National brand (b2), and changing price from $3 to $5 (b3).
Convert the partworths to dollar values for Organic product, and National brand. Interpret the results.
Calculate the choice probabilities for all eight alternatives. Discuss the limitations of this method to estimate market shares.
In the current market, only four alternatives, 2, 4, 7 and 8, are available.
Re-estimate the market shares for these four alternatives.
The retailer is considering adding into this market with one of the remaining alternatives (1, 3, 5 or 6). Determine which alternative is the best for the retailer to add to the market by calculating the new market shares after the addition of each new alternative. Discuss the potential impact of the new alternative on the existing market shares.
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