The objective of this assignment is to test your understanding in the learning outcome (LO2) and learning outcome (LO3) and learning outcome (LO4).
1) This is a grouped assignment maximum of 3 students.
2) The printed-out assignment must be submitted on the stated deadline before 5 p.m. to your respective lecturer's office.
3) Be sure to include the Assignment Cover Sheet which has been signed by you. A penalty of 10% will apply for each day thereafter unless an extension of time has been granted by your respective lecturer before the due date.
4) The assignment must be typed written in a report format. Handwritten or soft copy assignment is not acceptable. There is no restriction on the number of pages, font type, font size etc. You may include relevant Excel tables, graphs and charts if necessary. The quality of report presentation should be worthy of submission to your employer or project manager. Some marks will be deducted for submitting a sloppy report.
5) Any computations or formulae used to answer the questions should be attached in the appendix. Focus on interpretation of the findings and less on showing how the computation is done (though you need evidence to back it up).
You and your team have been hired as strategic consultants by the hugely successful retailer known as "Cutie Pie". The company sells many products, although one product in particular, a highly innovative car seat, is "Cutie Pie" has hired you to help them better understand the test market data they have compiled from 400 retailers worldwide (found in the excel file called "Cutie Pie.xls"). The variables in the data set include:
Unit Sales = the number of units sold (in thousands),
Competitor's Price = the price for a similar product being sold by a competitor (in RM),
Income Level = average household income in the region (in thousands of RM),
Advertising = amount spent on advertising the product (in thousands of RM),
Price = the price being charged by the retailer (in dollars),
Population = number of people (in thousands) living in the region,
Average Age = average age of the population in the region (in years),
Average Education = average educational level in region,
Shelving Location = quality of the shelf location for the product (good, medium, or bad), Urban or
Rural = description of the region as urban or rural,
Msia = a categorical variable indicating whether the sales region is in the Malaysia or an international market.
Question
Describe how statistical techniques can be applied in marketing segmentation.
Run a multiple regression model with Unit Sales as the dependent variable against all of the available predictor variables, and use that model (available in the "Cutie Pie.xls") to answer the questions below. Use = 0.10 where it is applicable.
a) Which independent variables appear to be important predictors of sales? Why?
b) Which are not? Explain why.
c) If it costs RM80 to produce each car seat, and advertising RM spent represents the only additional variable cost associated with producing this product, what would be the effect of increasing the price you charge for each seat at retail, by RM10? Explain.
d) Some of the international managers feel that the product is not viewed favorably outside Malaysia, what should you tell those managers? Use the following table to assist in your explanation.