Across each attribute, which is the most preferred level, and why?

marketing

Description

Question 1: Firm ABC sells smartphones in emerging markets (e.g., India, China, Brazil). They are seeing intense competition from both high-end and low-end competitors, due to the rapidly changing telecom market. To improve their competitive marketing strategy, they performed a conjoint based analytics exercise. They obtained conjoint data based on a few key smartphone attributes, i.e. display, storage, price, promotional data plan, and warranty length. The conjoint partworths are given to you in Table 1 below. Please answer the following questions, based on the partworths.

n  Across each attribute, which is the most preferred level, and why?

n  Which attribute is the most important to the purchase decision?

n  Is the promotional data plan (for which ABC pays $50/GB to the carrier partner) worth giving away for free?

n  Provide one product design (i.e. combination of attributes) that will go with a medium price product. Justify based on the partworths.

n  Provide one product design (i.e. combination of attributes) that will go with a high price product. Justify based on the partworths.

Table 1. Conjoint Partworths

Attribute

Level

Partworth

Display

4.7''

-2

5.4''

3.4

Price

$300

11

$450

3

$550

-11

Storage

4 GB

0

16 GB

2.6

32 GB

7.9

Promotional Data Plan

2 GB

3

3 GB

11

6 GB

16

Warranty

6 months

-2

1 year

3

3 years

5.1


 

Question 2:  Firm ABC seeks to make pricing and advertising decisions every quarter based on how market demand responds to their marketing resources, and not just through gut feeling. They put together aggregate data on the sales of their products, along with their average price and advertising, over many months. The data on sales (Final Assignment Response Model), together with advertising and price, is attached. Build a log-log response model using the data, and answer the following questions:

n  Run a base response model (Model 1) with just price and advertising as covariates and provide the R-squared, VIFs, price and advertising coefficient.

n  Add competitive advertising to the model (Model 2), and the R-squared, VIFs, price and advertising coefficient.

n  Add a time trend to the above model (Model 3) and the R-squared, VIFs, price and advertising coefficient.

n  How does price elasticity change from Model 1 and Model 3?

n  How does advertising elasticity change from Model 1 and Model 3? 

Instruction Files
hw1.docx
21.8 KB

Related Questions in marketing category