Part A
DEPARTMENT OF MANAGEMENT SCIENCE MARKETING ANALYSIS & MODELLING – MSCI 582 – 2018/2019 Coursework
Incredible Brews Ltd has developed a new type of drink. Their product is synthetic and simulates alcohol taste without its adverse effects. State has approved selling the product. Incredible Brews Ltd needs to decide on the looks and the texture of the drink. Being fully synthetic it is easy for the R&D department to change the simulated ABV%, the drink’s colour, body, bitterness, smokyness, aroma and how carbonated it is. Also they can control the amount of calories in the drink up to a certain extend. As this is a completely new product it is hard to know what the consumers prefer. Initial market research has shown that the drink will be perceived as similar to beers.
The marketing department has collected information on beers available in the market. They want you, given the available data (Competition Data spreadsheet), to help them understand the potential competition in the market. Assist them in understanding the positioning of the competitors in the market. Is there “space” in the market for such a new product? Discuss on potential product mixes that might be desirable (provide approximate product characteristics) and what would be the implications for competition.
Note: You may have no or very limited personal experience of the product of Incredible Brews Ltd. This is up to a point to be expected! If you go in this sort of business it is possible that you will end up marketing products you do not use. However, some research on the products may still be useful.
Part B
The product was launched successfully. Sales picked up fast and tempted other companies to enter in the market of the new drink, as well as traditional beer brewers to step up the competition efforts. This has squeezed the market share of Incredible Brews Ltd which has resorted to an aggressive promotional campaign. They have provided you with weekly sales data (Sales Weekly spreadsheet, use the sales series with your id). In the same dataset they have indicated when there is promotional activity and provided the weekly price of their products.
They want you to focus on the analysis of the sales of their beer. They have provided you with the timing of the two different promotions they run. The first promotion (Promo1) is regarded as a huge success, with massive uplift on the sales. It costs £40,000 every week they run it. The second promotion (Promo2) has mediocre returns, but it is relatively cheap, costing only £2,000 per week. Furthermore, they have provided you with historic sales prices (Price1). They have been changing it over time, trying to estimate what is the price elasticity of the sales.
Furthermore, they have provided you with the prices (Price2) and sales (Crisps) of their second product, synthetic crisps, in case it is relevant. That product has some promotions running, but
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the company representatives never recorded them. They think that the beer and crisps could be connected somehow. Finally, they have spent a lot of time and managed to gather the data on the prices (Price3) and the promotions (Promo3) on their main competitor’s product, semi- synthetic beer. They have even planted a spy in the competing company and have stolen the historical actual sales of the product (Competitor) and the plans on prices and promotions for the upcoming next 13 weeks. Don’t forget that you have signed the Non-Disclosure Agreement, so you cannot share this information with anyone outside of the company. If you do, their lawyers will destroy you.
Incredible Brews Ltd wants you to help them on the following tasks:
Understand the impact of each promotion. Are they useful / profitable? Should they have more promotions? What type of promotion should be preferred? Are promotions necessary for their product?
Understand the impact of prices. Does the demand on their product have high or low price elasticity? Did the recent changes in prices have a negative or positive effect on sales? Should they raise or lower the prices? What should be the pricing strategy of their crisps? What about the impact of the pricing of the competitor on their sales?
Predict the demand for their beer for the next 13 weeks. If you suggest any changes to either their prices or promotions provide predictions with the suggested changes as well and explain clearly why they should make these changes. Assume that you do not have budget constraints.
Note: The demand planning team has told you that there may be a seasonal sales effect (e.g. summer / winter).
About the report
Provide your findings in a short business report. The report should be tailored for decision makers with adequate understanding of statistics and marketing analysis and modelling (you should use technical terms when necessary, however you are not expected to explain what are the methods you are using, for instance you do not need to explain what is regression). Your analysis should be adequately documented and you should explain how you have manipulated / processed the data and why you have selected one model or another. Note that the report should include an executive summary for the whole work, summarising the main findings and implications. The words count should be between 2000 and 3000 words. Be concise with your answers. Include statistical tables and figures if necessary, but only if they add to your arguments! Table of contents and appendix do not count against your words limit, however they are not needed.
You will be assessed on the clarity of your report. Good structure and use of language are expected. Make sure that your arguments are clear and that they answer the questions fully. Remember, companies are not always fully aware of their problems, so they may not ask exactly the right questions. However, they expect the report they get on their hands to answer
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all the right questions, clearly and with adequate evidence. Use references only if they are needed to support your arguments / analysis. We do not need to see references for the sake of having them!
Marks for the tasks
The marks are distributed the following way between the tasks:
1. Part A – 30%;
2. Part B – 40%;
3. Executive summary – 15%;
4. Quality of the report – 15%.
Deadline: 18 March 2019 10:00
Good luck!
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