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- Nestlé has a variety of big data analysts in their headquarters back in Vevey, Switzerland. One enterprising analyst, comparing sales performance of various product lines between different types of countries, notices what appears to be a recurring anomaly. More precisely, he discovers that even though the GDP per capita report for a country might be low to extremely low, grassroots data on actual sales levels and trends in those markets, such as in Mozambique, Guatemala, Zambia, Cambodia, indicate surprisingly robust demand for the sorts of food products that Nestlé makes. In trying to reduce the variance, the analyst runs and reruns the data, but cannot resolve the problem. In frustration, he consults a colleague, asking what she thinks might be going on with his data. She immediately concurs with his outlook—that is, if we were to stick with the officially reported GDP per capita data, Nestlé would wisely would postpone expanding into many of these countries. Alternatively, she…Jenny’s Stores is a retail chain with 150 outlets throughout North and South America. Faced with falling profit margins, the company is contemplating launching its own private brand that would reduce costs, improve margins, and allow it to pass on some of these benefits to its consumers. *** Question | Which of the following, if true, would most strengthen the argument for launching private brands? A) Most customers visiting Jenny’s Stores are loyal to existing national brands. B) The economy has started to improve, and consumer spending is increasing. C) Customers at Jenny’s Store are likely to become more price-conscious over the next few years. D) The company enjoys good relations with the suppliers and manufacturers of the brands that it sells in its stores. E) The stores enjoy high visibility and attract foot traffic well.Over the years, the food company Nestle’s Maggi Noddles which are high marketshare with low growth markets. The company with a market share of 80-85 %, MaggiNoddles holds a very strong hold in the market and have high customer loyalty. Theproduct requires very less investment to maintain its market share and fight off anycompetition.In the case of Nestle, Nestle’s Mineral Water and Nestle’s Nescafe Coffee fall inthe high market share in high growth industry. Growing healthier lifestyle trends andemerging markets have prompted the brand to invest large amounts of investments inorder to differentiate the bottled water brands from competitors in mature markets andgrow brand awareness in emerging markets.There are products that formulate a part of the industry that is still in the phase ofdevelopment, yet the organization has not been able to create a significant position inthat industry. The small market share obtained by the organization makes the futureoutlook for the product uncertain,…
- In a study of the domestic market share of three major automobile manufacturers A, B and C in a certain country, it was found out that of the customers who bought a car manufactured by A, 75% would again buy a car manufactured by A, 15% would buy a car manufactured by B and the rest wouldbuyacarmanufacturedbyC.OfthecustomerswhoboughtacarmanufacturedbyB,90% would again buy a car manufactured by B, 5% would buy a car manufactured by A and the rest would buy a car manufactured by C. Of the customers who bought a car manufactured by C, 85% would again buy a car manufactured by C, 5% would buy a car manufactured by A and the rest would buy a car manufactured by B. Required The long run market share of the manufacturersCitronel is a French company that markets a range of fashionable clothing to French consumers under its widely known brand name. The company wants to begin marketing its products worldwide and needs to decide on the most effective and profitable strategy. Citronel's CEO thinks that a market segment already exists worldwide that will be receptive to Citronel's product line. Which of the following, if true, would strengthen the CEO's position? A) Citronel has accumulated extensive market data on French consumers. B) Citronel has been in business for only a few years. C) People in different parts of the world tend to embrace their own clothing fashions. D) Consumers in different parts of the world have varied spending power. E) Clothing fashions that originate in France tend to appeal to different places in the world.Citronel is a French company that markets a range of fashionable clothing to French consumers, under its own brand name. The company wants to begin marketing its products worldwide, and needs to decide on the most effective and profitable strategy.Citronel’s CEO thinks that a market segment already exists worldwide that will be receptive to Citronel’s product line. Which of the following, if true, would strengthen the CEO’s position? A) Clothing fashions that originate in France tend to appeal to many different consumers around the world. B) Citronel has been in business for only a few years. C) People in different parts of the world tend to embrace their own clothing fashions. D) Citronel has accumulated extensive market data on French consumers. E) Consumers in different parts of the world have varied spending power.
- Drug companies in the United States are granted a patent on any new pharmaceutical drug they develop, which gives them a monopoly on that drug for 20 years. Not surprisingly, high monopoly profits (i.e., profits well beyond the average rate of profits in other industries) are characteristics of the pharmaceutical industry. In a 2003 study entitled The Other Drug War II, Public Citizen’s Congress Watch noted that during the 1970s and 1980s, drug companies in the Fortune 500 had average profits rates (i.e., as a percent of revenues) that were double the average for all other industries in the Fortune 500. During the 1990s drug company profits rates averaged 4 times the average profits rates of all other industries, and during the first 5 years of the twenty-first century, drug company profit rates were about 3 times the rates of other industries. According to the U.S. Census Bureau’s Quarterly Financial Reports, in the first quarter of 2007 and 2008, average drug company profit rates…You are the Economic Consultant for Zuku Farms Ghana Limited. Zuku produces cowpea in a community where producers are able to switch back and forth between cowpea and groundnut depending on market conditions. Consequently, you were tasked by the management of Zuku and you estimated the demand function for cowpea as follows: where is the quantity of cowpea demanded in bags per month, is the average price of cowpea in Ghana Cedis, is the average price of groundnut in Ghana Cedis, and Y is the income of consumers. Assuming is initially GH¢31.00 per bag, Y is GH¢1001.50 Required: Find the resulting demand function for cowpea and determine the number of bags Zuku can sell at GH¢ 45.00 per bag. Management is considering increasing price of cowpea by GH¢10.00 per bag. Advise management on this price change using the concept of price elasticity of demand. Explain why management should be worried about a reduction in the price of groundnutDuring the early 1990s, Hoover was faced with a period of economic recession in which discretionary expenditure on consumer durables was held back. In these conditions, most vacuum sales were replacements for worn out machines or first-time buys for people setting up home. The challenge was to increase the sales of machines bought to upgrade existing equipment. The company came up with the idea of offering free airline tickets to America for anybody buying one of its vacuum cleaners. For many people, a holiday in the USA may have been perceived as an unnecessary and unaffordable luxury during a period of recession, but one that might be justified if it came free with the purchase of an 'essential' vacuum cleaner. The immediate result of the sales promotion was to boost the company's sales of vacuum cleaners to more than double the level of the previous year. So far so good, but then serious problems set in. The first problem occurred when Hoover could not satisfy demand for its vacuum…
- The challenge in identifying an attractive target market (Ice Cream) is to find a market that’s large enough for the proposed business but is yet small enough to avoid attracting larger competitors?Assessing the attractiveness of a target market is tougher than assessing the attractiveness of an entire industry.Often, considerable ingenuity must be employed to find information to assess the attractiveness of a specific target market.“A favorable sales quantity variance indicates that the marketing manager has done a good job.” Doyou agree? Can you give an example in which a market size variance or market share variance isopposite to that of the sales quantity variance?Tony Dauginas is a purchasing agent for a consumer packaged goods company based in the United States. His company manufactures various goods in the health and beauty industry, such as cosmetics, skin lotions, toothpaste, and shampoo. Tony’s company has come under assault from another, much larger company. The larger company can use its large purchasing volume as leverage to buy components for its products much less expensively than Tony’s company can. This has put a lot of pressure on Tony’s purchasing group to get the best price possible on the components it buys for manufacturing. One of the types of materials that Tony buys is corrugated boxes. The boxes are used as secondary packaging for all of the company’s goods. The price of wood pulp used to make the boxes has been steadily rising, causing prices of corrugated boxes to rise along with it. Tony has been very concerned about this price trend because the company spends a large percentage of its product-related costs on boxes.…