Il Sprint 1205 PM 84 Back Chapter 4 worksheetdocx 1 h MKTG

.\'Il Sprint 12:05 PM * 84% Back Chapter 4 worksheet.docx 1. h MKTG 2300- Marketing Strategies Chapter 4 Assignments 30 Points Possible Be sure to use complete sentences and proper labeling (numbers, dollars, etc Make sure to review the grading rubric in Canvas Be sure to show all of your calculations A breakfast cereal company is introducing a new organic cereal. Of their current 100,000 customers, 30,000 purchase this new product in January. In February 75% of those who tried the cereal in January really liked it and decided to make this their regular breakfast choice. The remaining 25% did not like the flavor and went back to their old cereal. Additionally, another 5,000 customers decided to try the new product once in February. One average, repeat customers purchase two boxes of cereal every week. (Note: assume 4 weeks in a month) 1. Please calculate the trial rate in January. Be sure to show your work 2. Please calculate the penetration ( #) in February. Be sure to show your 3. Please calculate the projection of trial sales for February. Be sure to 4. Please calculate the number of repeat buyers in February. Be sure to 5. Now you can calculate the repeat volume for February. Be sure to show 6. Finally you can calculate the total volume for February. Be sure to work show your work. show your work. your work. show your work. Courses Calendar To Do Notifications Inbox

Solution

                               

current

January

February

new/trail

new/trail

repeat

customers

100000

30000

5000

22500

Sales- number of boxes

100000

30000

40000

22500

1.

Trial rate= first time triers in period / total target population

= 30000/100000

=0.3 0r 30%

2.

Repeat rate in February=75%

Market penetration rate- Percentage of target customers that make at least one purchase over a period of time.

Penetration in January= New (first time) customers +repeat users =30000+0=30000

Penetration in February =New (first time) customers +repeat users

= New (first time) customers + repeat rate * penetration in t-1(January)

=5000+ 0.75* 30000 = 27500

3. PROJECTION OF TRIAL SALES

The question asks only for trial sales i.e. number of units purchased by first time users in the period

Number of trial users in Feb. =5000

The first time users buy only once in February. Average Frequency of Purchase =1

There has been no mention of the number of boxes purchased by the during a purchase .(information is provided only for repeat users). Hence we assume that new users buy only one box during their purchase. Average Units of Purchase

=1

Projection of trial Sales for period t = number of buyers * average frequency of purchase * Average Units of Purchase

= 5000*1*1=5000 units

4.

Number of repeat buyers in February =repeat rate * penetration in t-1(January)

= 0.75* 30000 = 22500

5.

Number of repeat buyers in February= 22500

Number of purchases during the period = 4 times in the period ( they buy once in a week for 4 weeks )

Average Units of Purchase during each purchase = 2 boxes each time

Repeat volume for February = number of units bought by repeat buyers during the period

= Number of repeat buyers in February* Number of purchases during the period * Average Units of Purchase during each purchase

=22500* 4*2 =1,80,000 units

6. Total volume for February= total units purchased by first time users + total units purchased by repeat users

=5000+ 180000= 1, 93,000 units

	current	January	February
		new/trail	new/trail	repeat
customers	100000	30000	5000	22500
Sales- number of boxes	100000	30000	40000	22500