1. According to the survey results (Excel file), which combination of features (which option) is most desirable among the players surveyed?
2.What is the estimated trial rate and forecasted volume (units and sales revenue) for the new duffel bag if customized with the combination you identified in Q.1?
3.If Spike decides to customize and sell the bag (option identified in Q.1), it must fulfill a minimum order of 50 bags from the vendor. Given the information provided and your answers above:
a. What is the breakeven number of units (#) and sales ($) for Spike under the minimum order (50 bags) scenario?
b. What is the likelihood that Spike will breakeven on its first minimum (50 bags) order from the vendor? / 5
4. The General Manager is considering a 10% off discount to motivate players to purchase the bag when it becomes available. In the past, a 10% discount increased sales on average by 30% for other merchandise items. Based on the information you have and any previous calculations:
a. How will this affect the breakeven point for units (#) and sales ($) for the bag? Show calculations and explain your answer.
b. Should you offer the 10% off discount or stay with the regular price when launching the new product? Why?
c. What other promotional tactics would you recommend to drive sales? Explain.
You are the Marketing Manager for the fictional Spike Volleyball Club in Vancouver, which boasts a membership of 350 volleyball players aged 18+ with approximately 20 new players joining annually. Players train with coaches to build their volleyball skills and are placed on teams that compete with other club teams within BC and across Canada. Spike offers a range of merchandise also known as club wear that is exclusive to its members. Examples of club merchandise include t-shirts, towels, knee pads, hoodies and shorts; all with the Spike logo imprinted on them. Spike does not require players to buy these items, but profits from the sale of merchandise go towards covering operations such as various club expenses like coaching staff salaries, tournament fees, court rentals, etc. Upon reviewing the new products being manufactured by its merchandise vendor, Spike notices that the manufacturer is now making sports duffel bags and thinks that this might be a great new product to offer its players. Like all other merchandise, the bags can be customized with specific features, can include the Spike logo and be made in Spike's two brand colours of blue and orange. All of Spike's merchandise is sold exclusively on its website, designed on an eCommerce platform. Orders are processed online and shipped to buyers directly. Some of the costs that Spike needs to consider are as follows: Order Quantities & Costs (from Vendor): Minimum Order Cost Per Bag (up to Vendor Set Up Cost to include 1 Quantity is 50 units 5 custom features)* Charge additional colour* 50 $23.25 $130 $0.61/ unit (one time charge) 100 $21.71 $0.61/ unit 200 $20.45 $0.61/ unit *Waterproof material costs +$1.00 extra per unit (cost per bag) *ONE color is free of charge. Each additional color costs $0.61 per unit. Credit card processing fee (avg.) 2.44% (on the order ($) total) eCommerce processing fee 3.00% per transaction (on the order ($) total) Shipping $5.00 per order NOTE: sales taxes will not be considered for this assignment. Case continues on the next page...Player/ Member Merchandise Survey Spike's General Manager has diligently collected feedback from 185 players in a club survey about its merchandise offerings. The number (185) of responses is considered a representative sample of its player base. This means if the survey were to be repeated, one can be certain that 95% of the time, the results will be the same and representative of all 350 players in the club with an acceptable level of error. The results from the survey have been downloaded in an Excel file (posted to Moodle under "Individual Assignment #2"). You are now tasked to analyze the potential for launching this new product (desired features/ benefits, estimated trial rate, pricing, etc. ) and the implications on profitability. How likely are players to buy the product and can Spike breakeven? Spike Volleyball Club Merchandise Survey (for reference) Spike would like to gather your feedback on our club merchandise offerings. Please answer the ollowing questions to help us understand how we can continue offering attractive and helpful gear to our players. The survey will take 5 minutes to complete. 1. Did you know that Spike sells exclusive club merchandise to members such as t-shirts, knee pads, water bottles, towels and hoodies with the Spike logo on them? O Yes O No [proceed to Q.4.] 2. How did you first become aware of Spike's club merchandise? My coach Q Other players Q Club monthly e-newsletter O Club social media O Club website 0 Other 3. Have you ever purchased any of the following Spike club merchandise? Check all that apply. 3 T-shirt O Knee pads Water bottle O Towels O Hoodie Shoe bag O No, I have not purchased any Spike club merchandise.Spike is considering adding a club duffel bag to the merchandise offerings and would like your help to identify your most preferred combination of features for the duffel bag. The bag will have the Spike logo imprinted and be in our club colours of blue and orange. There are three possible combinations of features (images provided). Please consider each one independently. Which combination would you most likely purchase? (select one) Bag Option 1: O Nylon fabric Adjustable shoulder strap Water bottle holder Waterproof Shoe compartment Price: $49.99 Bag Option 2: O Nylon fabric Adjustable shoulder strap Water bottle holder Waterproof Cell phone pocket Price: $39.99 Bag Option 3: O Nylon fabric Adjustable shoulder strap Water bottle holder Cell phone pocket Shoe compartment Price: $34.99 None. I wouldn't choose any of these options. O If the bag option you are most likely to purchase (from Q.4 above) was made available for sale, how likely would you be to purchase it? Extremely likely Very likely 0OOO Somewhat likely Not so likely Not at all likelyQ.1 Did you know that Spike sells exclusive club merchandise to members such as t-shirts, knee pads, water bottles, towels and hoodies with the Spike logo on them? YES NO Q.2 How did you first become aware of Spike's club merchandise? COACH PLAYERS W N P ENEWSLETTER SOCIAL MEDIA WEBSITE OTHER 2.3 Have you ever purchased any of the following Spike club merchandise? Check all that apply. T-SHIRT KNEE PADS WATER BOTTLE TOWEL HOODIE SHOE BAG NO, NOT BUY Q.4 Which combination would you most likely purchase? (select one)Q.4 Which combination would you most likely purchase? (select one) OPTION 1 OPTION 2 2 OPTION 3 3 NONE 4 Q.5 If the Bag Option you are most likely to purchase (from Q.X above) was made available for sale, how likely would you be to purchase it? Not at all likely Not so likely 2 Somewhat likely 3 Very likely 4 Extremely likely 5
