A.A new cereal manufacturer is trying to penetrate the marketplace and found from cluster analysis that there are at least three (3) tangible segments that could be targeted.This product is being marketed in an environment of high sensitivity to both price and volume. See Figure 1

As an analyst commissioned by the manufacturer, what strategies would you craft for marketing to each of these segments. [10 Marks]

B.Write the mathematical expression you would use to calculate the price elasticity of demand [5 Marks]

C.Caribbean Airline is seeking to determine whether to change its price of its airline tickets from Jamaica to Trinidad. On analysis, it was determined that the price elasticity of demand in this market is 1.85. How would you advise the airline and why? [5 Marks]

D.A multiple regression model with unit sold being the dependent variable and price being one of the independent, generated a beta on price of -1.40. How would you explain this to management in layman terms? [5 Marks]

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