Background You are the marketing analyst for an online athletic shoe store To date, your company has done little formal marketing research about athletic shoe buyers in the United States Using the 2017 Spring GfK MRI data, you recently ran a series of reports about the shoe buying habits of several U S consumer segments At this time, you have decided to focus on the five best selling shoe brands on your website Adidas, Asics, Nike, New Balance, and Reebok After looking through the GfK MRI data report options, you decided that the most fitting question for your purposes was Did you buy SHOE BRAND in the last 12 months The report is designed to compare the shoe buying habits of consumers across several different consumer characteristics gender, age, and internet use In addition, you also created three subsegment schemes that combined two different segmentation variables Gender and Age (men 1834 and women 1834) and Internet Use and Age (heavy internet users 1834 years old) Your Goal First, review the data from the 2017 GfK MRI You will use this information to make some inferences about the brand preferences of the different segments You will combine the information in the GfK MRI with some financial assumptions provided by your company to make some recommendations for future marketing tactics The Data You can interpret the data in the following manner Market Segment Size (000s) The total number of U S adults that meet the criteria for the segment (regardless of whether they did or did not buy a particular shoe brand) Market Segment Size ( ) The same as Market Segment Size (000s), but presented as a percentage of all U S Adults Estimated Count (000s) The estimated number of U S adults within the segment who bought that particular pair of shoes at least once in the last 12 months Percentage of Total Among all U S adults who bought a particular brand of shoes in the last 12 months, the percentage of them who belong to that particular segment Percentage within market segment who bought in last year The percentage of people within a particular segment who bought the shoe brand within the last 12 months Index The likelihood of a member of the segment to have bought the particular shoe brand in the last 12 months, indexed to the likelihood of an average U S adult (the U S average equals an index value of 100) Thus, an index value of 120 can be interpreted as members of that segment being 20 percent more likely than the national average to have bought a particular brand of shoes in the last 12 months Total Men Women Adults 1834 Men 1834 Women 1834 Internet 1 (Heavy Users) Adults 1834 and Heavy Internet Source Spring 2014 GfK MRI Market Segment Size (000s) 245,907 118,605 127,302 74,034 37,020 37,014 49,147 23,632 Market Segment Size ( ) 100 48 2 51 8 30 1 15 1 15 1 9 6 ADIDAS Estimated Count (000s) 18,845 10,350 8,495 8,493 4,566 3,926 4,910 2,998 of Total 100 54 92 45 08 24 23 20 83 26 06 15 91 within Mkt Seg who bought last year 7 66 8 73 6 67 11 47 12 33 10 61 9 99 12 68 Index 100 114 87 150 161 138 130 ASICS Estimated Count (000s) 11,135 4,712 6,424 2,909 1,093 1,817 2,070 804 of Total 100 42 31 57 69 26 13 9 81 16 31 18 59 7 22 within Mkt Seg who bought last year 4 53 3 97 3 93 2 95 4 91 4 21 3 40 Index 100 88 111 87 87 108 93 75 NIKE Estimated Count (000s) 56,138 28,119 28,019 23,795 11,858 13,716 8,192 of Total 100 50 09 49 91 42 39 21,26 21 12 24 43 14 59 within Mkt Seg who bought last year 22 83 23 71 22 01 32 14 32 24 32 04 27 91 34 67 Index 100 104 96 141 141 140 122 152 NEW BALANCE Estimated Count (000s) 24,343 12,256 12,087 3,950 2,056 1,895 4,009 1,338 of Total 100 50 35 49 65 16 23 8 44 7 78 16 47 5 50 within Mkt Seg who bought last year 9 90 10 33 9 49 5 34 5 55 5 12 8 16 5 66 Index 100 104 96 54 56 52 82 57 REEBOK Estimated Count (000s) 8,262 4,434 3,829 2,214 1,244 970 1,873 893 of Total 100 53 66 46 34 26 79 15 05 11 74 22 67 10 80 within Mkt Seg who bought last year 3 36 3 74 3 01 2 99 3 36 2 62 3 81 3 72 Index 100 111 90 89 112 78 113 112 Task 1 Correct the Table Unfortunately, it appears that someone accidentally left some of the calculated values blank in the table Luckily, you know you can use the other available information in the table to calculate the missing values Q1 Calculate the market segment size (in percentage) for heavy internet users CALCULATION Market Segment Size (000s) in the Internet 1 (Heavy Users) Column Market Segment Size (000s) in the Total Column Q2 Calculate the percentage of total market for adults 1834 who bought Adidas in the last 12 months CALCULATION Estimated Count (000s in Adults 1834 Estimated Count (000s in Total) Q3 Calculate the index for adults 1834 who are heavy internet users who bought Adidas in the last 12 months CALCULATION 100 ( percentage within market segment who bought last year in adults 1834heavy internet percentage within market segment who bought last year in total ) percentage within market segment who bought last year in total 100 Q4 For the Women column, calculate the percentage within market segment who bought Asics in the last 12 months CALCULATION Estimated Count (000s) Market Segment Size (000s) Q5 For men 1834, calculate the Estimated Count (000s) who bought Nike shoes in the last 12 months CALCULATION Market Segment Size (000s) for Men 1834 Percentage within market segment who boughtlast year for Men 1834 Task 2 Making Inferences about Athletic Shoe Buyers Generally speaking, does it appear that heavy internet users are more or less likely than the average U S adult to have bought these shoe brands in the last 12 months If you were going to run a series of advertisements for your company targeting younger adult women, which brand would you recommend to feature on the advertisement Which shoe brand would you be disinclined to feature Why Lately, management for your company has worried that its positioning has completely overlooked serving the wants of older consumers (older than 45 years old) If your company decides to market toward older U S adults, which of the brands should your company be more conscientious about featuring Task 3 Estimating the Value of the Shoe Buying Segments Using some assumptions provided by the CFO, you are tasked with estimating the annual sales (in dollars) for each shoe buying segment To do so, you will need to make the following assumptions Average number of pairs bought within 12 months Average price of shoe brand These numbers are estimates that came from the internal efforts of your financial analyst team If someone buys at least one pair of a shoe brand in the last 12 months, how many total pairs of that brand do they buy, on average Average price per shoe pair Adidas 2 0 $70 Asics 2 0 $70 Nike 1 5 $75 New Balance 2 0 $70 Reebok 1 5 $65 1 What are the total estimated sales of these five shoe brands for heavy internet users in the last 12 months 2 For a random U S adult woman, how much would we estimate she spent on Asics shoes in the last 12 months Discussion and Debate 1 Based solely on the information that you analyzed, do you think it makes more sense for your company to treat the whole market as homogeneous (no segmentation), use a single variable segmentation scheme (just gender, just age, just internet usage), or a multivariate segmentation scheme Regardless of your answer, identify the advantages and limitations associated with your argument 2 You are about to ask a junior analyst at your company to run another GfK MRI report for you Which additional variables do you think would be best to add into the report for segmentation purposes Why

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Background You are the marketing analyst for an online athletic shoe store. To date, your company has done little formal marketing research about athletic shoe

Background

You are the marketing analyst for an online athletic shoe store. To date, your company has done little formal marketing research about athletic shoe buyers in the United States. Using the 2017 Spring GfK MRI data, you recently ran a series of reports about the shoe-buying habits of several U.S. consumer segments. At this time, you have decided to focus on the five best-selling shoe brands on your website: Adidas, Asics, Nike, New Balance, and Reebok. After looking through the GfK MRI data report options, you decided that the most fitting question for your purposes was Did you buy [SHOE BRAND] in the last 12 months?

The report is designed to compare the shoe-buying habits of consumers across several different consumer characteristics: gender, age, and internet use. In addition, you also created three subsegment schemes that combined two different segmentation variables: Gender and Age (men 1834 and women 1834) and Internet Use and Age (heavy internet users 1834 years old).

Your Goal

First, review the data from the 2017 GfK MRI. You will use this information to make some inferences about the brand preferences of the different segments. You will combine the information in the GfK MRI with some financial assumptions provided by your company to make some recommendations for future marketing tactics.

The Data

You can interpret the data in the following manner:

Market Segment Size (000s): The total number of U.S. adults that meet the criteria for the segment (regardless of whether they did or did not buy a particular shoe brand).
Market Segment Size (%): The same as Market Segment Size (000s), but presented as a percentage of all U.S. Adults.
Estimated Count (000s): The estimated number of U.S. adults within the segment who bought that particular pair of shoes at least once in the last 12 months.
Percentage of Total: Among all U.S. adults who bought a particular brand of shoes in the last 12 months, the percentage of them who belong to that particular segment.
Percentage within market segment who bought in last year: The percentage of people within a particular segment who bought the shoe brand within the last 12 months.
Index: The likelihood of a member of the segment to have bought the particular shoe brand in the last 12 months, indexed to the likelihood of an average U.S. adult (the U.S. average equals an index value of 100). Thus, an index value of 120 can be interpreted as members of that segment being 20 percent more likely than the national average to have bought a particular brand of shoes in the last 12 months.

	Total	Men	Women	Adults 1834	Men 1834	Women 1834	Internet 1 (Heavy Users)	Adults 1834 and Heavy Internet
Source: Spring 2014 GfK MRI
Market Segment Size (000s)	245,907	118,605	127,302	74,034	37,020	37,014	49,147	23,632
Market Segment Size (%)	100	48.2	51.8	30.1	15.1	15.1		9.6
ADIDAS
Estimated Count (000s)	18,845	10,350	8,495	8,493	4,566	3,926	4,910	2,998
% of Total	100	54.92	45.08		24.23	20.83	26.06	15.91
% within Mkt. Seg. who bought last year	7.66	8.73	6.67	11.47	12.33	10.61	9.99	12.68
Index	100	114	87	150	161	138	130
ASICS
Estimated Count (000s)	11,135	4,712	6,424	2,909	1,093	1,817	2,070	804
% of Total	100	42.31	57.69	26.13	9.81	16.31	18.59	7.22
% within Mkt. Seg. who bought last year	4.53	3.97		3.93	2.95	4.91	4.21	3.40
Index	100	88	111	87	87	108	93	75
NIKE
Estimated Count (000s)	56,138	28,119	28,019	23,795		11,858	13,716	8,192
% of Total	100	50.09	49.91	42.39	21,26	21.12	24.43	14.59
% within Mkt. Seg. who bought last year	22.83	23.71	22.01	32.14	32.24	32.04	27.91	34.67
Index	100	104	96	141	141	140	122	152
NEW BALANCE
Estimated Count (000s)	24,343	12,256	12,087	3,950	2,056	1,895	4,009	1,338
% of Total	100	50.35	49.65	16.23	8.44	7.78	16.47	5.50
% within Mkt. Seg. who bought last year	9.90	10.33	9.49	5.34	5.55	5.12	8.16	5.66
Index	100	104	96	54	56	52	82	57
REEBOK
Estimated Count (000s)	8,262	4,434	3,829	2,214	1,244	970	1,873	893
% of Total	100	53.66	46.34	26.79	15.05	11.74	22.67	10.80
% within Mkt. Seg. who bought last year	3.36	3.74	3.01	2.99	3.36	2.62	3.81	3.72
Index	100	111	90	89	112	78	113	112

Task 1: Correct the Table:

Unfortunately, it appears that someone accidentally left some of the calculated values blank in the table. Luckily, you know you can use the other available information in the table to calculate the missing values.

Q1: Calculate the market segment size (in percentage) for heavy internet users

CALCULATION=[Market Segment Size (000s) in the Internet 1 (Heavy Users) Column][Market Segment Size (000s) in the Total Column]
Q2: Calculate the percentage of total market for adults 1834 who bought Adidas in the last 12 months.

CALCULATION=[Estimated Count (000s in Adults 1834][Estimated Count (000s in Total)]
Q3: Calculate the index for adults 1834 who are heavy internet users who bought Adidas in the last 12 months.

CALCULATION=100+([percentage within market segment who bought last year in adults 1834heavy internet][percentage within market segment who bought last year in total])[percentage within market segment who bought last year in total]100
Q4: For the Women column, calculate the percentage within market segment who bought Asics in the last 12 months.

CALCULATION=[Estimated Count (000s)][Market Segment Size (000s)]
Q5: For men 1834, calculate the Estimated Count (000s) who bought Nike shoes in the last 12 months.

CALCULATION=[Market Segment Size (000s) for Men 1834][Percentage within market segment who boughtlast year for Men 1834]

Task 2: Making Inferences about Athletic Shoe Buyers

Generally speaking, does it appear that heavy internet users are more or less likely than the average U.S. adult to have bought these shoe brands in the last 12 months?
If you were going to run a series of advertisements for your company targeting younger adult women, which brand would you recommend to feature on the advertisement? Which shoe brand would you be disinclined to feature? Why?
Lately, management for your company has worried that its positioning has completely overlooked serving the wants of older consumers (older than 45 years old). If your company decides to market toward older U.S. adults, which of the brands should your company be more conscientious about featuring?

Task 3: Estimating the Value of the Shoe Buying Segments

Using some assumptions provided by the CFO, you are tasked with estimating the annual sales (in dollars) for each shoe buying segment. To do so, you will need to make the following assumptions:

Average number of pairs bought within 12 months
Average price of shoe brand

These numbers are estimates that came from the internal efforts of your financial analyst team.

	If someone buys at least one pair of a shoe brand in the last 12 months, how many total pairs of that brand do they buy, on average?	Average price per shoe pair
Adidas	2.0	$70
Asics	2.0	$70
Nike	1.5	$75
New Balance	2.0	$70
Reebok	1.5	$65

1 What are the total estimated sales of these five shoe brands for heavy internet users in the last 12 months?
2 For a random U.S. adult woman, how much would we estimate she spent on Asics shoes in the last 12 months?

Discussion and Debate

1. Based solely on the information that you analyzed, do you think it makes more sense for your company to: treat the whole market as homogeneous (no segmentation), use a single variable segmentation scheme (just gender, just age, just internet usage), or a multivariate segmentation scheme? Regardless of your answer, identify the advantages and limitations associated with your argument.
2. You are about to ask a junior analyst at your company to run another GfK MRI report for you. Which additional variables do you think would be best to add into the report for segmentation purposes? Why?