Cereal bar manufacturer Carman's kitchen offers premium cereal bars in five different flavors under the brand name "Carman's". Despite being a small firm, Carman's kitchen has managed to get about 20% market share in the cereal bars category, which is dominated by larger players such as Kellogs and Uncle Tobys. Carman's kitchen is pursuing an aggressive growth strategy and is planning to use price promotions extensively. The company has hired you as its marketing consultant to help identify the best price promotion strategy to pursue. Carman's has identified four different price promotion strategies that it can offer. Details of these strategies are given in the table below. Regular price of Carman's cereal bar is $5 and its regular margin (contribution) is $3. Carman's has to cover any additional cost that the retailer will incur in running the promotion.

To evaluate which of these strategies is effective, Carman's conducted field experiments in four stores (one strategy per store) of a major Australian supermarket chain during the past 26 weeks. In these field experiments, one of the four promotions was offered in weeks 11-14 and the category sales and Carman's brand market share were observed for 10 weeks prior to promotion and 12 weeks after promotion. Post-promotion dip was observed for 2 weeks following the promotional period, after which sales returned to its baseline value or persisted higher than the baseline value. The provided Excel file contains the weekly category sales and brand market share for the 10 week pre-promotion period, 4 week promotion period (highlighted in light blue) and two week post promotion period (highlighted in dark blue). Long-term weekly average category sales and brand market shares (evaluated during 10 weeks after post-promotion dip period) are also given in the data. You can assume that the four experimental stores are comparable in terms of their store characteristics as well as the demographic characteristics of its customers. Your task is to evaluate the net impact of promotion taking into account any retailer's cost and long-term impact on category sales and brand market share; and recommend the best promotion strategy for Carman's. Discuss your intuition for the observed results and provide justification for your recommendation.

STRATEGY TABLES

Strategy Promotional price Weekly retailer cost per store

10% price reduction $4.5 0

20% price reduction $4 0

10% price reduction with end of aisle display $4.5 $300

20% price reduction with feature in weekly catalogue $4 $100

PLEASE COMPLETED EXCEL TABLE AS WELL

MIS784_Assignment 1_Data [Protected View] - Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View ? Tell me what you want to do. B22 X Y fx A B C D E F G H K M Strategy 1 Strategy 2 Strategy 3 Strategy 4 Week Category sales Brand market share Brand sales Category sales Brand market sha Brand sales Category sales Brand market shi Brand sales Category sales Brand market share Brand sales 9920 9.77% 10180 9.52% 964 9.64% 929 11970 9.18% 11120 8.81% 12030 10.55% 7790 10.01% 780 12120 10.31% 13910 9.70% 11280 10.10% 10430 9.97% 1040 12040 10.21% IQUIA WN 8250 9.57% 15630 10.10% 16880 9.24% 1560 12020 11.06% 8160 10.04% 10080 10.31% 11670 9.42% 1099 12200 10.16% 9340 11.45% 8000 9.12% 13030 9.20% 1199 1860 10.28% 9290 10.97% 10320 10.65% 13480 9.79% 1320 12090 8.93% 10120 10.96% 10770 9.00% 11210 10.70% 1199 1750 9.10% 9 9000 9.00% 956 9.93% 11930 11.06% 1319 12000 10.50% 10 10460 9.46% 12930 10.67% 16530 10.82% 1789 11910 9.90% 11 10770 11.79% 14170 14.96% 13570 13.78% 1870 14870 15.87% 12 11150 13.81% 11390 14.39% 13290 12.64% 1680 15030 15.83% 13 5850 12.40% 14230 15.53% 14060 12.44% 1749 14750 16.40% 14 9860 12.06% 11150 15.06% 12920 12.30% 1589 14950 15.78% 15 11530 7.54% 10540 9.01% 12040 8.96 1079 13080 7.49% 16 8360 11.60% 11270 9.67% 13900 8.70% 1209 13780 8.49% 21 (Avg. weekly values) Strategy 1 Strategy 2 Strategy 3 Strategy 4 2 Baseline category sales 23 Baseline brand sales 24 Promotion sales 25 Post - promotion sales 26 Incremental sales Post - promotion dip 8 Regular margin 29 Promotion margin 30 Incremental gain $1 Foregone contribution Post promotion loss 3 Retailer (fixed) costs 4 Net effect of promotion Long term effects Avg. weekly category sales 9764 10999 12973 13037 8 Avg. weekly brand sales 994 13201 1299 1554 9 % Gain in category sales 10 Long term gain in brand sales 1 Long term gain in brand profit Sheet1