New Product Management 1. Consider this market that is made up of 5 brands of coffee. A group of customers from this market is asked to rate the five different brands of coffee (codenamed A, B, C, D, and E) after undertaking a blind taste test. Once they have sampled each of the five brands, they are asked their perceptions on two key characteristics of coffee: Strength and Smell. They rate each brand on a scale of 1 to 7 for each characteristic (1 is low and 7 is high). Each consumer is also asked to provide what level they expect on each of the two characteristics from their idea of a perfect product(codenamed IP). The average ratings obtained from the group are as follows:

Brand	Strength	Smell
A	3	4
B	3	2
C	5	3
D	3	5
E	5	1
Ideal Product (IP)	4	3

Plot a perceptual map in 2- dimensional space (X and Y axes) and indicate the position for each of the 5 brands and the Ideal Product on the map. (5 points) b. Based on the perceptual map, indicate the rank order of the five brands, A, B, C, D, and E, according to your expectations of each brands market share (5 points)

(Note: A rank of 1 for a brand would mean that you expect the brand to have the highest market share. You may assume the two product characteristics, Strength and Smell are the only two factors that equally determine the brands market shares).

Brand	Market Share
A
B
C
D
E
Ideal Product (IP)

C. Prior analysis shows the following market share model to be consistently true across various markets and product categories: Where i = K/di

Mi = market share of brand i (i stands for A, B, C, D, or E, depending on which brand is being considered) K = A constant whose value needs to be determined based on the data from the particular market

di = the distance of the brand i from the Ideal Product IP i. Find the value of the constant K that fits this market. (The following hint will help: The sum of the percentage market shares of all brands in a market should add up to 100%) (5 points) ii. Having determined the value for K, calculate the expected market shares of brands A through E (MA, MB, MC, MD, ME) from the model. (5 points) d. Suppose a new brand F enters the market. Consumers rate brand F as follows: Strength = 5, Aroma = 5 Extend the model i = K/di

i. to include brand F and repeat your analysis. What would be your estimate of the market share for brand F? (5 points) ii. Is there a pattern in which brand F draws its share from other existing brands? (Hint: Compare the shares of brands A through E before and after brand F comes into the market) (5 points)

Please attach the excel sheet used.