marketing – Selim Hasagasioglu

Solution to Management Science Series #213: Real-world example: Marbella Call Center

Marbella Call Center is a contractor assessing the quality of calls to the customer services of top global brands. Recently, Marbella agreed with Eldorado, a global retailer, on assessing the quality of the customer service of Eldorado.

Marbella has been periodically recording a random sample of customer calls to Eldorado. Calls are evaluated on whether the employee taking the call abides by Eldorado’s customer support policies.

Historically, 80% of all calls conformed to the policy. A recent sample of 120 calls found that 70 adhered to the policy.

1. What is the sample proportion?

2. Is the normal distribution a good approximation?

3. What is the expected value and standard deviation of the sample proportion?

4. What is the probability of getting 70 or fewer calls that adhered to the company policy?

5. Do you see any problems concerning the adherence to the company’s customer support policies?

Solution to Management Science Series #211: Real-world example: Kabuto Drinks forecasting production capacity and launching a loyalty program

A soft-drink company called Kabuto plans to model the production capacity for the year 2026.

The forecasters determined that the annual soft-drink consumption with the respect to Kabuto’s brands is normally distributed with a mean of 160 liters per customer of Kabuto per year and a standard deviation of 40 liters per customer per year.

a)What is the median per person annual consumption?

b)What is the mode for the per person annual consumption?

c)What percentage of Kabuto consumers do consume more than 160 liters per year?

d)What percentage of Kabuto consumers do consume more than 200 liters per year?

e)What percentage of Kabuto consumers do consume more than 230 liters per year?

f)What percentage of Kabuto consumers do consume fewer than 120 liters per year?

g)Your marketing department is proposing a loyalty program for the consumers who lie within the top 5% of Kabuto-branded soft-drink consumption. Find the threshold value of annual Kabuto drink consumption for these top consumers in liters.

h)In an alternative scenario, Kabuto will have customers within the top 3% of consumption join the loyalty program. Find the threshold value of annual Kabuto drink consumption for these top consumers in liters.

Solution to Management Science Series #208: Zodd Japanese Manga trying to improve customer satisfaction

Selim Hasagasioglu Academy and Consulting Services was contacted by a very niche e-commerce platform called Zodd that markets and sells Japanese manga and relevant merchandise.

Zodd has been recently struggling with customer satisfaction issues. Furthermore, Zodd does not have the information on the historical customer satisfaction levels.

Selim’s firm carried out a survey, randomly sampling 50 customers out of the firm’s 1300 customers. The number of customers in the sample who claimed that they were ‘entirely satisfied’ was 35.

a) Do you need to use the finite population correction factor?

b) What is the sample proportion for the sample collected by Selim’s firm?

c)Is the distribution of the sample proportion normal or can it be used to conduct a confidence interval analysis?

d) What is the margin of error assuming a 95% confidence level?

e) What is the 95% confidence interval for the proportion of customers who are “entirely satisfied”? What is the 99% confidence interval? Are you 95% confident that customers are more than likely to be entirely satisfied with Zodd? Are you 99% confident that customers are more than likely to be entirely satisfied with Zodd?

f) How many customers should be sampled to ensure a margin of error of 0.12 with a 90% confidence level if you use p* = 0.5?

g) How many customers should be sampled to ensure a margin of error of 0.12 with a 90% confidence level if you use p* = 0.75?

h) Between the answers to f) and g), which is a more conservative approach and why is this difference important in the practice of data/business analytics?

Solution to Management Science Series #207: Marketing real-world example ‘Crenner Toys designing a promotion’

Marketing real-world example: Crenner Toys designing a promotion

Crenner Toys, famous for its toy vehicles transforming into attack vehicles and sold with complementary figures, is planning to roll out a promotion through which Crenner will send discount codes to its existing customers via emails.

Crenner will deem this promotion viable and subsequently implement it at national scale only if more than 15% of customers receiving the codes use them within 10 days. To assess the viability of this promotion, Crenner sent codes to a random sample of 150 customers and 23 of those receiving the code used it.

1.Construct the Null and Alternative hypotheses.

2.Should Crenner launch this promotion at national scale? Crenner believes that a significance level of 5% is appropriate for the hypothesis testing.

Solution to Management Science Series #198: Using K-Means Clustering for Customer Segmentation

Using K-Means Clustering for Customer Segmentation
Even Excel, albeit sometimes clumsy, can be a data analytics tool.

Try to solve the following question by using Excel:

Wine retailer, Porto, had 32 different promotion campaigns. You have the information on promotion month, minimum quantity to be purchased to benefit from promotions, discount percentages, varietals, wine’s origin, and whether the wine has passed its peak or not.

All this information is captured by a single Excel spreadsheet.

Then, you also have customer transaction data in a separate spreadsheet. You see that there had been 324 transactions completed.

Segment customers by using k-means clustering method. Use Excel to do so!

Making the hard decision of pricing easier: A blueprint comparing different pricing strategies

Pricing is an important decision involving both qualitative and quantitative considerations. 🧭

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From start-ups to strong incumbents, many companies still struggle to find the market clearing price-contrary to what you were taught in your microeconomics class, such a price does not exist in real life 😉

Given current inflationary environment and incessant decline in the purchasing power, this decision is now harder than it has ever been.

Whether your company follows a value-based, cost-based, or a hybrid pricing model, there are still some guidelines working in the pricing universe.

For example, you should know how to set relative prices for the following product pairs: razor and blades, video game hardware and software, printers and cartridges.

In this article, I lay out the fundamentals of different pricing strategies and which strategy makes sense for your company. Comparing different pricing strategies and the rationale behind, I also share examples of different pricing strategies from real-world companies and that particular pricing strategy is suitable for that specific company. The content can be utilized as a blueprint or guide concerning your efforts to determine the price of your services and products.

How too much reliance on sales promotions can upend long-established brands and companies: With lessons from video games industry

Designing a profitable sales promotion campaign is difficult, yet generally, sales promos make up big part of any company’s marketing budget.

You may think that even a poorly designed sales promo will lift your company’s gross revenues in the short-term, perhaps for a period of 2-3 months.

Having said that, a supposedly very well thought out, at least on paper, sales promotion can hurt your company’s both short- and long-term profitability, brand loyalty, and brand equity, as well as long-term overall gross revenues.

So, be careful with promotions; your company may have started its life as a differentiator but after so many promotions your company will become a commodity supplier that cannot command any price premium and dwindle, waging promotion and price wars.

I will briefly investigate and provide examples from my childhood heroes, namely Sega and Nintendo.

Marketing research done poorly!

Like many contemporary marketing concepts, marketing research is both an art and a science, containing many qualitative and quantitative aspects.

Star Wars and Friends would not have been created if its producers had listened to their “high-esteemed” marketing researchers.

Even for iPhone, many marketing researchers thought that the product would fail because consumers would still prefer to have their phones and MP3 players stand-alone.

Although these examples are of poorly conceived and conducted marketing research projects that still could not derail excellent products, there are still many successful products and services shaped by the insights gained through marketing research.

Success or failure of a marketing research project can be measured more easily, albeit in hindsight, if the product is launched.

For products that are scraped through marketing research, such measurement is more complicated: Obviously, you will never know if you never launch.

Think once what would have happened if George Lucas or Steve Jobs had listened to these “marketing researchers”!

Where did Apple get its inspiration to build its own D2C stores or allegedly even its sleek design policy? What about their marketing mix strategy?

Management Science Series #158: Solution to the ‘Understanding acquisitions costs, retention and churn rates (Nintendo example)’ 🧮

Understanding acquisitions costs, retention and churn rates 🧮

Nintendo has launched Nintendo Online membership program. The membership allows members to play additional retro Nintendo games, as well as store data. Subscribers are charged $10 per month and cost of maintaining this service is $2 per month per customer.

Nintendo expects the churn rate for this service to be 3%.

What is the maximum acquisition cost per customer?

Nintendo has a four-year time horizon for this new project so that the success of this project will be evaluated over a 4-year time period. Time value of money is not important and can be ignored.