CONFIDENTIAL 1 CS/FEB2024/STA589

UNIVERSITI TEKNOLOGI MARA

FINAL ASSESSMENT

COURSE : MARKETING MODELS

COURSE CODE : STA589
EXAMINATION : FEBRUARY 2024
TIME : 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of six (6) questions.

2. Answer ALL questions in English in the answer booklet. Start each answer
on a new page.

3. Do not bring any materials into the examination room unless permission is
given by the invigilator.

4. Please check to make sure that this examination pack consists of :

i) the Question Paper
ii) The Answer Sheet
iii) A graph paper

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 9 printed pages

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QUESTION 1

a) Company XYZ is launching a new line of organic skincare products aimed at health-
conscious consumers. The product manager wants to develop a market response
model of the marketplace depending on various factors.

i) Describe two (2) factors that could be important in predicting the sale of the
product.
(2 marks)

ii) Explain any two (2) of the common response models relating to the factors in (i)
that resulted in saturation phenomena.
(4 marks)

b) Table 1 shows the summary outputs for two different response models for promotional
activities at an electronic store. The number of promotions each day (X) and the
number of products sold (Y) for the duration of 12 days were selected to model this
study.

Table 1
Model Estimated
R-square RSS
Parameter Value
Adbudg a = 680.715
b = -2.193
0.687 98.927
c = 0.493
d = 145.672
Linear Regression a = 9.041
0.669 104.446
b = 0.42

i) Write the equations for the Adbudg model and Linear Regression model based on
the output.
(2 marks)

ii) Based on the output, which model is more suitable in investigating the
relationship between the number of promotions and the number of products sold?
Justify your answer.
(2 marks)

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QUESTION 2

a) Consider this brand switching matrix for handbag market for Gucci (G), Fendi (F),
Other (O) and Coach (C) in 2023.
Table 2
From To (t + 1)
G F O C
G 0.68 0.14 0.12 0.06
F 0.21 0.60 0.12 0.07
O 0.15 0.15 0.62 0.05
C 0.20 0.17 0.16 0.46

i) Justify that the table is a brand switching matrix table.

The initial brand shares in 2023 for G, F, O and C are 0.43, 0.27, 0.16 and 0.14,
respectively.
ii) What brand has the highest loyalty from its customers in 2023? Why?

iii) What can Gucci expect for its market share in 2024? Explain your answer.
(10 marks)
b) Calculate the customer lifetime value (CLV) for the following cases.
i) Assume an online video streaming service has multiple price plans, but the
average customer spends RM54 per month. Customers typically subscribe for
three and a half years and use automatic monthly payments.
ii) Let’s say a local coffee chain with three locations has an average sale of RM16.
The typical customer is a local worker who visits two times per week, 50 weeks
per year, over an average of five years.
(6 marks)

c) The are many different strategies companies can adopt to boost their CLV. Give two
ideas to consider if you’re trying to earn more revenue from the typical customer.
(4 marks)

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QUESTION 3

a) Figure 1 is a preference based perceptual map of population views on several brands

(A to I). The brands are plotted based on population responses on their preference in
spending their holidays.

Figure 1

i) Based on the map, write FOUR conclusions on similarity versus preference, as

well as comparability among the brands.
(4 marks)

Imagine that you own a group tour business (Brand J) that caters for trips during
holiday seasons.

ii) Choose a section that you would like position your Brand J by providing the
reason.

iii) Based on the maps, write a potential positioning statement for your own business,
Brand J that includes [target segment], [product/concept], [most important claim]
and [single most important support].
(6 marks)

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b) Cluster analysis is an approach to segment the customers. Table 3 consists of

information about 6 female customers on their preference of tote bags materials.

Table 3
Income (in ‘000RM) No of children
1 5.0 2
2 4.9 3
3 3.0 0
4 5.4 5
5 6.3 5
6 5.8 2

i) Construct the pairwise distance matrix.

(4 marks)

ii) Based on the distance matrix, construct the dendogram and extract the segment
or group from there.
(6 marks)

QUESTION 4

a) Figure 2 lists 4 types of segmentation. Describe each type in your own words. Hint:
You can choose a product as your example.

Figure 2
(8 marks)

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b) Explain the potential target segment for Rolex.

(2 marks)

Figure 3

QUESTION 5

a) Table 4 represents net total quarterly foreign direct investment (FDI) in Malaysia from
year 1 to 3.
Table 4
Year Net total FDI (RM billion)
Quarter 1 Quarter 2 Quarter 3 Quarter 4
1 8.6 7.4 6.4 6.2
2 8.9 8.8 9.1 11.4
3 6.9 10.2 7.7 10.2
Source: Bank Negara Malaysia and Department of Statistics, Malaysia

i) Find the trend values using three moving average methods.

(2 marks)

ii) Plot the actual data and the trend values on the same graph paper. Comment
on the graph obtained.
(3 marks)

b) Table 5 and Table 6 are about the coefficient for innovator and imitator and number of
adopters on the new technology on mobile phone market, respectively. Based on the
two tables, answer the following questions.

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Table 5: Estimating the potential market M, the innovation coefficient p and the
imitation coefficient q

Table 6: Determining the number of new adopters, men and women, at time t

i) Explain the meaning of coefficient for innovator and imitator for men and
women.
(4 marks)

ii) How many numbers of adopters of women and men?

(1 mark)

iii) How long is required to adopt the new technology on the mobile phone for all
women and men?
(2 marks)

iv) Explain the finding for the new adopters at time t = 1 and t = 2.
(4 marks)

v) State two findings that can be drawn from Table 6.

(4 marks)

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QUESTION 6

a) Price discrimination is indeed a common strategy used by businesses to maximize

profit by charging different prices to different customers for the same good or service.
A car dealer may exercise price discrimination by looking at how a potential car buyer
is dressed. A potential customer who has the latest version of a phone and wears
expensive clothes is more likely to be able to pay a premium for a new car. This
strategy can also require a business to categorize its customers and offer
personalized prices based on previous purchases, particularly online.

i) Identify the type of price discrimination exercise in this scenario.

(1 mark)

ii) Describe any TWO (2) criteria needed to enable a management of car dealer to
apply price discrimination mentioned in (i).
(4 marks)

iii) State TWO (2) advantages of using this type of price discrimination.
(2 marks)

b) ASIA Food Production Company is looking for the most suitable crop to cultivate in
order to make a decision about their food production. They have determined the
criterion that really important to be considered are yield potential, soil adaptability and
market demand. Currently in the market, these are the three preferred food
manufacturers which are QSR, FP and NARS. The production manager has
developed the following pairwise comparison matrices for each of criteria and Table 7.

Table 7
Yield Potential QSR FP NARS
QSR 1 1/4 4
FP 4 1 9
NARS 1/4 1/9 1

Soil Adaptability QSR FP NARS

QSR 1 3 1/5
FP 1/3 1 1/7
NARS 5 7 1

Market Demand QSR FP NARS

QSR 1 1/3 5
FP 3 1 9
NARS 1/5 1/9 1

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They also determined that in terms of criteria that, yield potential is equally to moderately
important than soil adaptability and moderately to strongly important than market
demand, and that soil adaptability is moderately important to market demand. Use the
following scale to answer the following question:

Important Level Scale

Equally important 1
Equally to moderately important 2
Moderately important 3
Moderately to strongly important 4
Strongly important 5
Strong to very strongly important 6
Very Strongly important 7
Very strongly and extremely important 8
Extremely important 9

i) Determine the priority vector for each criterion.

(9 marks)

ii) Give the rank of the companies and recommend the best decision for them
without doing a consistency analysis.
(4 marks)

END OF QUESTION PAPER

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