Marketing Analytics for Carman's Kitchen: A Case Study

This report provides insights on how marketing analytics can be used to optimize the return on investments. It includes a case study on Carman's Kitchen and suggests the best possible price promotion strategy to improve its market share in the long term.

MARKETING ANALYTICS 1
MARKETING ANALYTICS
by Student’s Name
Code + Name of Course
Professor’s Name
University
City (State)
Date

MARKETING ANALYTICS 2
Introduction
Marketing analytics involves measuring, analysing and managing the performance of a
company’s market as a way of optimizing the return on investments. A company which is able to
understand its market is in a better position to operate efficiently and optimize the resource
utilization. In addition to giving the sales managers an insight of the market structure, marketing
analytics also allows the management to have a glimpse of the customer preferences and trends.
This are very valuable information that can be used by the firm to develop a more attractive
product brand (Nair, 2014). For any business enterprise to succeed in its operations there is need
for the managers to understand the power that marketing does play on the firm’s success. The
marketing manager should be able to measure the success rates. Analytics makes it possible to
discover the optimal strategies that should be put in place by the organization.
The increased business competition has made it almost mandatory for firms to engage in
adaptive marketing strategies so as to gain a competitive advantage in their various sectors of
operation. Quantifying the influence of marketing efforts on the revenue growth has continued to
be an elusive goal. Being that marketing increases brand awareness, enhance public perception
and give information of the business prospects the question that need to be answered is ‘how
many?” or “by how much?” or “how much more does the business need?”. This questions cannot
be answered in a straight forward manner but applying analytics will isolate the key drivers and
inform the decision makers so as to keep the managers ahead of the curve (Hartmut, et al., 2012).
The purpose of this report is to assist the management of Carman’s kitchen to come up
with the best possible price promotion strategy that can help the firm improve its market share in
the long term. Carman’s kitchen is a cereal bar manufacturer that offers premium cereal bars in
five diverse flavours. The company is a small organisation that has been able to compete with
big firms such as Kellogg and Uncle Toby to gain a market share of around 20%. Currently the
firm has put in place mechanisms to pursue aggressive growth strategies which involve price
promotion as a way of improving the popularity of their brand across Australia.
Methodology
In this research the case study design was applied. The term case refers to an instance and
its central characteristic is the study of one or more instances of something that make up the case

MARKETING ANALYTICS 3
of the research. A case is a relative term that can refer to an organization or a more abstract thing
like an event or programme (Thomas, 2011). Case study are mostly associated with qualitative
research or qualitative data but in some situations quantitative data can readily be incorporated in
a case study. In academics case studies do serve a unique purpose. For instance, they highlight
particular issues which are meant to stimulate debate in classes. In this report a descriptive
research case study was selected which was evaluated deeply to assist the firm generalize the
scenario to its management marketing decisions (Mills, et al., 2010). The ability of case studies
to investigate cases in depth and employ several sources of evidence make them a vital tool when
carrying out a descriptive research which is meant to fit a specific context. Case study design is
also effective for the study as it facilitates holistic perspectives by treating each case as a specific
whole. This way it is possible to investigate causal complexity in scenarios where there are
several relevant factors supported but very few observations (Starman, 2013).
In the market study the company did select 4 distinct strategies and conducted a field
experiment in four stores spread across main Australian supermarket chains. Each strategy was
applied to a single supermarket and the results used to generalize for the entire market. The study
was conducted for period of 26 weeks. In the first 10 weeks, the company’s brand share was
observed on a weekly basis and recorded. This was followed by four weeks promotional period
where each of the four price promotion strategies was applied to different stores and the sales
category and brand market share observed. When the promotion was stopped a two weeks
observation period was done to evaluate the post promotion dip, this was followed by a 10 weeks
post promotion observation that was meant to check the long-term impact of the product
promotion strategy. The findings of the study were then recorded for analysis. The data analysis
was done using Microsoft excel software.
Results and analysis
The table below displays a summary of the research findings

MARKETING ANALYTICS 4
(Avg. weekly values) Strategy 1 Strategy 2 Strategy 3 Strategy 4
Baseline category sales 9957 11078 12259 11996
Baseline brand sales 990 1112 1223 1195
Promotion sales 1212 1912 1722 2379
Post - promotion sales 994 1320 1299 1554
Incremental sales 222 800 499 1184
Post - promotion dip 920 1020 1144 1075
Regular margin $3.00 $3.00 $3.00 $3.00
Promotion margin $2.50 $2.00 $2.50 $2.00
Incremental gain $58.83 $487.27 $634.83 $1,172.47
Foregone contribution $0.50 $1.00 $0.50 $1.00
Post promotion loss $654.09 $1,775.97 $1,269.00 $2,475.92
Retailer (fixed) costs $0.00 $0.00 $300.00 $1,000.00
Net effect of promotion $58.83 $487.27 $334.83 $172.47
Long term effects
Avg. weekly category sales 9764 10999 12973 13037
Avg. weekly brand sales 994 1320 1299 1554
% Gain in category sales -1.94% -0.71% 5.82% 8.68%
Long term gain in brand
sales 0.36% 18.68% 6.18% 30.00%
Long term gain in brand
profit $10.76 $623.29 $226.83 $1,075.85
The values are summarized in terms of weekly averages for ease of interpretation.
Looking at the table it can be observed that the volume of brand sales was at its peak during the
four weeks promotional period. This means that the price reduction strategy did invite more
consumers to experience the products of Carman’s kitchen across the chain stores. The main area
of interest for the study is though the evaluation of the long-term impact of the strategies to the
business products market penetration. This can be assessed by studying the trends of the long-
term effects. By applying strategy 1 and 2 the firm will realise a negative gain in the category
sales. Strategy 3 and 4 on the other hand reflected positive gain of 5.8% and 8.65% respectively.
The gain in brand sales was though positive for all the strategies. In all the four strategies that
were selected as potential promotional avenues to be pursued by the firm, it can be generalized
that all are viable choices as they improves the market share of the firm (Aghazadeh, 2016).
A critical analysis of the long-term gain in brand sales did indicate that running the
strategy 4 will be utmost effective to the firm. This strategy has the potential of improving the

MARKETING ANALYTICS 5
company’s market share by 30%. This is way above the other strategies with strategy 2 coming
close at 18.68%. The increased market share by 30% will see strategy 4 improve the long-term
profitability of the firm by $ 1075.85. This is as a result of the brand sales levelling at a higher
value of 1554 which is around 359 more units sold per week than was recorded prior to the
promotion.
Another aspect of the promotion that need to be analysed is the cost of running it.
Strategy 1 and 2 are only associated with a drop of sales profit margin but no extra fixed costs.
The increased sales from the promotions means the net incremental revenue during the
promotion will be a profit of $ 58.83 for strategy 1 and $487.27 for strategy 2. Strategy 3 is
affected by a $ 300 fixed cost which reduces the net incremental revenue to $ 334.83 while the
$1000 fixed cost for strategy 4 mean the firm will only gain $ 172.47 from the promotion. It is
notable that for all the four strategies the firm will be able to realise a higher profit by running
the promotions due to the increased sales. The management is only interested in selecting the
best promotional strategy. This should be option 4 as it is best fit for long term profitability of
the firm (West, et al., 2010). The strategy has an increased long-term market share of 30% which
mean the profit of the organisation will go up by $1075.85. Even though it’s more costly to put
in place and lead to less revenue during the four weeks promotion period, the strategy should be
considered due to the massive long-term impact in has on the profitability of the organization.
Conclusion
Marketing analytics is very important for the sustainability of an enterprise. By
conducting effective analytics, a marketing manager is able to improve the business market
share, evaluate customer preference as well as change the customer preference towards the firm’s
product. In this report the research did apply the case study design. This involved analysing
specific cases and thereafter generalising the findings to accommodate the overall marketing
strategy. The result of the study did indicate that the strategy 4 is the optimal cause of action to
put in place. By selecting the strategy, the firm will be able to improve its market share by 30%
while at the same time increasing the long-term revenue generated by the sales.
Recommendation

MARKETING ANALYTICS 6
So as to improve the market share of Carman’s kitchen the management of the firm need
to put the following recommendations in place.
First, the firm should implement strategy 4 to increase the sales quantity and improve the
business market share.
Being that the overall net revenue from running the promotion is positive, the firm should
consider reducing the price of its products from the $5 per unit to encourage more consumers to
purchase the products.

MARKETING ANALYTICS 7
References
Aghazadeh, H., 2016. Business, Market, and Competitive Analysis (BMCA) Tools and
Techniques. Principles of Marketology, Volume 1, p. 187–247.
Hartmut, B., Scranton, P. & Spiekermann, U., 2012. The Rise of Marketing and Market
Research, New York: Palgrave Macmillan.
Mills, A. J., Durepos, G. & Wiebe, E., 2010. Encyclopedia of case study research, London::
Sage.
Nair, S., 2014. Market Research: Text and Cases. 2nd ed. s.l.:Himalaya Publishing House.
Starman, A., 2013. The case study as a type of qualitative research. Journal of contemporary
educational studies, Volume 1, pp. 28-41.
Thomas, G., 2011. A Typology for the case study in social science following a review of
definition, discourse and structure. Qualitative Inquiry, 17(6), p. 511–521.
West, D., Ford, J. & Ibrahim, E. ,., 2010. Strategic Marketing: Creating Competitive Advantage,
Oxford: Oxford University Press.