The university marketing analytics student

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Marketing Analytics
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Executive Summary
The Cereal bar manufacturer Carman’s kitchen offers premium cereal
bars which cover at least five different flavors under the brand name
“Carman’s”. The market of the Carman’s kitchen has stood at 20% making it be
competent among other competing players such as Kellogs and Uncle Tobys.
The data for decision making on the best strategy was collected from the
Australian supermarket chain for a period of 26 weeks. The results show that
the 4th strategy has the leading value of 1554; this implies that many clients in
one way or the other prefer to wait for the promotion period before buying or
taking advantage of the lower price.
Again, all the 4 strategies help to predict the effective promotion of sales, (F=
8.1052, p- value= .0005297. Therefore, it is recommended that the 4th strategy
should be adopted by the company since it has the largest sales category, largest
brand sales and the largest market share compared to other strategies. In
conclusion, the company can consider the promotion strategy of 20% price
reduction with a feature in the weekly catalog given the fact that it is likely to
attract new buyers thus leading to the encouragement of the switching
to other brands.

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Table of Content
Executive Summary..............................................................................................2
Introduction...........................................................................................................4
Methodology.........................................................................................................4
Findings................................................................................................................5
The net impact of promotion.............................................................................5
Linear regression modelling..............................................................................6
Recommendations.................................................................................................6
Conclusion............................................................................................................7
References.............................................................................................................8

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Introduction
In most cases, customers tend to like companies that offer sales
promotion. However, these promotions in one way or the other need to consider
price sensitivity among customers as much as they may have their way into the
market settings, (Nagle, and Müller, 2017). In order to gain sales volume and
market share among companies, strategies involving sales promotion have been
adopted to contribute to the temporal sales increase. At times, they are effective
when clearing out old stock before restocking new products within the market,
(Porter, and Kramer, 2019). The strategy also helps to outdo other competitors
by offering low prices to attract many customers. Rarely do sales promotion
built the identity of the brands as well as its loyalty. In order to understand some
of the existing correlations of the net impact of promotion, the Cereal bar
manufacturer Carman’s kitchen net unit and net profit impact of promotions
have been quantified.
The Cereal bar manufacturer Carman’s kitchen has been in the forefront
to offer premium cereal bars which cover at least five different flavors under the
brand name “Carman’s”. The market of the Carman’s kitchen has stood at 20%
making it be competent among other competing players such as Kellogs and
Uncle Tobys. For the Carman’s kitchen to continue pursuing a progressive
growth strategy, it has planned to consider using different promotion strategies
like promotion by reducing prices in an extensive manner, (Pepper, 2016). On
this note, the main purpose of this analysis is to identify the best price
promotion strategy that the company can continue pursuing.
Methodology
The Regular price of Carman’s cereal bar is at $5 and its regular margin
(contribution) is $3. It is expected that any running cost incurred during the
promotion will be covered by the Carman’s kitchen. The data for decision
making on the best strategy was collected from the Australian supermarket
chain for a period of 26 weeks. Each strategy out of four targeted every store
during field corrections. Promotion weeks was from week 11-14 where one of
the promotion strategies was offered. On the other hand, 10 weeks before
promotion could take place, the category sales and Carman’s brand market
share were also observed. In addition, the category sales and Carman’s brand
market share were also observed 12 weeks immediately after the promotion
took place.
Additionally, before the occurrence of the promotional period, there were
two weeks of observing the Post-promotion dip, (Drechsler, Leeflang, Bijmolt,
and Natter, 2017). Thereafter there was a return of the sales to its usual baseline

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except in a few cases where the value slightly exceeded the baseline values.
With the assumption that the four experimental stores are comparable in terms
of their store characteristics as well as the demographic characteristics of its
customers, the aim of the analysis 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 recommending the best promotion strategy for
Carman’s. the analysis has been done using excel while presenting both
descriptive statistics and inferential statistics like regression that has helped in
drawing conclusions.
Findings
The net impact of promotion
According to the results of the analysis, the first strategy has the highest
net effect of promotion at 2320 followed by the second strategy whose net
effect of promotion is 2295. In addition, 3rd and 4th strategies have 805 and 908
as the net effect of promotion. As much 1st strategy have the largest net impact
of promotion, it is only having the ability to increase sales in the short term thus
leading to lack of longer-term effect, (Newell, and Marabelli, 2015). While
considering weekly brands, the 4th strategy has the leading value of 1554, this
implies that many clients in one way or the other prefer to wait for the
promotion period before buying or taking advantage of the lower price.
Furthermore, for the avg. weekly brand sales to be high, it indicates that
before the promotion of the brand, most customers are aware and familiar with
the brand, hence attracting many clients. On this case, the promotion strategy of
20% price reduction with a feature in the weekly catalog is likely to do attract
new buyers thus leading to the encouragement of the switching to other brands.
Usually, it can be challenging to measure the actual effect of sales
promotion especially before and after the promotion. There is a need to consider
and track other marketing and communication efforts and dollars the Cereal bar
manufacturer Carman’s kitchen is undertaking at the same time as the sales
promotion, (Bernays, 2015). Given the fact that nearly all sales promotions do
deal with things which are tangible such as discounts, it is practical to count
how many sales were as a result of the promotions thus comparing the sales
amounts to that before the promotion in order to establish whether the
promotion yields an increase in sales.
Looking at the analysis, none of the strategies had more sales during the
promotion period than the sales before promotion. Hence it cannot be concluded
that one strategy is super unlike to other looking at the total sales obtained,
(Kwok, and Xie, 2018). However, the 4th strategy tends to attract more sales at
86,460 dollars than other strategies.

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For the decisions on the effectivity of the promotional strategies, it is the
mandate of the Cereal bar manufacturer Carman’s kitchen to identify specific
goals to be established, (Nelson, 2018). In this case, the Cereal bar manufacturer
Carman’s kitchen strives to continue getting about 20% and above of market
share in the cereal bar’s category. Therefore, the 4th strategy still stands out
since the average Brand market share is 13.31% more than other strategies. This
will help the Carman’s kitchen to continue thriving well in the market using the
4th strategy.
On the retailer’s cost, the Weekly retailer cost per store for the 4th strategy
is 1000 dollars more than the set values for other strategies. This means that the
Carman’s kitchen will have to pay these amounts whether sales are made or not.
As a result, it will make the company work hard in meeting the Carman’s
kitchen demands, (Steup, Dombrowski, and 2019).
As much as a greater percentage of the degree of price sensitivity being
felt among consumers, still the promotion of sales has an occupation within the
market settings, (Armstrong, Kotler, Harker, and Brennan, 2018). Sales
promotion is an effective approach, especially where a new product is to be
introduced in the market. This will give customers opportunities to interact with
the product in a competitive market. Through this sales promotion approach,
total sales will easily be realized as well. On this note, the 4th strategy leads in
attracting the promotion sales of about 59,600 during the promotion period as
well as during the post-promotion period at 26, 860, (Bregolat, 2015). Hence, it
is highly recommended to be one of the best strategies among other strategies.
In the long run, still, the % Gain in category sales is higher at 10.87%
more than other strategies. This is a clear indication that the 4th strategy best fit
as a promotional strategy because of its sustainability, (Grant, 2016). Moreover,
the 4th strategy attracts 11, 667 as the long-term gain in brand sales which is
higher than other strategies. This makes it be a standalone option to be
considered for a promotion strategy.
Linear regression modelling
The linear regressions modeling was used to explain the relationship
between the strategies and the promotion sales when all are brought together.
The results are shown in sheet 2.
The multiple linear regression model is specified as
Where yi is Promotion sales
β0 is a constant
β1x1 is Strategy 1

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β2x2 is Strategy 2
β3x3 is Strategy 3
β4x4 is Strategy 4
The regression equation will, therefore, be specified as:
yi=1.343+0.098 x1+0.052 x2 -0.068 x3 +0.026 x4
This means that holding keeping all others constant:
A unit change in strategy 1 would result in 0.098-unit change in
promotion sales.
A unit change in strategy 2 would result in 0.052-unit change in
promotion sales.
A unit change in strategy 3 would result in -0.068unit change in
promotion sales.
A unit change in strategy 4 would result in 0.026-unit change in
promotion sales.
Finally, looking at the regression analysis, the findings inform of the
strategies in the analysis and it turns out that all the strategies are useful to
predict the promotion of sales. This is a clear indication that the Carman’s
kitchen can employ the use of mixed methods of promotion strategies based on
need.
From the ANOVA table in sheet 2, it shows that all the 4 strategies which
include help to predict the effective promotion of sales, (F= 8.1052, p-value
= .0005297. This implies that the null hypotheses were useless hence reject the
null hypotheses and accept the alternate hypotheses of the strategies.
Recommendations
First and foremost, the 4th strategy should be adopted by the company
since it has the largest sales category, largest brand sales and the largest market
share compared to other strategies. Similarly, the company consider using other
strategies since in one way or the other they are having some significant
contributions to the market share. However, this should be based on need.
Lastly, the company should reduce the weekly retail cost of 1000 dollars while
adopting the 4th strategy.
Conclusion
In conclusion, the company can consider the promotion strategy of 20%
price reduction with a feature in the weekly catalog given the fact that it is
likely to attract new buyers thus leading to the encouragement of the switching
to other brands. At least every strategy works differently.

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References
Armstrong, G.M., Kotler, P., Harker, M.J. and Brennan, R., 2018. Marketing:
an introduction. Pearson UK.
Bernays, E.L., 2015. Biography of an Idea: The Founding Principles of Public
Relations. Open Road Media.
Bregolat, E., 2015. Galloping Economic Development. In The Second Chinese
Revolution (pp. 34-152). Palgrave Macmillan, London.
Drechsler, S., Leeflang, P.S., Bijmolt, T.H. and Natter, M., 2017. Multi-unit
price promotions and their impact on purchase decisions and
sales. European Journal of Marketing, 51(5/6), pp.1049-1074.
Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition.
John Wiley & Sons.
Kwok, L. and Xie, K.L., 2018. Pricing strategies on Airbnb: Are multi-unit
hosts revenue pros?. International Journal of Hospitality Management.
Nagle, T.T. and Müller, G., 2017. The strategy and tactics of pricing: A guide to
growing more profitably. Routledge.
Nelson, J.A., 2018. Economics for humans. University of Chicago Press.
Newell, S. and Marabelli, M., 2015. Strategic opportunities (and challenges) of
algorithmic decision-making: A call for action on the long-term societal
effects of ‘ratification’. The Journal of Strategic Information
Systems, 24(1), pp.3-14.
Pepper, D., 2016. Exploring the strategies organizational leaders need for
implementing successful succession planning(Doctoral dissertation,
Colorado Technical University).
Porter, M.E. and Kramer, M.R., 2019. Creating shared value. Managing
sustainable business (pp. 323-346). Springer, Dordrecht.
Steup, R., Dombrowski, L. and Su, N.M., 2019, June. Feeding the World with
Data: Visions of Data-Driven Farming. In Proceedings of 2019 on
Designing Interactive Systems Conference (pp. 1503-1515). ACM.