Decision Analysis: Marketing Plan for New Hair Shampoo Brand, Dubai

This assignment focuses on decision analysis within a marketing context, specifically for the introduction of a new hair shampoo brand by a Haircare company in Dubai. The student is tasked with developing a marketing plan, choosing between a step-by-step or concentrated product introduction. The assignment requires the construction of a payoff table based on profit projections under high and low demand scenarios, along with the application of various decision-making criteria. The student determines optimal decisions using the Maximax, Maximin, Regret, and Maximum Likelihood criteria, providing a comprehensive analysis of the potential outcomes and strategic choices involved in launching the new product. The analysis reveals that the highest profit would be for step-by-step introduction and expect a high demand. The profit for the organization would be $5,00,000.

Running Head: DECISION ANALYSIS
Decision Analysis
Name of the Student
Name of the University
Author Note

1DECISION ANALYSIS
Table of Contents
Answer 1..........................................................................................................................................2
Answer 2..........................................................................................................................................2
Answer 3..........................................................................................................................................2
Answer 4..........................................................................................................................................3
Answer 5..........................................................................................................................................3
Answer 6..........................................................................................................................................3

2DECISION ANALYSIS
Answer 1
The payoff matrix can be represented as:
Profit Low Demand High Demand
Probability 0.7 0.3
Step by Step Introduction $1,00,000 $5,00,000
Concentrated Introduction $4,00,000 $2,00,000
Answer 2
Profit Low Demand High Demand
Probability 0.7 0.3 Best
Step by Step Introduction $1,00,000 $5,00,000 $5,00,000
Concentrated Introduction $4,00,000 $2,00,000 $4,00,000
The maximum of Step-by-Step introduction process is $5,00,000.
Similarly, the maximum of Concentrated introduction process is $4,00,000.
The maximum when considering both the processes is $5,00,000.
Thus the optimal solution for maximum criterion is $5,00,000.
Answer 3
Profit Low Demand High Demand
Probability 0.7 0.3 Worst
Step by Step Introduction $1,00,000 $5,00,000 $1,00,000
Concentrated Introduction $4,00,000 $2,00,000 $2,00,000
The minimum of Step-by-Step introduction process is $1,00,000.
Similarly, the minimum of Concentrated introduction process is $2,00,000.
The maximum when considering both the processes is $2,00,000.
Thus the optimal solution for maximin criterion is $2,00,000.

3DECISION ANALYSIS
Answer 4
Profit Low Demand High Demand
Probability 0.7 0.3
Step by Step Introduction $1,00,000 $5,00,000
Concentrated Introduction $4,00,000 $2,00,000
Regret Table
Profit Low Demand High Demand
Probability 0.7 0.3 Maximum
Step by Step Introduction
$4,00,000 - $1,00,000
= $3,00,000
$5,00,000 - $5,00,000
= $0
$3,00,000
Concentrated Introduction
$4,00,000 - $4,00,000
= $0
$5,00,000 - $2,00,000
= $3,00,000
$3,00,000
Thus the optimal solution for Regret Criterion the value is $3,00,000.
Answer 5
Profit Low Demand High Demand
Probability 0.7 0.3 Average
Step by Step Introduction $1,00,000 $5,00,000
($1,00,000 + $1,00,000)/2
= $3,00,000
Concentrated Introduction $4,00,000 $2,00,000
($4,00,000 + $2,00,000)/2
= $3,00,000
The optimal solution for maximum likelihood criterion is $3,00,000.
Answer 6
Profit Low Demand High Demand
Probability 0.7 0.3 Expected Return
Step by Step
Introduction $1,00,000 $5,00,000
$1,00,000*0.7 + $5,00,000*0.3 =
$2,20,000
Concentrated
Introduction $4,00,000 $2,00,000
$4,00,000*0.7 + $2,00,000*0.3 =
$3,40,000
Best Decision $4,00,000 $5,00,000
$4,00,000*0.7 + $5,00,000*0.3 =
$4,30,000
The maximum of Expected Return = $3,40,000.
The Best Decision = $4,30,000.

4DECISION ANALYSIS
Thus, optimal decision based on Expected Value = $3,40,000 - $4,30,000 = -$90,000
From the above analysis it is found that the highest profit would be for step-by-step introduction
and expect a high demand. The profit for the organization would be $5,00,000.