HOMEWORK ASSIGNMENT #2

HOMEWORK ASSIGNMENT #2

ANALYZING GEOGRAPHY AND COMPETITORS

This assignment is worth 40 points. It is due on March16 (Wednesday)before 5 p.m. (Eastern Time).

This assignment should be your individual work. Submit the assignment file to a dropbox folder on Desire2Learn (D2L). All assignments have to be typed on the computer. Assignments written by hand and submitted not via D2L won’t be accepted. If you don’t attend class due to an emergency, you may still submit the assignment. Make sure you do it before the due time.

Assignments submitted within 24 hours after the deadline will be graded, but you will lose 30% of the grade. Assignments submitted 24 hours after the deadline will not be accepted.

Answer the following questions.

1. If San Francisco accounts for 1.24 percent of total U.S. population, and has 1.78 percent of total U.S. dishwasher detergent sales, what is the CDI for this market?
What does this index mean? Remember the convention for CDIs and BDIs—they are expressed as whole numbers ( round up or down). (3 points)

2. You are marketing Red Baron frozen pizza, and you are looking for some place to spend $50,000 in surplus advertising budget. You have narrowed the choice down to two markets: Seattle and San Francisco. Calculate the BDI/CDI for both markets. If the surplus can only be spent in one market, based on BDI/CDI ONLY, which market should you choose? (3 points)
Market %US %Red Baron %Frozen Pizza
Seattle 0.9 1.6 1.9
San Francisco 1.7 2.8 3.0

3. You are the Marketing Director for Great Lakes Cherry Treats, a regional company headquartered in Traverse City, MI. You distribute cherry-based snack products made from Michigan cherries exclusively to the markets that surround Lake Michigan. Your competition is primarily fruit snacks and fruited baked goods – called “Fruited Snacks” in this problem.
Assume that these seven markets comprise the total universe for your brand. Likewise, the 6,308.5 (000) Households in the table below represent 100% of the population. The $3 million in sales for Great Lakes and the $27 million for Fruited Snacks also represent totals for the “universe”.
Using data provided in the table, calculate the BDI and CDI for each market. Begin by converting the data to percentages; then calculate the BDIs and CDIs using the formulas illustrated in the examples above.(3 points)

Questions 4 to 7 will require you to perform geographic quadrant analysis. There is no need to draw it.

4. Name the markets from the table in Questions 3 with both high BDI and high CDI;explain which quadrant they fall into and what it means, and advise your client on the best advertising/marketing action in light of your brand and the category. (3 points)

5. Name the markets from the table in Questions 3 with high BDI and low CDI;explain which quadrant they fall into and what it means, and advise your client on the best advertising/marketing action in light of your brand and the category. (3 points)

6. Name the markets from the table in Questions 3 with low BDI and high CDI;explain which quadrant they fall into and what it means, and advise your client on the best advertising/marketing action in light of your brand and the category. (3 points)

7. Name the markets from the table in Questions 3 with both low BDI and low CDI;explain which quadrant they fall into and what it means, and advise your client on the best advertising/marketing action in light of your brand and the category. (3 points)

To answer questions 8 and 9, imagine that Meijerwants to go national to compete with such big players as Walmart.

8. What would be two media choices to advertise nationally if Meijer wants to reach big audience? (2 points)

9. For the majority of American population, Meijer would be a new brand. You know that it wants to gain 3% market share nationally. You also know that big supermarket chains, such as Walmart, spend a total of $13 billion on advertising. Using 1.5 to 2 times rule, calculate how much Meijer would have to spend on advertising. In other words, what would be Meijer’s share of voice? Provide range (e.g., from ___ to ___) in your answer. (3 points)

10. You work for a Lansing building company, Mayberry Homes. The company is expanding to the Grand Rapids market. You need to decide how much to spend on advertising in that area.
You know that your main competitor, Eastbrook homes, earns $6.7 million annually (annual revenue). It spends $160,000 on advertising twice a year (two flights per year, each costs $160,000).
For starters, you want to spend on advertising as much percentage wise as your main competitor.
• First, calculate advertising-to-sales ratio for Eastbrook Homes.
• Second, calculate how much Mayberry Homes would spend on advertising given that its annual revenue is $5.6 million. (3 points)

Use the tables that we discussed in class to answer questions 11-14 about media mix and share of voice. The tables represent 1) total ad spending by copier company and medium ($000), 2) media mix, and 3) share of voice.

Ad spending in $ (000)

Media mix

Share of voice

11. The Media Mix table reveals percent of total budget that each brand allocates to each medium. In contrast, the Share of Voice table reveals which brand’s “voice” dominates each medium, and which brand has less voice in each medium. Be sure to consult the correct table for questions below.
Sharp invested over 72 percent of total budget into two media. Relative to Sharp’s media mix, name the two media and their respective percent of total budget.(2 points)

12. Which brand has the highest share of voice in Cable TV? Lowest share in Cable TV? Give the specific shares for each. (2 points)

13. Which brand has the highest share of voice in Outdoor media? The lowest in Outdoor media? Give the specific share for each. (2 points)

14. Assume you are marketing director representing a totally new brand in the copy machine category, with a $6 million budget.
• Do you see any opportunities here to use unexploited media? Why or why not use them?
• Plan your own media strategy. Where would you spend the most, and why? (5 points)

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