QUANTITATIVE MARKETING AND DRIVEN MARKETING Name: Tutor: Course: Institution: Date: Question 1 phase one Part I The sale of the subscription at $275 will actually bring in more money than selling the set up at $400. This can be shown in the following calculation; To sell the subscription at $400, only 20% of 500 people will be willing to buy…
Part ii One of the main concern that arises from this study is the fact that the sample is quite small considerate the size of the market that is being investigated. Given that the service bend sold is a product that can be sold to all people across the United States, taking a sample of only one thousand people may not have provided a reliable sample to represent the whole population that that is the target market. The other issue that arises from the survey is that it was not targeted at a particular market segment. In this regard, the results are not entirely reliable because some of the respondents may not have answered the questions with openness. To be more effective, the survey should have tried to narrow done to a specific segment of the market. This should have been done by identifying which segment of the market, depending on gender, age, or social class that the subscription would be most relevant to. This, combined with a bigger survey sample would have given a more reliable result. Such a survey can be very subjective if the sample is not big enough and if the sample is not chosen correctly. This is specialized product and therefore doing a shopping mall survey is not the best way to get the relevant information regarding the market for the product because the sample was most likely contaminated by questioning the wrong cohort of respondents. The other issue with the study is that the demonstration that was given to the respondents was not enough and this could mean that they did not have enough time to process the product and make an informed decision. By this virtue, there is a high possibility that most of the customers answered the questions based on gut feeling. For instance, because they did not have enough time to understand the products, they were only concerned about the cost as opposed to understanding the products and then judging the cost based in value the product it is giving them compared to the cost. Phase II Given the elasticity of demand as shown, it would be better to decrease the price of the subscription to increase the rates of subscription. This would mean that the company would need to lower the rates of subscription to the lowest rate possible to increase the revenues through increased subscriptions. There is one special thing about the said product. Since this product is a content product which means that it will be affected by the Metcalfe law of networks which indicates that the usability or relevance of a network increases with the number of network users. For instance, in this case, the more the number of network users, the more useful the network will be and the more it will be able to attract even more subscribers thus increasing the revenues. As the number of subscribers increase, the company will be able to reduce the subscription rates and still make enough profits. The above recommendation is subject to whether or not the demand will continue to be elastic to the maximum or the elasticity of the demand will stop at certain point. If the demand is not as elastic as it is thought to be, it may mean that the recommendation will not be right and that a better pricing strategy would need to be looked at. At the same time, it is important to note that the there will be other factors that may arise as time goes by. For instance, if a similar product comes into the market, the competition will bring new challenges to the market. In this kind of a scenario, it ...
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