Topic: Kirin Case (Segmentation-Targeting, Conjoint)
Draft deadline: Please note, you are supposed to provide next draft before it is due
Purpose and Managerial Context: This exam is designed to test your ability to integrate your knowledge about conjoint analysis and segmentation analysis, and to practice data-driven managerial decision-making. Imagine you are the VP of Marketing for Kirin USA, and your goal is to increase US sales of Kirin beer by at least 30% without changing price (i.e., additional 300,000 – 400,000 cases of beer each year from current 1 million sales volume). You can find the following files you need to use for this exam on Moodle under link “Exam 2 Submission”: a. Case: Kirin USA, Inc: Ichiban Shibori b. Kirin stated preferences.xls c. Kirin conjoint preferences.xls Basic Instructions In the write-up, please clearly number and answer each question.
To submit your answers, please upload the file (preferably a pdf file) through the link “Exam 2 Submission” on Moodle.
You can assume the reader is familiar with the analyses and thus you DO NOT need to submit your excel file to show the detailed analysis outputs. However, please copy and paste any tables or figures necessary to support your answers. The questions listed below are intentionally open-ended. As is the case with real data, there is some murkiness about the right answer, and you need to use data analysis and judgment to come up with the strategy you would choose. Data Summary We now describe the data. As outlined in the case, Kirin has conducted three surveys of import-beer drinkers. We will only use data from two surveys, described below, for this exercise.
Consumer stated preferences (in Kirin stated preferences.xls file) The data consists of 317 consumers rating the importance of 21 different beer attributes, one attribute at a time on a 9-point scale (where 0 means “not at all important to me,” and 9 means “very important to me”). This data was obtained through traditional survey asking people to indicate the importance of product attributes. The worksheets in the file include: Raw segmentation data: the ratings on 9-point scales. Please see the case Exhibit 1 for the list of attributes. Discrimination data: each person also reported their beer consumption, demographics, and psychographic information (such as “I like to take chances”). Please see the case Exhibit 2 for the list of measures. Consumer Preferences revealed through Conjoint Analysis (in Kirin conjoint preferences.xls file) The data consists of the estimated preference part-worths of the same 317 consumers. Please see the case Exhibit 4 for the attributes and levels in the conjoint study. The worksheets in the file include: Conjoint Template: including the attributes and levels in the conjoint study (rows 4 thru 11), the estimated preference part-worths (rows 14 thru 331), existing product designs (rows 334 thru 341), and Kirin new product design (rows 344 thru 351). Discrimination data: This is the same “Discrimination data” in the Kirin stated preferences.xls file mentioned above. Questions about Kirin’s Marketing Strategy What is your strategy (segmentation and targeting) for introducing the new Ichiban Shibori concept into the US import beer market? More specifically, answer the following questions based on your analyses. Information given in the case is sufficient for you to address these questions. You do not need to do additional information research. Note: make sure you correctly identify the range of data for all of your analyses. DO NOT blindly trust the default range by the software. 1.1 (12 points) Consider segmenting import beer drinkers using generic needs information collected through traditional survey (Kirin stated preferences.xls).
a. How many clusters would you recommend? Justify your choice. (2 points)
b. Which segment would you consider to fit with the new Ichiban Shibori beer? Explain why. (5 points)
c. Would you agree that the import beer market could be segmented in a useful way using the traditional stated preferences data? Explain why or why not. (5 points) 1.2 (18 points)
Consider segmenting import beer drinkers based on the revealed preferences from the conjoint study (Kirin conjoint preferences.xls). Note: use the estimated part-worths preferences as the segmentation data (range A14-W331).
a. Identify the appropriate number of segments. Justify your choice. (3 points)
b. Describe how different each segment is in terms of import beer preferences. (5 points)
c. Give the segments managerially useful names and note the size of each segment.
Hint: you will need to know the characteristics of each segment in order to come up with names. The segment names can be given based solely on beer preferences if discriminant variables do not provide sufficient distinctions across different segments. (5 points)
d. Select which segment you would like to target with the new Ichiban Shibori beer concept. Explain your targeting decision. (5 points) 1.3 (20 points)
Using the market simulator in conjoint analysis, predict market shares for the proposed new Kirin beer and another five alternative options that Kirin could consider varying the calorie and packaging designs. Note: use the “share of preference rule” under “Choice Rule” when running the market share simulation.
a. Report the market shares for each of the six new product combinations. (2 points)
b. Report which combination maximizes Kirin’s total market share. (2 points)
c. Given the product design that maximize market share in point b, how would it affect the volume sales of the original Kirin beer? Treat the existing product profile “Sapporo/Kirin Old” as a representation of the original Kirin beer. The sales of the original Kirin is one million cases per year (page 5 of the case). (5 points)
d. With the original Kirin beer and the new proposed beer (in point b) both in the market, could Kirin reach the goal of increasing the US sales by 300,000 – 400,000 cases each year?
You will need to convert the predicted market shares you get from the conjoint simulations into more realistic market shares taking into account consumers’ awareness and product distribution levels. Information about awareness and distribution is given in Exhibit 6 and the total volume sales of the US import beer market is estimated to be 50 million cases in 1990 (page 7 of the case). To convert the market shares, fill out the last two columns of the following table using the predicted market shares (denoted as ms from conjoint simulation): the graphs please look at the file name question 3d Once you compute the last column “converted market share” in the table above, you could then calculate the total sales for Kirin Old and proposed new Kirin. (7 points)
e. Are the original Kirin and the proposed new Kirin competing for the same segment(s) of consumers? (4 points)
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