Brick.pptx

SAP Research Pvt Ltd. Sneha Kundu Anima Sharma Priyasha Dutta

PROFITABILITY ASSESSMENT

INDUSTRY CONDITIONS

MARKETING EXTERNALITIES

1. Profit margin given in the case is assumed to be derived purely from the operations of the firm(average standard for the industry)

2. Higher profit margin in any region would result in high profitability for the firm

1. Market popularity determines the customers' affinity towards buying the product

2. High popularity low marketing spend for product promotions, high profit

3. Statistical check has to be done to ascertain that there is a significant variation in popularity of a sport across regions, basis which marketing spend could be allotted

4. Chi square independence test(p-value=0.007) proves that popularity of the sport varies from region to region significantly

1. Profit margin is one of the important parameters which can be used to explain the managements decision of promoting sales in one region over other

2. In this scenario, overall sales is highly correlated to the average profit margin of the region. However, the picture cannot be explained completely with the available information(90% correlation has been observed between sales & profit margin)

3. Thus leading us to the assumption that along-with the profit margins, there is an external incentive/risk in the business environment which promotes/deters sales in the region

Assumption :

1. Cricket products Core competency of GameInCorp (69% sales contributor)

2. Returns on investment to promote cricket Relatively high, brand image promotes sales

Advantages of 1.High Brand recognition2.Incerese in loyal customer 3.Spontaneous conversion of targeted audience4.High flexibility of modifications of offers5.Low marketing cost6.Better data availability for impact analysis

Disadvantages of 1.No short term ROI generation2.Negetive comments and Hackers attack3. Bad branding can doom the image of company4.Regular maintenance and commitment in updating Social platforms5.Getting involved with social media is time consuming

Advantages Disadvantages

1.No short term ROI generation

2.Negetive comments and Hackers attack

3. Bad branding can doom the image of company

4.Regular maintenance and commitment in updating

Social platforms

1.High Brand recognition

2.Incerese in loyal customer

3.Spontaneous conversion of targeted audience

4.High flexibility of modifications of offers

Advantages Disadvantages


2.Negetive comments and Hackers attack

3. Bad branding can doom the image of company

4.Regular maintenance and commitment in updating

Social platforms

1.High Brand recognition

2.Incerese in loyal customer

3.Spontaneous conversion of targeted audience

4.High flexibility of modifications of offers

Advantages of 1.High Brand recognition2.Incerese in loyal customer 3.Spontaneous conversion of targeted audience4.High flexibility of modifications of offers5.Low marketing cost6.Better data availability for impact analysis

Disadvantages of 1.No short term ROI generation2.Negetive comments and Hackers attack3. Bad branding can doom the image of company4.Regular maintenance and commitment in updating Social platforms5.Getting involved with social media is time consuming

Advantages


5.Low marketing cost

4.High flexibility of

modifications of offers

3.Spontaneous conversion

of targeted audience2.Incerese in loyal

customer

3. Bad branding can doom

the image of company

2.Negetive comments and

Hackers attack

BEST CHANNEL OF COMMUNICATION

• The channel should have a high appeal amongst the audience.

Demographics of GameInCorp customers are indicators of its brand image & strengths

Hence demographics of channel followers should be aligned to the overall firm’s demographics, provided the firm is not using the forum for brand makeover/image change

• The channel should be within the reach of the budget allocated for marketing

CHANNEL SELECTION CRITERIA

Cost Effectiveness

Channel Popularity Target Audience

Out of the 4 channels, Social Media 1 is most

popular(2174 followers)

Average demographics

deviation is lowest for Social Media 1 (~10%)Also 98% of the

followers are less than 40 years

The overall cost for using the

channel comes out to 6400 INR

1 2 3 4

91%74% 77%

69%

Demographics Similarity

Followers of Social Media 1 are ~90% similar to the existing customer base of GameInCorp(demographics-wise)

80% of the social media budget is exhausted by using Social Media 1 and it caters to 90% of the customer base(less than 40 years)

Social Media 1 appears most viable as well as profitable channel at this stage due to its high appeal & customer similarity

IDEATION APPLICATION CONCLUSION

BEST CHANNEL OF COMMUNICATION

• The channel should have a high appeal amongst the audience.

Demographics of GameInCorp customers are indicators of its brand image & strengths

Hence demographics of channel followers should be aligned to the overall firm’s demographics, provided the firm is not using the forum for brand makeover/image change

• The channel should be within the reach of the budget allocated for marketing

CHANNEL SELECTION CRITERIA

Cost Effectiveness

Channel Popularity

Target Audience

Out of the 4 channels, Social Media 1 is most

popular(2174 mn followers)

Average demographics

deviation is lowest for Social Media 1 (~10%)Also 98% of the

followers are less than 40

years

The overall cost for using the

channel comes out to 6400 INR

Social Media 1 appears most viable as well as profitable channel due to its high appeal & customer similarity

Social Media 1

Social Media 2

Social Media 3

Social Media 4

2174

590208 200

Customers (Million) For Social Media 1 Customers aged less than 40 in the income band 20-40k and belonging to urban city have demographic deviation of 0.83*,1.09 ,0.95 and 0.78 for Gender ,Age ,Income & Location respectively averaging to 91% ** Demographic similarity among target audience .

Followers of Social Media 1 are ~90% similar to the existing customer base of GameInCorp (demographics-wise)

Using Social Media 1,90% of the customer base(less than 40 years) can be targeted by using

just 80% + of the social media budget.

Cost of targeting a million customers is just 3INR for social media 1.

Out of the total media budget of 8000 INR 6400 is spent on Social media 1 and remaining can be utilised in social media 3 as it is second most cost effective and target base has a 77% demographic similarity to base of GameInCorp.

*Social media 1 has male female target base of 50% each,60% of brick and mortar store customers are male;50/60=0.83 deviation **(.83+09+95+.78)/3=0.91+ 6400/8000=80%

Social Media 1

Social Media 2

Social Media 3

Social Media 4

2.94

13.78

4.81

20.00

Cost per million targetted customer

Social Media 1

Social Media 2

Social Media 3

Social Media 4

91%74% 77% 69%

Avg. Demographics Devia-tion

Engagement % (+)Response Time (-)

Competitor 1Competitor 4

Engagement % (+)Response Time (+)

---

Engagement % (-)Response Time (-)Competitor 2Competitor 5Competitor 7

Engagement % (-)Response Time (+)Competitor 3Competitor 6Competitor 8

8.25%

8.9 hours

• Average “engagement as % of followers” has been found to be 8.25% from the given data of the 8 competitors

• Average response time is 8.9 hours

• Any competitor should have a high engagement and low response time to be classified as the competitor with robust social media practices

• From the analysis, it can be concluded that Competitor-1 & 4 are front-runners for the position

• Competitor-1’s average response time is 10 times that of Competitor-4. Also 37k follow Competitor-4 as opposed to 27k for Competitor-1

• Hence, Competitor-4 has the most robust social media practices

ROBUST SOCIAL MEDIA PRACTICES

SOCIAL MEDIA MARKETING

ROBUST SOCIAL MEDIA PRACTICES

0 5 10 15 20 25 300%

5%

10%

15%

20%

25%

Competitor 1


Competitor 4

Competitor 5


Competitor 8

Average Response Time(in hours)

Enga

gem

ent a

s % o

f fol

low

ers

8.9

8.25%

Brick.pptx

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