Sta589 February 2022

CONFIDENTIAL 1 CS/FEB2022/STA589
UNIVERSITI TEKNOLOGI MARA

FINAL ASSESSMENT
COURSE : MARKETING MODELS

COURSE CODE : STA589
EXAMINATION : FEBRUARY 2022
TIME : 3 HOURS
INSTRUCTIONS TO CANDIDATES
1. This question paper consists of six (6) questions.
2. Answer ALL questions in English. Please write your answer in your own paper using a pen.
3. Students must ensure that their answers are readable.
4. Please check to make sure that this examination pack consists of :

i) the Question Paper
5. This is a three hour test and the submission is through the google link provided by your
lecturer
within 15 minutes after the test end.
DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 8 printed pages
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
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QUESTION 1
a) The fractional root model is given by equation:

Y = a + bX c (with c pre-specified)
i) Name the models at the different parameter of c values.
(3 marks)
ii) Describe three (3) different phenomena that can be accommodated by this model
based on parameter values in (i). You can use sketches or give examples.
(3 marks)
b) The following data shows the yearly advertising cost (RM’000) and sales (RM’000) of a
random sample of 12 mini supermarkets in Shah Alam. Name the most suitable market
response model and justify your answer. (Tips: Use Excel Solver).
(4 marks)
Advertising cost Sales

40 385
20 400
25 395
20 365
30 475
50 440
40 490
20 420
50 560
40 525
25 480
50 510
QUESTION 2
a) One of the most popular approaches to measuring customer value is important ratings.
It is one of the approaches under unconstrained perceptual measures.
i) Explain this approach. Discuss the advantages and the shortcomings of this
approach.
(6 marks)
ii) Give an instance of how this approach is applied by providing the attributes to be
rated by the target respondents.
(4 marks)
b) The brand choice can be represented as a multinomial logit model in the form of:
A
k/ j
e
P =
k/ j A
l/ j
e
l
Interpret the meaning of the terms in the model, the Pk / j , Ak / j in particular.
(4 marks)
c) Consider a scenario where a customer generates margin m, for each period t, the
discount rate is i and the retention rate, r is 100%. The lifetime value of this customer is
 r   r 
given by LV = m  with margin multiple is equal to m =   . Calculate
1+ i − r  1 + i − r 
the constant margin of lifetime value of the customer when:
i) r = 60%, i = 16%
ii) r = 90%, i = 14%
iii) r = 70%, i = 12%
(6 marks)
Question 3
a) Below is perceptual map of middle-aged ladies views on Cadbury chocolate variants,

when asked for their choices for birthday gifts.
i) Write FOUR conclusions on the variants in relation to the selected attributes.

(5 Marks)
ii) Imagine that you own a party deco business that cater for parties and surprises.
Based on the maps, write a potential positioning statement for your own Cadbury
variant or may be your own brand that includes [target segment], [product/concept],
[most important claim] and [single most important support].
(4 marks)
iii) During the festive season such as Hari Raya, you might want to re-position your
product in (ii). Re write your potential positioning statement.
(2 marks)
b) Cluster analysis is an approach to segment the customers. The following table

consists of information of 6 customers with their two attributes Length and Width.
Length Width
1 5.1 3.5
2 4.9 3
3 7 3.2
4 6.4 3.2
5 6.3 3.3
6 5.8 2.7
i) Construct the pairwise distance matrix.

(3 marks)
ii) Based on the distance matrix, construct the dendogram and extract the segment or
group from there.
(6 marks)
Question 4
a) Describe the criteria needed for a targeted market segment.

(4 marks)
b) Explain the approach used to segment customers based on only one attribute.
(3 marks)
Based on Figure 1, answer the following questions.
c) Describe TWO possible types of segmentation used by Subway.

(2 marks)
d) Explain the potential target segment for Subway.

(2 marks)
Figure 1
Question 5
a) The demand for a product in each of the last five months is shown below.
Month 1 2 3 4 5
Demand (‘00s) 13 17 19 23 24
i) Use a two month moving average to generate a forecast for demand in month 6.
ii) Apply exponential smoothing with a smoothing constant of 0.9 to generate a
forecast for demand for demand in month 6.
iii) Which of these two forecasts do you prefer using mean absolute deviation and
why?
(10 marks)
b) Perusahaan Otomobil Nasional Berhad (PROTON) is one of the automobile industry

organizations in Malaysia. The model produced by PROTON is Inspira which was
launched in November 2010. Inspira is classified in a new product category on that time
because Inspira is the latest model in the company and new model to the world. Bass
model in new product forecasting was used to predict the sales.
The values of parameters estimated of Proton Inspira is listed in Table 2. The forecast
results of the Bass model with the actual number of adopters are illustrated in Figure 2.
Table 2: Parameter values
m p q
179242 0.0503 0.4840
Figure 2: Forecasting current sales proton Inspira
i) Use the parameter values for the Bass model in Table 1 to calculate the number of
adopters and the cumulative number of adopters in period 1, 2, and 3, i.e. t = 1,2
and 3. Show your calculation. The Bass model equation is
(8 marks)
ii) Give a conclusion from Figure 2.

(2 marks)
Question 6
a) A manufacturer produces items that have a probability of being defective. Past

experience has shown that some (batches) are of good quality while others are of bad
quality. Furthermore, 80 percent of the batches produced are of good quality, while only
20% are of poor quality. After that, these items are used in an assembly, and their
quality is ultimately evaluated before the completed assembly leaves the facility. The
following are the costs per batch:
Good quality Bad quality

Screen RM1500 RM1500
Do not screen RM750 RM3750
Screening requires scheduling of inspectors and equipment. Therefore, the decision to

screen or not screen must be made 2 days before the potential screening takes place.
Manufacturers may, however, send one item from a batch to a laboratory for testing,
and the results (defective or non-defective) can be provided before the screen or no-
screen decision is made. The tested item is returned to its batch after the laboratory
test. This initial inspection will cost RM125.
Also note that the probability that a random sample item is good quality given the
probability that an item is not defective is 0.835 and the probability a randomly sampled
item is bad quality given that an item in a lot is defective is 0.566. The manufacture
wants to minimize his or her cost.
i) Solve the problem using EMV (Use 3 decimal places for the probability values).
(13 marks)
ii) What is the optimal decision strategy.

(2 marks)
b) Figure 3 shows the advertisement by Pizza Hut to attract the customers to buy the
pizza.
Figure 3
i) Explain how Pizza Hut may practice price discrimination.

ii) State the type of price discrimination applied by Pizza Hut.
(5 marks)
END OF QUESTION PAPER
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CONFIDENTIAL 1 CS/FEB2022/STA589

UNIVERSITI TEKNOLOGI MARA

COURSE : MARKETING MODELS

1. This question paper consists of six (6) questions.

3. Students must ensure that their answers are readable.

4. Please check to make sure that this examination pack consists of :

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

a) The fractional root model is given by equation:

Advertising cost Sales

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

a) Below is perceptual map of middle-aged ladies views on Cadbury chocolate variants,

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

i) Write FOUR conclusions on the variants in relation to the selected attributes.

b) Cluster analysis is an approach to segment the customers. The following table

i) Construct the pairwise distance matrix.

a) Describe the criteria needed for a targeted market segment.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

Based on Figure 1, answer the following questions.

c) Describe TWO possible types of segmentation used by Subway.

d) Explain the potential target segment for Subway.

b) Perusahaan Otomobil Nasional Berhad (PROTON) is one of the automobile industry

model in new product forecasting was used to predict the sales.

Table 2: Parameter values

Figure 2: Forecasting current sales proton Inspira

ii) Give a conclusion from Figure 2.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

a) A manufacturer produces items that have a probability of being defective. Past

Good quality Bad quality

Screening requires scheduling of inspectors and equipment. Therefore, the decision to

ii) What is the optimal decision strategy.

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

i) Explain how Pizza Hut may practice price discrimination.

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

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