FUJI FILM INTRODUCES APS - A CASE STUDY

Subject: Quantitative Techniques I Faculty: Prof. U.K.Bhattacharya Presenters: Group C, Section C

Agenda
Case Overview
Question 1 / 2 / 3:
Factual Analysis Solution Conclusion

Case Overview
Fuji Film Advanced Photo System
Launch of 24 mm system in February 1996

Problems in market launch

Market Positioning and Customer Promotion

1998: 20% of APS market share

Question 1: Factual Analysis

Facts
2003: 40% expected market share Sample Selection of 30 customers

Questions
Expected APS customers

Probability x 6
Given x 6, comment on market share

Question 1: Solution
Expected no. of APS Customer:

No. of customers in the sample: n = 30 Market share of APS: 40% Probability of a customer being an APS customer: p = 0.4 => Expected no. of APS customers in sample: n*p = 30*0.4 = 12 Customers

Question 1: Plot
Binomial Distribution: n=30, p=0.4
0.1600 0.1400 0.1200

Probability(x)

0.1000 0.0800 0.0600 0.0400 0.0200 0.0000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 x value

x 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

Probability(x) 0.0000 0.0000 0.0000 0.0003 0.0012 0.0041 0.0115 0.0263 0.0505 0.0823 0.1152 0.1396 0.1474 0.1360 0.1101 0.0783 0.0489 0.0269 0.0129 0.0054 0.0020 0.0006 0.0002 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

Question 1: Solution
Probability X 6:

P(X 6)=P(x=0)+ P(x=1)+ P(x=2)+ P(x=3)+ P(x=4)+ P(x=5)+ P(x=6) => Probability of 6 or fewer customers purchasing an APS camera P(X 6) = 0.0172

Question 1: Solution
Given x 6, comment on market share:

Calculated Probability: P(X 6)=0.0172

This probability is not enough evidence to prove that the APS market share is not 40%. Reason: The probability value computed is based on only a single instance of data sampling from the population. Hence it cannot be generalized using the concept of long-run average.

Question 1: Conclusion
Expected no. of APS customers in sample: n*p = 30*0.4 = 12 Customers
Probability of 6 or fewer purchase of an APS

camera P(X 6) = 0.0172

Given x 6, we cannot conclude that the

market share of APS camera is not 40%

Question 2: Factual Analysis

Facts
Customers complain on late shipment Customer

complaint at 2.4 complaints/100,000 rolls. One batch of 100,000 yields 7 complaints

Questions
Has the average rate of complaints increased? Produce the Poisson distribution Interpret the results

Question 2: Plot
P (x) = (e- . x ) / x!

Poisson Distribution : Lambada = 2.4

0.3000 0.2500 0.2000 0.1500 0.1000 0.0500 0.0000 1 2 3 4 5 6 7 8 9 x value 10 11 12 13 14 15 16 17

x Probability(x) 0 0.0907 1 0.2177 2 0.2613 3 0.2090 4 0.1254 5 0.0602 5 0.0602 6 0.0241 7 0.0083 8 0.0025 9 0.0007 10 0.0002 11 0.0000 12 0.0000 13 0.0000 14 0.0000 15 0.0000 16 0.0000 17 0.0000

Probability

Question 2: Solution
Has the average rate of complaint increased?

For x = 7, P(x) as per Poisson Distribution is 0.0083

Since the probability is very low, we cannot conclude that average rate of complaints has increased. The occurred event is a random occurrence.

Question 3: Factual Analysis

Facts
52 products launched Objective 1: Revenue growth - 34 products Objective 2: Creation of Market / Customer

satisfaction - 18 products 10 successful products: 7 meet objective 2 while 3 meet objective 1 Premise (given): Objective 1 products have a higher chance of failure than objective 2 products

Question 3: Problem
Questions
Probability of the given result occurring by chance Comment on the premise regarding the

importance of the main objective

Question 3:Solution
52
Success: 10 Failure: 42

Objective 1 34
3 31

Objective2 18
7 11

According to Hypergeometric Distribution Probabilities, P(x) = ACx . N-ACn-x / NCn

Question 3:Solution contd..

P(x) = ACx . N-ACn-x / NCn Here, N = 52 , n = 34, A = 10, x = 3 P(x=3) = 0.01203 So the probability of this event occurring by chance is 0.01203

Question 3: Conclusion
The premise: Products aimed for revenue growth are more likely to fail than products aimed to create a new market or customer

satisfaction. The event:

ONLY 3 out of 34 products aimed for revenue

growth succeed. AS MANY AS 7 out of 18 products aimed for creating new market or achieving customer satisfaction succeed.

Question 3: Conclusion contd..

The event is in alignment with the premise

given in the problem But the probability of the event is VERY LOW ! Therefore, we cannot conclude that the premise is true. Thus we cannot say that the average number of complaints per batch has increased.