Pulse cоmpetes in the spоrts-drink cаtegоry. The following infogrаphic compаres its market performance across two years. Metric Year 1 Year 2 Total category unit sales 80 million 100 million Pulse unit sales 12 million 13 million Leading competitor unit sales 20 million 24 million Households in target market 40 million 40 million Category-buying households 10 million 14 million Pulse-buying households 3 million 3.25 million Management reports: “Pulse gained one million unit sales and 250,000 buyers, so the brand strategy is working.” Write an essay evaluating management’s conclusion. In response: Calculate Pulse’s market share for both years. Calculate Pulse’s relative market share against the leading competitor for both years. Calculate category penetration and Pulse brand penetration for both years. Explain the difference between primary demand and selective demand and interpret what the infographic suggests about each. Explain how Pulse can gain sales and buyers while still losing competitive position. Recommend a focused strategic priority for Pulse—such as category-building, gaining customers from competitors, retention, increasing purchase frequency, distribution expansion, or price/value repositioning—and defend your choice using the data. NOTE: Points assignment Criterion Points Market share and relative market share 5 Penetration calculations 5 Primary versus selective demand 4 Explanation of absolute growth with share loss 3 Strategic recommendation 3
A brаnd mаnаger fоr Altitude, a premium bоttled tea, prоvides the following competitive pricing infographic: Brand Price per bottle Unit market share Altitude $3.00 15% TeaLeaf $2.70 20% Fresh Brew $2.40 30% Value Tea $1.80 35% Altitude’s direct variable cost is $1.35 per bottle. The brand manager says: “Altitude is priced too high because it is above the category average. We should reduce the price to $2.70 to match TeaLeaf.” Evaluate the recommendation. In response: Calculate the category’s weighted average price paid. Calculate Altitude’s price premium over the weighted average price paid. Calculate Altitude’s price premium over TeaLeaf, its main competitor. Calculate Altitude’s current unit margin and margin percentage. Explain why a price premium does not, by itself, establish that Altitude is overpriced. Recommend whether Altitude should match TeaLeaf, maintain its current price, or conduct a targeted price test. Explain what additional evidence you would need before changing the brand’s price. NOTE: Point assignment Criterion Points Weighted average price paid 4 Price-premium calculations 4 Margin calculations 3 Interpretation of premium 4 Recommendation and additional evidence 5