Marketing Analytics

Table of Contents

Recommendations

References

Recommendations for Carman’s Kitchen

Based on the analysis conducted in the sections above, a number of recommendations could be suggested to Carman’s kitchen in terms of optimizing their pricing strategy and ensuring improvements within the aspect of revenue generation over time. Considering the figures obtained for the four different pricing strategies, Strategy 4 of reducing the price by 20% along with features in the weekly catalogue was identified as the most beneficial for the long term prospects of the business. While the retailed fixed costs were the highest when using Strategy 4 amounting to $1000, the average weekly category sales were also subsequently highest amounting to 13,037 in the long term.

The average weekly brand sales were also projected to be the highest when using Strategy 4, amounting to 1,554. In terms of the % gain in category sales over the long term, Strategy 4 was further found to be the most suitable, posting an overall gain of 124.21%. Naturally, it would be the most appropriate strategy for Carman’s kitchen to improve their sales and increase their revenue margins in a progressive manner. Based on the strategy, a number of additional recommendations have also been provided, which have been presented below and are as follows:

  • The concept of action paralysis would be relevant, especially since a number of studies have presented how placing similar products with similar prices can reduce the purchase rate (Spektor et al. 2019). Adding minor differences within the different flavours and utilising the 4th strategy of reducing the overall price by 20% and integrating weekly catalogue features would be extremely beneficial for the brand to improve its sales figures.
  • Carman’s kitchen could also rely on the principle of price anchoring, whereby higher priced products could be placed alongside the lower priced products to artificially dive up the sales (Yu et al. 2017). Implementing the 4th strategy would inherently result in a 20% reduction in the price points, thus further increasing the consumer appeal monetarily. Integrating price anchoring measures could further benefit the sales figures as the strategically placed lower priced cereal bars would automatically become more attractive.
  • Implementing the 4th strategy would also be aligned with the marketing principle Weber-Fechner law. Key fundamentals within the theory include how marginal changes in price variables can increase the demand for products and commodities in the long run (Reyes, 2018). Since the price points would be lowered by 20%, Carman’s kitchen could also look towards increasing their outreach and tapping into an economy of scale to sustain the price reduction holistically.
  • The company could also engage in testing different price points of the different bars over time. It could provide more evidence based data, based on which the pricing points could be further regulated and optimized over time. While the projection in theory using the Strategy 4 seem very positive for Carman’s Kitchen, it would be imperative for the company to focus on identifying the correct price points in accordance to the conditional factors within the market.
  • Context based marketing could also be implemented by Carman’s kitchen to ensure that the sales figures are driven up in a progressive manner. Providing the context for the products and adding value to the consumer perception regarding the reduction in price could have a significant impact when considering strategies to drive up the sales figures (Thorpe & Roper, 2019). It would also allow the consumer to make a more informed decision while selecting from the available choices.
  • Bundle marketing could be another feasible option considering how the price points of the cereal bars would come down by 20%. Predominantly a part of neuro-economics, bundle marketing has been efficiently used by companies across the world to cumulatively drive their sales figures within a given product category (Landry & Webb, 2019). Since Carman’s kitchen offered cereal bars and commanded a strong market share, the relevance of the strategy would be significant in the long term.

References for Carman’s Kitchen 

Landry, P., & Webb, R. (2019). Pairwise normalization: A neuroeconomic theory of multi-attribute choice. Available at SSRN 2963863.

Reyes, M. G. (2018). A Marketing Game.

Spektor, M. S., Gluth, S., Fontanesi, L., & Rieskamp, J. (2019). How similarity between choice options affects decisions from experience: The accentuation-of-differences model. Psychological review, 126(1), 52.

Thorpe, A. S., & Roper, S. (2019). The ethics of gamification in a marketing context. Journal of business ethics, 155(2), 597-609.

Yu, L., Gao, Z., Sims, C., & Guan, Z. (2017). Effect of price on consumers’ willingness to pay: is it from quality perception or price anchoring?.

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