IBMRS108R1 Answers Class Assignment 1

IBMRS108R1 Answers Class Assignment 1 - Opening luxury ice...

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confectionery IBMRS108R1 Answer Class assignment Research goal Advise on the feasibility of the Rotterdam outlet and the location of this outlet (one of the four possible location). Feasibility is defined as: The predicted yearly sales of the outlet should be at least € 500.000,- Important conditions 1 1. The future yearly sales 2 can be estimated 3 based 4 on 5 : Estimated average customer spending per transaction x Estimated number of transactions per year x Estimated market share Estimated average customer spending per year x Estimated number of customers per year x Estimated market share The first estimation method is in theory more refined then the second one, but it requires more detailed information. 2. Competitor information is available and considered to be reliable enough 6 . 3. Business model is given not to be subjected for research. 4. Product range is given not to be subjected for research. Unit of analysis The aggregate estimates of spending of individual customers decides here the issue to have or not have an outlet in Rotterdam. Therefore the unit of analysis is the predicted sales of the outlet. Unit of observation The unit of observation depends here on whether you estimate spending per transaction or per customer and if you base your estimation on individual customer spending or household spending. Applying the first estimation procedure you have to sample transactions of potential customers. For the second estimation procedure you 1 Making your restriction or condition clear is essential. It gives you and your reader focus. 2 Customer spending should exclude VAT 3 Depending on your unit of observation the predicted customer spending can be based on aggregating individual customer spending or aggregating household spending. 4 Estimates can be on statistics on a national level, but preferable is that estimate are based on estimates of consumer within the regarded “catchment area”. For instance all consumers living within a 20 km radius. 5 Spending has to estimated separately for luxury ice cream and chocolate confectionary. 6
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This note was uploaded on 11/16/2010 for the course IBMS IBMRS108R1 taught by Professor Nielsen during the Fall '09 term at Rotterdam Business School.

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IBMRS108R1 Answers Class Assignment 1 - Opening luxury ice...

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