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sample team project write-up

sample team project write-up - 1 Frozen Yogurt Oligopoly...

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1 Frozen Yogurt Oligopoly Provo Frozen Yogurt Market Situation Does it seem like a new frozen yogurt store is opening up on every block? We’ve noticed the reemergence of the frozen yogurt trend and were intrigued by its rapid growth. In the Provo area, it seems like the best-known frozen yogurt businesses are Yoasis, Spoon Me, Red Mango, and FroYo. Because frozen yogurt seemed to be a very homogeneous product to us, we wondered if this was a situation where a few competitors were competing on price and brand differentiation—a Bertrand oligopoly. We decided to dig down and find out if there was any way that these businesses could price more effectively or differentiate themselves to better appeal to the student population that is prevalent in this area. Primary Data To find out what consumer perceptions were for each of these businesses, we surveyed 72 BYU students or similar-aged people living in the Provo area. 60% of respondents were male, and 40% were female. We found that the top three factors causing people to choose one frozen yogurt store over another were price , taste of frozen yogurt , and location (see Exhibit 1 ). Interestingly, the option “more healthy” was chosen the least often as a factor that caused differentiation between brands.
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2 Yoasis and Spoon Me were the brands most familiar to our respondents (see Exhibit 2 ). This makes sense because location was one of the most important factors in brand choice for our respondents and these two companies are closest in proximity to BYU. We then completed a general market-wide analysis to better understand the four companies operating in this market. After completing this analysis, we were able to dig down and really compare consumer preferences between Spoon Me and Yoasis to find opportunities for more effective pricing strategies. Market-Wide Analysis (Exhibit 3) To extract consumer preferences and calculate a profit maximizing price for each company, we had respondents rank the four companies by allocating 100 points according to their preferences. Once the companies were ranked, we took the average of these points to find the mean for the frozen yogurt preference scale. We then found the prices that the companies charge for their products and found the mean selling price for a serving of frozen yogurt. We took the difference from the company’s awarded point score and the mean point scale and used this percentage to find the profit maximizing price by applying this same percentage difference to the mean yogurt price.
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