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ASSIGNMENT 1 (MKTG 347) Total Points = 100 Neatness and Visual Quality of Written Presentation = 5 bonus points (You may cut and paste MS excel...

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ASSIGNMENT 1 (MKTG 347) Total Points = 100 Neatness and Visual Quality of Written Presentation = 5 bonus points (You may cut and paste MS excel outputs, if necessary, onto a single MS word file containing your answers. However, please report the answers to your questions separately on the main word document. Do not attach separate excel files) 1. XZW Inc. is a company that follows a proactive new product development strategy. The typical costs and likelihood of success at each stage of the proactive process have been documented in the table below. Use the table to answer the following questions: a. Compute the overall probability of success at the start of a new project (10 points) b. Fill in the yellow cells with the appropriate numbers (10 points) c. What is the expected total cost incurred by XZW to launch one successful product in the market? ( 10 points) (For all parts of this question, show your detailed calculations separately) Table 1. Cost accrued at each stage (per product that passes through the stage) Likelihood of success # of products required at the start of each stage to achieve a single successful launch Expected cost at each stage to finally achieve a single successful launch Opportunity identification $700 50% ? ? Design $4,000 50% ? ? Testing $2,000 70% ? ? Introduction $6,000 60% ? ?
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2. For a product, M=1000, P=0.02, and Q= 0.1. The Bass Model formula is S(t) = P(M-Y t-1 )+Q(Y t-1 /M)(M-Y t-1 ). a. Fill in the cells in blue with the appropriate numbers (60 points). b. In which period does the product achieve its highest sales? (In other words, find out (t) when S t is at its maximum? (10 points) Period (t) Innovators Imitators Sales in period t S t Cumulative Sales till period t-1 , Y t-1 Y 2 t-1 Remaining Potential( M-Y t-1 ) 0 0 0 0 0 0 1000 1 (0.02)*1000=20 0 20 0 0 1000 2 (0.02)*980=19.6 (0.1)*(20/1000)*(980)=1.96 19.6+1.96=21.56 20 400 980 3 ? ? ? ? ? ? 4 ? ? ? ? ? ? 5 ? ? ? ? ? ? 6 ? ? ? ? ? ? 7 ? ? ? ? ? ? 8 ? ? ? ? ? ? 9 ? ? ? ? ? ? 10 ? ? ? ? ? ? 11 ? ? ? ? ? ? 12 ? ? ? ? ? ? 13 ? ? ? ? ? ? 14 ? ? ? ? ? ? 15 ? ? ? ? ? ? 16 ? ? ? ? ? ? 17 ? ? ? ? ? ?
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