Reference no: EM133203570

Assignment: Marketing Price Optimization Pricing Demand Model Excel Project

Learning Outcome

1. Quality of presentation of answers (high quality, well-formatted writing, charts, table? or poorly-structured writing, screenshots of improperly formatted spreadsheets for a final report?)

2. Quality of presentation of answers (high quality, well-formatted writing, charts, table? or poorly-structured writing, screenshots of improperly formatted spreadsheets for a final report?)

Part I: FYRE IT UP!

Good news! You've been hired as a consultant of the hottest new EDM festival to hit post peak pandemic - the First Annual Definitely Not Fyre Fest Festival! Woooooooooooo. Your task is to offer some insight about how to price their individual ticket sales & the pricing for their VIP upgrade experience. To aid you in this task, you've been provided some historical information about how similarly-sized EDM festivals with similar levels of artists/experiences have handled pricing in the past few years.

Use this file: Pricing Demand Model - ASSIGNMENT - Def Not Fyre Fest.xlsx

NOTE: This Excel file is just the raw data you'll be using for your own spreadsheet. Unlike some previous assignments, there is nothing "pre-built" to get you started. You're building a spreadsheet model from scratch!

Your submission for this part should be two pages (max) double-spaced report summarizing your calculation strategy and results (you should thoughtfully include tables, figures, charts, and screenshots to illustrate and support your analysis... however, they do not count toward this page length requirement). The complete content of the report is up to your discretion, but management does want clear answers to the following questions:

i. The Def Not Fyre Fest is happening no matter what. If the goal is to maximize profits, what is your recommended price for base tickets &the VIP upgrade experience? How many tickets & VIP upgrades will we sell?

ii. If Def Not Fyre Fest is merely trying to break even and maximize attendance this year (setting the stage for financial success in later years), does your recommendation change?

iii. What is the precise mathematical model [write it out] you used for the Ticket Price & Demand relationship? The Vip Upgrade Price & Demand relationship?

iv. Related to the question above, management wants a clear justification for why you selected the mathematical models that you did. Further, management wants to know at least two other math models you tested as alternatives. Show those models, and describe the optimal pricing strategies if these alternative models were used instead.

v. Your submission should also include a full screenshot that depicts the entirety of your Excel spreadsheet model. Management very much expects it to look well-organized and tidy.

Part II: BUNDLE IT DOWN!

Good news! You've been hired as a consultant for a company that sells exercise equipment & coaching services. Their three main products are a set of free weights, an elliptical machine, and online training services. They want pricing help. Your goal is to provide them with data-driven recommendations for the price to set for each product individually as well as double & triple pricing bundles.

Use this file: Price Bundling - Gym Equipment - ASSIGNMENT.xlsx

i. This Excel file is structured in a similar manner as the one used in the Price Bundling video content provided in the Module. This means you can use that tutorial to aid you substantially with designing this spreadsheet.

ii. Inside the spreadsheet, you'll see sections "Step 1, Step 2, and Step 3," these sections are mandatory to connect the inputs (prices) to output (profits).

iii. Step 4 and Step 5 are necessary to use Solver -- you need a system in place to alert Solver of important constraints (for example, a "double bundle" for two products obviously shouldn't cost MORE than each product individually... Solver needs constraints to make sure that sort of pricing silliness doesn't happen!).

iv. Columns B,C, and D represent survey data that depicts the maximum price each prospective customer is willing to pay for the product (these 500 consumers are a representative sample of a market of about 2,00,000 individuals).

Your submission for this part should be two pages (max) double-spaced report summarizing your calculation strategy and results (you should thoughtfully include tables, figures, charts, and screenshots to illustrate and support your analysis... however, they do not count toward this page length requirement). The complete content of the report is up to your discretion, but management does want clear answers to the following questions:

i. What is your pricing recommendation? What is the estimated total profit? What % of customers will purchase each type of product?

ii. ALTERNATIVE SCENARIO: What is management is determined to give away online training for free to anyone who buys one or more of the other products? Does your pricing strategy change? How does that impact profits?

iii. ALTERNATIVE SCENARIO: What if management thinks offering double bundles is too complex, so they want to only offer a triple bundle? Does your pricing strategy change? How does this impact profits?

iv. Management needs some explanation and justification for how you derived your pricing recommendations. Convince them that your approach and methodology is sound