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Decision Anaysis Assigment

The document discusses the unexpected weak negative correlation between brand reputation and new product prices, as well as used product prices, contradicting the expectation that stronger brands should command higher prices. It suggests that managerial decisions should focus on uncovering hidden variables affecting this relationship, including consumer perception and marketing strategies. Recommendations include conducting market research, reassessing product positioning, analyzing pricing strategies, and investing in targeted marketing campaigns.

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mdilki650
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2 views

Decision Anaysis Assigment

The document discusses the unexpected weak negative correlation between brand reputation and new product prices, as well as used product prices, contradicting the expectation that stronger brands should command higher prices. It suggests that managerial decisions should focus on uncovering hidden variables affecting this relationship, including consumer perception and marketing strategies. Recommendations include conducting market research, reassessing product positioning, analyzing pricing strategies, and investing in targeted marketing campaigns.

Uploaded by

mdilki650
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Positive Correlation Expected Between Brand and New Price

 Expected Outcome:

In general, a strong brand reputation often correlates with higher prices for new products.
Consumers premium brands with better quality, features, or durability, which typically
explain a higher price point.

 Observed Outcome:

The data analysis reveals a weak negative correlation between the brand and the new
price (−0.00924). This suggests that brand reputation is not influencing new product
prices as expected

2. Positive Correlation Expected Between Brand and Used Price

 Expected Outcome:

Similar to new prices, stronger brands should retain higher value in the secondary market
due to suppose quality and reliability. Consumers are often willing to pay more for used
products from trusted brands.

 Observed Outcome:

The analysis shows a weak negative correlation between the brand and the used price
(−0.02257). This indicates that stronger brands do not significantly influence higher
resale values

4) After a detailed analysis of the dataset, using correlation analysis between the brand and the new
product price, we notice that there was a weak negative correlation (−0.00924) between the two.

The question is: "Why is there no significant relationship between the brand and new product price,
considering that a strong brand reputation often correlates with higher prices?"

6. Managerial decisions

o Strategic decision

We have to address weak negative correlation (-0.00924)


Managerial Decisions

To address the weak negative correlation (−0.00924) between the brand and new product price,
managerial decisions must focus on uncovering hidden variables influencing the relationship.
These could include consumer perception, product positioning, marketing strategies, or price
elasticity. Actions to consider include:

1. Market Research and Consumer Insights:


Conduct surveys and focus groups to understand consumer attitudes toward the brand and
its pricing strategy. This will help identify gaps in brand value perception that might
weaken the correlation.
2. Product Positioning:
Reassess how the new product is positioned in the market. If the brand is premium,
ensure the product’s features, design, and marketing align with this perception.
3. Pricing Strategies:
Analyze competitors' pricing and use dynamic pricing strategies to align product prices
with perceived value while remaining competitive.
4. Marketing Campaigns:
Invest in targeted campaigns that reinforce the brand's value proposition. Highlight
unique features and advantages to strengthen the perceived connection between the brand
and product price.

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