February 21, 2012
1. On the Perceptual Map, all segments drift to the lower right. Which segment drifts at the fastest rate? Which drifts at the slowest?
The High End Segment drifts the fastest because they want the newest, fastest, and smallest products. The Low End Segment drifts the slowest because they are more concerned with price and are ok with older, slower, and larger products. Below is a table showing the drift rates for all the Segments.
SEGMENT| PERFORMANCE| SIZE| DRIFT RATE*|
Low End| +0.5| -0.5| 0.7|
Traditional| +0.7| -0.7| 1.0|
Performance| +1.0| -0.7| 1.2|
Size| +0.7| -1.0| 1.2|
High End| +0.9| -0.9| 1.3|
*Rounded to nearest tenth.
2. Each Segment’s Ideal Spot shows the buyer’s preferred coordinates within the circle. Why is the High End Ideal Spot to the lower right of the segment center? Why is the Low End Ideal Spot to the upper left of the Low End segment center? The Ideal Spots in each Segment differ due to the preferences of the consumers that make up the segment. The Ideal Spot for the Low End Segment is to the upper left of the Low End Segment due to its consumers wanting a lower price, and their willingness to give up size and performance to achieve it. On the other hand, consumers in the High End Segment want faster smaller products and are willing to pay a higher price for them. This is why the Ideal Spot for the High End Segment is to the lower right of the segment. We must remember that as size and performance increase so does the price for the product. 3. On a unit demand basis, the Performance Segment is growing at the fastest rate, 19.8% each year. In which round will demand for Performance products exceed the demand for Size products?
If the current growth rate of 19.8% is held constant year over year then the demand for Performance products will exceed the demand for Size products in Year 3.
4. Explain how increasing First Shift...