ASSIGNMENT COVER SHEET

PROGRAMME : MASTER OF BUSINESS ADMINISTRATION

SUBJECT CODE AND : ECN5243 Economics and quantitative analysis
TITLE
ASSIGNMENT TITLE : Assessment 3

LECTURER : Dr Calvin Cheong ASSIGNMENT DUE DATE: 22/08/2023

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1. I hereby declare that this assignment is based on my own work except where
acknowledgement of sources is made.
2. I also declare that this work has not been previously submitted or concurrently submitted
for any other courses in Sunway University/College or other institutions.
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1. Tafhim Ur Rashid 22111579 tafhim 20/08/2023
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E-mail Address / Addresses (according to the order of names above):

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Contents
Management Summary......................................................................................................................3
1. Introduction:..............................................................................................................................5
2. Report Objective........................................................................................................................7
3. Data Analysis.............................................................................................................................8
3.1. Cryo........................................................................................................................................8
3.2. Visio:.....................................................................................................................................11
4. Conclusion...............................................................................................................................14
5. Recommendation.....................................................................................................................16
5.1. Marketing Strategy................................................................................................................16
5.1.1 Specialization...........................................................................................................16
5.1.2 Differentiation..........................................................................................................16
5.1.3 Segmentation:...........................................................................................................17
5.1.4 Concentration...........................................................................................................18
5.2 Pricing Strategy:....................................................................................................................19
6. References:..............................................................................................................................20
7. Word Count:............................................................................................................................20

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Management Summary

The development of digital and mobile technology has significantly impacted human
existence, leading to the rise of wearable technologies. The global market for wearable
technology was valued at USD 61.30 billion in 2022 and is projected to grow at a CAGR of
14.6% from 2023 to 2030. The consumer electronics application category had the highest
revenue share at 48.95 percent in 2022. The market for wearable devices, particularly
wristwear and eyeglasses, is gaining popularity due to the growing demand for consumer
electronics in the fitness sector and healthcare industry. However, the lack of effective
batteries and size restrictions pose challenges. The market for wearable tech is predicted to
expand substantially over the next few years due to rising interest in IoT devices and
widespread smartphone usage. Intech, a Malaysian startup technology business, has created
two new wearables to address two key issues: high body temperature remediation by
CRYO wristwatch and visibility in darkness by VISIO infrared-enabled eyeglass. The
report analyses market survey data, using linear and multiple regression methods to
determine the significant relationship between the dependent variable (unit sold) and other
independent variables. The regression equation is chosen based on the relationship strength
and variable type to forecast maximum output. A marketing and pricing strategy for the
chosen product is provided at the end of the report. The Cryo market survey analysis
reveals a strong relationship between unit sold and CP-Price, with a larger R2 value and
statistically significant results. A 50$ increase in CP-price will result in 0.02542 units of
additional sales. When combined with price and AD-SM with Cp price, the relationship
becomes stronger with larger Adj R2 and smaller P value. Sales increase with CP-Price and
product price, while decreases with social media advertising. No correlation is visible in the
scatterplot. Prices are concentrated at 230-240 range, with CP-Prices at 210-220 and AD-
SM at 0-2k. Visio data shows a similar trend, with Cryo having slightly better Adj R2
value. The positive relationship with price predicts inelasticity in demand over price
change, and strong connections with CP-Pricing aid in benchmarking initial prices for
maximum sales. The negative association with AD-SM indicates potential for improvement
in the marketing plan and these makes Cryo the chosen product to launch first. To launch
Cryo, a thorough marketing strategy should be established, which have few major
requirements including 1. Develop a marketing plan that includes statistical relationship

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with CP-Price, AD-SM, and price. 2. Develop a marketing plan that includes right use of
advertising platforms and content. 4. Monitor and adjust the marketing plan as needed.
Intech's Cryo smartwatch offers a unique selling proposition by combining temperature
lowering technology with data collection and display instruments. This makes it a niche
market, targeting B2C customers in hot and tropical countries and B2B potential in the
health and wellness industry. To differentiate itself, Intech should focus on its competitive
advantage, area of excellence, and unique selling proposition. The ideal customer
demographic for Cryo can be categorized into three groups: high/medium income people
from hot weather countries aged 18-45, medium/low-income people from tropical weather
countries aged 18-30, and high/medium income people from cold weather countries aged
18-45. To allocate resources, Intech should focus on the high/medium income people from
hot weather countries, who are mostly in the Middle East, and the medium/low-income
people from tropical weather countries who are mostly from Asia and Africa. Social media
and television platforms can be effective in reaching this audience, as well as television
may be enticing to older audiences. The pricing strategy should be based on the two
focused markets. High/medium income people from hot weather countries with the age of
18-45 will benefit from a price skimming technique, charging the market's maximum
acceptable price at first and gradually decreasing it over time. This strategy is effective
when targeting areas with little competition or developing a new product to compete with
rivals. And the price for other market can be chosen based on competition price. In
conclusion, Intech's Cryo smartwatch offers a unique selling proposition that sets it apart
from its competitors. By focusing on the right demographics, focusing on the right pricing
strategy, and leveraging its unique selling proposition, Intech can capitalize on the growing
market and increase its market penetration.

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1. Introduction:

Many facets of human existence have been altered by the development of digital and
mobile technology. Access to data and information has become low-cost, controllable, and
pleasant, and Internet connection has become simple and more crucial for many. Wearable
technologies have emerged because of these technical advancements, paving the way for
the next phase of the digital revolution, in which technology is not only functional but also
donned by its users (Sultan, 2015). In 2022, the worldwide market for wearable technology
was valued at USD 61.30 billion and is projected to develop at a compound annual growth
rate (CAGR) of 14.6% from 2023 to 2030. In 2022, the consumer electronics application
category had the highest revenue share at 48.95 percent (Wearable Technology Market
Size, Share & Trends Analysis Report 2023 - 2030, n.d.). Wearable technology like fitness
bands and AR/VR headsets has increased this segment's share.

If we break down the market by several perspectives, we get the following:

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This implies that wearable devices, particularly wristwear and eyeglasses, are gaining
popularity among consumers as the demand for consumer electronics, particularly in the
fitness sector and the healthcare industry, is growing rapidly. Due to the lack of an effective
and long-lasting battery as well as the size restrictions, the technology faces certain
obstacles (Wearable Technology Market Revenue Trends and Growth Drivers |
MarketsandMarkets, n.d.).

Due to rising interest in IoT devices and widespread usage of smartphones, the market for
wearable tech is predicted to expand substantially over the next several years. Future
technological advancement will grow beyond fitness and health to more advanced
applications such as military and medical aid, etc. Demand for Internet-enabled gadgets is
on the rise in both emerging and developed countries. In recent years, the market has grown
thanks to people's increased familiarity with technology; this trend is predicted to continue
next year as well.

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2. Report Objective

This report is intended to assist Intech, a Malaysian startup technology business, with their
product launch choice. Intech has created two new wearables in an effort to address two
key issues, namely,
3. High body temperature will be remedied by CRYO, a wristwatch capable of
reducing the wearer's body temperature by 2 ° C.
4. Visibility in darkness which will be addressed by VISIO, an infrared enabled
eyeglass.

A set of market survey data is available for analysis which give information about unit
sold, product and competitor product price, Different advertisements cost, location etc.
 A linear and multiple regression method will be applied to determine the
significant relationship between the dependent variable which is Unit sold and
other independent variables.
 Different plotting method will be implied to assist on decision making by
observing the variable’s correlation and distribution.
 The regression equation will be chosen based on significant model to forecast
maximum output.
 Based on the relationship strength and variable type a launching decision will be
achieved.
After the decision making is done, a set of recommendations will be provided at the end of
the report which will focus on
 Identifying the competitive advantage
 Identifying the right market and customer
 Identifying the most effective advertising media
 Identifying the right marketing strategy
 Identifying the right price strategy for right market.

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3. Data Analysis

3.1. Cryo

Table 1: Summary

Variables Min 1st Qu Median Mean 3rd Qu Max

Units Sold 1.000 5.000 10.00 10.08 15.00 20.00
Price 129.0 162.5 191.0 195.1 230.0 259.0
AD-SM 1.000 3.000 5.000 5.374 8.000 10.00
AD-TV 1.000 4.000 8.000 7.853 11.25 15.00
AD-PR 1.000 4.000 8.000 8.009 12.00 15.00
CP-price 159.0 186.0 212.0 209.8 234.0 259.0
Location 0.000 0.000 0.000 0.4765 1.000 1.000

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Table 2: Linear Regression Models

Model(Y~X) Intercept X Coeff Formula P value R2 Adj R2

Units Sold~price 7.318192 0.014171 Y=7.318192 +0.014171X 0.0829 0.008871 0.005938
Units Sold~AD-SM 10.8828 -0.1490 Y=10.8828-0.1490X 0.1529 0.006036 0.003096
Units Sold~AD-TV 10.31915 -0.03015 Y=10.31915-0.03015X 0.676 0.0005175 -0.00244
Units Sold~AD-PR 10.35036 -0.03346 Y=10.35036-0.03346X 0.6334 0.0006736 -0.002283
Units Sold~CP-price 4.74898 0.02542 Y=4.74898+0.02542X 0.0212 * 0.01561 0.0127

Table 3: Multiple Regression Models

Model (Y~X1+X2+…+Xn) Formula P value R2 Adj R2

Units Sold~price+CP-Price Y=2.429500+0.013062X1+0.024331X2 0.01941 0.02312 0.01733
Units Sold~AD-SM+AD-TV+AD-PR Y=11.411-0.14848X1-0.02632X2-0.04052X3 0.4826 0.007284 -0.001579
Units Sold~Price-+AD-SM+CP-Price Y=3.175050+0.01439X1-0.16044X2+0.02365X3 0.0165 0.03004 0.02138

Based on the table “Unit Sold” initially shows a strong relationship with CP price which is
getting stronger with the addition of AD-SM and Price. The smaller P value and bigger R2
value is evident for that. We can see from below plot Also where we can see the linearity
hold quite strongly between fitted value with residuals with a very little outlier.

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 3.2. Visio:

Table 4: Summary

Variables Min 1st Qu Median Mean 3rd Qu Max

Units Sold 1.000 5.000 10.00 10.08 15.00 20.00
Price 259.0 324.0 386.5 389.2 453.5 518.0
AD-SM 1.000 3.000 5.000 5.524 8.000 10.00
AD-TV 1.000 6.000 11.00 10.86 16.00 20.00
AD-PR 1.000 5.000 11.00 10.51 15.00 20.00
CP-price 259.0 286.8 311.0 310.7 334.2 259.0
Location 0.000 0.000 0.500 0.500 1.000 1.000

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 Table 5: Linear Regression Models

Model(Y~X) Intercept X Coeff Formula P value R2 Adj R2

Units Sold~price 13.572174 -0.008967 Y=13.572174 -0.008967X 0.03365 0.01328 0.01036
Units Sold~AD-SM 11.3047 -0.2213 Y=11.3047-0.2213X 0.04923 0.01139 0.04923
Units Sold~AD-TV 10.52760 -0.04100 Y=10.52760-0.04100X 0.4471 0.001711 -0.001242
Units Sold~AD-PR 9.60348 0.04558 Y=9.60348+0.04558X 0.4028 0.002072 -0.0008808
Units Sold~CP-price 8.114353 0.006333 Y=8.114353+0.006333 0.5687 0.0009619 -0.001994

Table 6: Multiple Regression Models

Model (Y~X1+X2+…+Xn) Formula P value R2 Adj R2

Units Sold~price+CP-Price Y=12.18071-0.008823X1+0.004296X2 0.09749 0.01372 0.007868
Units Sold~AD-SM+AD-TV+AD-PR Y=11.20823-0.22243X1-0.04134X2+0.05251X3 0.1525 0.01556 0.006774
Units Sold~AD-SM+Price Y=15.1030-0.2373X1-0.0095X2 0.01114 0.02634 0.02056

Based on the table “Unit Sold” initially shows a strong relationship with Price and AD_SM
individually which is getting stronger when we modelled them together. The smaller P
value and bigger R2 value is evident for that. We can see from below plot Also where we
can see the linearity hold quite strongly between fitted value with residuals with a very
little outlier.

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If we use the Mean values of the survey data, then the selling trend will be as below based
on best model.

Cryo Y= 3.175050+(0.01439*195.1) -(0.16044*5) +(0.02365*212)=10.194 unit

Visio Y=15.1030-(0.2373*5.524) -(0.0095*389.2)=10.09 unit

4. Conclusion

If we summarize Cryo market survey analysis below are the findings

1. In linear modeling the strongest relationship of Unit sold is with CP-Price based on
the bigger R2 and that relationship is statistically significant based on Smaller P
value. 1 dollar of CP-price increase will add 0.02542 unit of additional sale Which
means approximately a 50$ increase of CP-price will sell 01 additional unit.
2. When we add Price and AD-SM with Cp price the relationship is getting stronger
with bigger Adj R2 and smaller P value. But the model says that sales will increase
with the increase of CP-Price and Product price and decrease with the increase of
social media advertisement. An approximate increase of 50$ in CP price or increase
of 100$ in price or decrease of 10k$ in AD-SM will sell 1 additional unit.
3. No variable has any sort of correlation with Unit sold which is visible in
scatterplot.
4. Prices are concentrated at 230-240 range, CP-Prices are at 210-220 AD-SM are at
0-2k which can see from Histograms.

If we summarize Visio market survey analysis below are the findings

i. In linear modeling the strongest relationship of Unit sold is with Price based on the
bigger R2 and that relationship is statistically significant based on Smaller P value.
1 dollar of price decrease will add 0.008967 unit of additional sale Which means
approximately a 125$ decrease of price will sell 01 additional unit.

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 ii. When we add AD-SM with price the relationship is getting stronger with bigger Adj
R2 and smaller P value and the model says that sales will increase with the decrease
Product price and social media expenditure. An approximate decrease of 111$ in
price or decrease of 4.3k$ in AD-SM will sell 1 additional unit.
iii. No variable has any sort of correlation with Unit sold which is visible in
scatterplot.
iv. Prices are concentrated at 330-360 and 430-440 range AD-SM are at 0-2k which
can see from Histograms.

Based on the above modelling the best models are as below

1. Cryo_Units Sold~Price+AD-SM+CP-Price

Y=3.175050+0.01439X1-0.16044X2+0.02365X3

2. Visio_Units Sold~AD-SM+Price

Y=15.1030-0.2373X1-0.0095X2

So, the most feasible product to launch first will be Cryo for the reasons below.

1. Cryo has slightly better Adj R2 Value

2. The positive relationship with price predicts the inelasticity in Demand over price
change.
3. Strong connections with CP-Pricing will aid in benchmarking the initial price for
maximum sales.
4. The negative association with AD-SM indicates that there is potential room for
improvement in the marketing plan. The advertising platform or content may need
improvement.

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5. Recommendation

5.1. Marketing Strategy

As Cryo has been selected for initial release, a thorough marketing plan must be established
to ensure maximum sales. Cryo has an extremely innovative and useful feature of body
temp reduction which makes it different from conventional smartwatches. As not many
competitors on the market who can provides a watch with this feature so, Cryo put itself in
to Oligopoly market and the Marketing strategy of Cryo will be divided into 4 steps as
below.

5.1.1 Specialization
The present market is saturated with smartwatches that provide a multitude of
capabilities. They may be divided into two primary categories, as shown below:
a. Data collection, measurement, and display instruments (like showing time,
location, measuring heart rate etc.)
b. A device that produces a physical output depending on data input (like device
with alarm, calling features etc.)

The temperature lowering function places Cryo in the second category, but because
very few companies can combine this technology into a watch, Cryo will join a very
niche market. Therefore, Intech should concentrate on leveraging this feature to target
the B2C market, where the majority of customers would reside in hot and tropical
countries and spend considerable time outside. On the other hand, there is a B2B
potential in the health and wellness industry that targets hospitals where individuals are
hospitalized for fever and gyms where individuals engage in fat-burning activity.

5.1.2 Differentiation
Creating differentiation is a crucial component of competitive strategy. Therefore, in
order to establish this strategy, Intech needs to outline a few policies.
a. Competitive Advantage: Unique product features are Cryo's primary
competitive edge over its rivals. By offering a functionality to reduce body

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 temperature, Cryo distinguishes itself from the ordinary smartwatch industry
and enters the specialist wellness product market. If it is able to penetrate the
correct market, it will experience a tremendous return due to its pioneering
position.
b. Area of Excellence: From a basic wristwatch to a wellness companion, Cryo
is the product of continuous development. But they must continue to
innovate in order to remain competitive. Therefore, constant invention of
robust features would be Cryo's specialty.
c. Unique Selling Proposition: Cryo's greatest USP will be its ability to solve a
significant wellness issue with a wristwatch. This product will not only be in
high demand among heat-exposed individuals, but also in the health and
fitness market.

5.1.3 Segmentation:
In this section of the strategy, Intech must determine who the perfect Cryo customer
is. So that the pricing strategy and allocation of resources may be adjusted
accordingly. To determine the ideal customer, we must go into the details listed
below.

5.1.3.1 Demographics of the customer:

The ideal market for Cryo can be segmented by the following types.
I. Hot weather Countries-Middle East
II. Tropical Weather Countries-Asia/Africa
III. Cold weather Countries-USA/Europe/Russia

And the ideal customers are grouped as below.

By age
 18-30 (student and young professionals)
 30-45(Mid-level executives)
 Above 45(High level executives/Retired)

By income

 High income (above USD 5k/month)

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  Medium income (USD 1k-5k/month)
 Low income (below USD 1k/Month)

5.1.3.2 Psychographics of the customer:

The following are the reasons why the target groups use smart devices:
 Use gadgets as part of lifestyle.
 Use gadgets as part of experiment.
The 1st group are the biggest appreciator of technology and always keep themselves
updated with the new features. A great innovative feature will draw this crowd
easily.
The 2nd group are not big tech users but can be driven by catchy advertisement or
positive feedbacks.

So, the Ideal customers can be classified and ranked as below.

1. High/Medium income people from Hot weather country with the age of
18-45
2. Medium/Low-income people from Tropical weather country with the
age of 18-30
3. High /Medium income people from cold weather country with the age of
18-45

The expected volume of customers will be highest in the 2nd category and the
biggest revenue expectation is from the 1st category.

5.1.4 Concentration
In this segment, Intech should determine the portion of the client segment on which
they should concentrate and spend resources. Based on the above segmentation, the
emphasis should be as follows:

High/Medium income people from Hot weather country with the age of 18-45

This is mostly situated in nations of the Middle East, where we may find high
spending groups. Social media and print media are the most effective methods for
reaching this audience. Influencer marketing with celebrities on social media will
be very effective. The negative relation between AD-SM and Unit Sold may be the
outcome of a flawed social media marketing plan in this segment.

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 Medium/Low-income people from Tropical weather country with the age of 18-30

This is mostly concentrated in Asia and Africa, where we may discover a

population with moderate to lower purchasing habits. However, owing to the high
population density, the number of customers will be enormous. Moreover, residents
in this area will be subjected to high levels of heat at work. Social media and
television will be the most effective means of reaching this audience. Common
platforms such as Facebook, Instagram, and TikTok will substantially increase
demand. Television may be enticing to older audiences.

5.2 Pricing Strategy:

The pricing strategy should be different based on the 2 focused markets we have discussed
above.

High/Medium income people from Hot weather country with the age of 18-45

Members of this market segment have a propensity for extravagant spending and
ostentation. A low-cost product may not appeal to them in terms of buying satisfaction. So
the best pricing strategy for this group will be the Price skimming technic. Price skimming
is charging the market's maximum acceptable price for a product at first, and then gradually
decreasing it over time. The rationale behind the skimming price strategy is to "skim" off
the top market segment to whom it appeals at the time when the product is at its peak
freshness, hence maximizing the profit margins early on (Price Skimming Explained:
Definition & Examples, n.d.). The logic behind Cryo to be price skimmed in this market are.

 Due to its practical feature, demand is impending.

 There is no significant competition that may undercut their prices.
 It utilizes high prices to indicate the superior quality of its new product.

Medium/Low-income people from Tropical weather country with the age of 18-30

This market segment consists of moderate to low spenders. Therefore, when consumers
purchase a product, they examine the pricing of similar products on the market to get a
better offer at a lower price. Based on the data analysis we can see the Cryo unit sold has a
positive and strong relationship with CP-Price. Therefore, the optimal pricing approach for
this market will depend on the competition. Competition-based pricing refers to the

19
practice of basing the prices of products and services on what rival’s charge (What Is
Competition-based Pricing Strategy? | ProfitWell, n.d.). This is very successful when a
company is targeting areas with little competition or developing a new product to fight with
certain rivals. As a startup mindset Cryo can be priced with lower or matched price with
competitor. That will help to get people’s attention as well as better market penetration.
The volume of sales will compensate for the profit difference from other markets.

6. References:

Price Skimming Explained: Definition & Examples. (n.d.).

https://www.profitwell.com/recur/all/price-skimming

Sultan, N. (2015). Reflective thoughts on the potential and challenges of wearable

technology for healthcare provision and medical education. International Journal of

Information Management, 35(5), 521–526.

https://doi.org/10.1016/j.ijinfomgt.2015.04.010

Wearable Technology Market Revenue Trends and Growth Drivers | MarketsandMarkets.

(n.d.). MarketsandMarkets.

https://www.marketsandmarkets.com/Market-Reports/wearable-electronics-market-

983.html#:~:text=The%20wearable%20technology%20market%20size,a

%20highest%20CAGR%20of%2039.12%25.

Wearable Technology Market Size, Share & Trends Analysis Report By Product (Head &

Eyewear, Wristwear), By Application (Consumer Electronics, Healthcare), By

Region (Asia Pacific, Europe), And Segment Forecasts, 2023 - 2030. (n.d.).

https://www.grandviewresearch.com/industry-analysis/wearable-technology-market

What is Competition-based Pricing Strategy? | ProfitWell. (n.d.).

https://www.profitwell.com/recur/all/competitor-based-pricing

7. Word Count:
2620

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