Submitted By: Varun Chaturvedi B2023114
RETAIL ASSIGNMENT
Ans-1. Evaluating promotional effectiveness requires a systematic approach to
measuring both the direct and indirect impacts of marketing activities
Key Performance Indicators (KPIs)
• Sales Lift: The incremental sales generated during the promotional period compared to a
baseline period.
• Redemption Rate: For coupon-based promotions, the percentage of distributed coupons
that were redeemed.
• Return on Investment (ROI): The revenue generated from the promotion divided by the cost
of running it.
• Profit Margin: How the promotion affected overall profit margins.
• Customer Acquisition Cost (CAC): Cost to acquire new customers through the promotion.
Measurement Methodologies
• Pre/Post Analysis: Comparing sales before, during, and after the promotional period.
• Test vs. Control: Using control groups (stores/regions without the promotion) to isolate
promotional effects.
• Regression Analysis: Statistical modeling to account for other variables affecting sales.
• Market Basket Analysis: Examining which products are purchased together during
promotions.
Key Concepts in Promotional Effectiveness
• Cannibalization: When a promotion causes customers to buy the promoted product instead
of another product they would have purchased anyway, resulting in no net gain.
• Halo Effect: When promoting one product leads to increased sales of complementary
products.
• Stockpiling: When customers buy more of a product than they immediately need during a
promotion, which can lead to decreased future sales.
• Price Elasticity: The degree to which demand changes in response to a price change.
Understanding elasticity helps determine optimal promotional pricing.
• Promotional Decay: How quickly the effects of a promotion diminish over time.
• Customer Lifetime Value (CLV): Assessing how promotions affect the long-term value of
customers, not just immediate sales.
• Incremental Margin: The additional profit gained from promotional sales after accounting
for promotional costs.
• Promotional Cadence: The frequency and timing of promotions, which can affect customer
expectations and baseline sales.
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Submitted By: Varun Chaturvedi B2023114
Ans-2 Growth Marketing Experimentation
Product Selected: Smart Fitness Tracker
A. Target Audience
• Demographics: Adults aged 25-45
• Psychographics: Health-conscious individuals who are tech-savvy
• Behavioral: Currently use fitness apps but may not own dedicated fitness hardware
• Geographic: Urban and suburban residents with active lifestyles
• Income Level: Middle to upper-middle income ($60,000+ annually)
B. Hypotheses
• Feature Awareness Hypothesis: Highlighting the sleep analysis feature will increase
conversions among users who prioritize overall wellness rather than just exercise tracking.
• Social Proof Hypothesis: Adding user testimonials focused on achievement milestones will
increase click-through rates significantly compared to product specification-focused ads.
• Pricing Tier Hypothesis: Offering a three-month premium subscription trial (instead of one
month) will increase conversion rates without significantly impacting long-term revenue.
• Onboarding Hypothesis: Simplifying the initial setup process to three steps (instead of the
current seven) will reduce new user churn in the first week.
• Competitive Positioning Hypothesis: Emphasizing battery life superiority (10 days vs.
competitors' 3-5 days) will increase consideration rates among previous fitness tracker
owners.
C. Target Metrics
• Conversion Rate: Percentage of landing page visitors who complete a purchase
• Click-Through Rate (CTR): Percentage of ad viewers who click on the ad.
• Customer Lifetime Value (CLV): Projected revenue from a customer over their lifetime
• Net Promoter Score (NPS): Measure of customer satisfaction and loyalty
• 30-Day Retention Rate: Percentage of new customers still actively using the product after
30 days
D. Message to be Conveyed
Smart Fitness Tracker can transform your fitness journey with real insights. It counts steps,
understands your sleep & workout patterns automatically, and guides your recovery with
personalized recommendations backed by sports science. With industry-leading long battery life,
customer will spend less time charging and more time moving.
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Submitted By: Varun Chaturvedi B2023114
Ans-3.
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