Market Assessment
Exercise
RATIONALE
One of the most common applications of
business geographics tools is market analysis. The visual presentation of
consumer-related data allows managers to identify attractive markets quickly and
communicate the substance of their analyses effectively. This assignment
includes exercises in global market screening and segmentation.
Better Books Inc.
Better Books Incorporated is a direct
marketer of specialty books in the United States. The firm uses database
marketing techniques to make specialized offerings to target customers by mail,
accepting orders via toll free phone lines, mail or fax. By focusing on
mid to upper income households with above average levels of education, the firm
is able to realize higher prices and margins for its specialty
books.
Faced with increased competition from both
traditional retail and Internet firms, Better Books is seeking to maintain its
profit growth through; 1) selective expansion into markets outside the United
States, 2) increasing its customer base in the United States, and 3)
expanding into traditional book retailing from its current base of two outlets
in the San Francisco area. You are the business geographics consultant retained by the firm to support this
effort. In this assignment, you will perform a global market screening and
country clustering study for Better Books.
Exercise 1: Global Market Screening
(25 points)
Better Books management desires to
replicate its domestic strategy in the first international markets it enters and
has charged you with identifying appropriate markets. You have acquired
data from ESRI, Newsweek and Hofstede's Consequences of Culture for this
purpose. These data are compressed into file GlobalData.exe,
which you should download and extract. Simply double click on the file name
after you have downloaded it.) You will use it to identify countries with above average levels
of personal income, newspaper circulation, education and general social
development. You will then display some of this information in a map and
chart with the View, Chart and Layout features.
- Load ArcView, select View. Add a theme to the
view using the GlobalData.shp file. Produce thematic maps with various
attribute fields to familiarize yourself with the variables available.
View the attribute table of the dataset and examine the data. Note
that -99 is used throughout the dataset for missing values. You must
correct for these fields in any calculations you perform on the dataset.
Use ESRI's
Newsweek Education Program site to help you identify the variable names
for each measure.
- Using this file, create separate thematic maps for
Per Capita Income, Human Development Index and Years in School. For each
theme, you should experiment with different classification schemes (type of
classification and number of classes) as you must explain the selected
classification scheme for the maps you include in your report. You
must also know the differences in the classification schemes for exam
purposes. Create a
fourth theme
displaying a pie chart depicting age distribution by country. Create a
fifth theme displaying the Urbanization and Literacy rates of each country
in a bar chart. Be sure to adjust the properties of each theme to
exclude missing values.
- Select the Human Development Index theme and switch
to its attribute table. Select the Name field and create a summary
table (statnodp.dbf) which calculates average values for Per Capita Income, Years in School and Newspaper
Circulation (per 1000 population). The result will be a data table
with one entry per country. Using this table, calculate average values
for each of these three variables. Hint: be sure to exclude missing
values from these calculations!
- Use the Query Builder to construct a query which
selects from the table those countries which are above average on ALL THREE of these measures. This is the set of potential target countries for
Better Books. Be sure to note the identity of these countries for your
report.
- Using the statnodp.dbf table and the Chart function,
design a chart depicting
a variable of your choice as a bar chart which displays the values of that
variable for the highest seven countries. Be sure to add an
appropriate title (including publication date for data), axes labels and
documentation for the underlying data.
- Using the Layouts feature, design a layout which
includes one of the maps, its legend and the chart. Insert an appropriate
title (including publication date for data), document the source of the data
and print it.
- Save the project you have developed with an
appropriate name.
- Following course stylistic
expectations, write a 2-3 page report to Better Books management
in which you;
- describe the screening process you have performed,
- identify the countries selected in that process, and
- explain the importance of the information displayed in your map and
chart.
Exercise 2: Global
Market Clustering (25 points)
Better Books management has accepted your
recommendation to target the countries identified in the previous exercise with
above aberabe income, education and newspaper circulation levels. Further,
management wishes to
customize its offerings to the cultural values of these target markets. For example,
in its line of business books, it wishes to make a distinct offers to managers
in countries which value aggressive management and risk taking taking on the one hand, and
those which value individualism but avoid risk taking on the
other. You will use Hofstede's cultural indices
to identify clusters of such countries from among the markets you have already
selected.
- Load ArcView and the project file from the previous
assignment.
- You have collected scores for Hofstede's indices in
a Microsoft Excel file Hofstede.xls, which was one of the files you
extracted from the GlobalData.exe
file in the
previous exercise.
- You will now create a table within ArcView using the
SQL Connect function to the Excel file. Save the project you have
developed with an appropriate name. From the Project window, select Project,
SQL Connect. Click on the Connect button and direct ArcView to the
Excel file. You will see the range name Data appear in the
Tables box and several variable names in the Columns box. To include
variables in the query, click the cursor in the Select box, then double
click each variable name. Click the cursor in the From box and double
click the title Data in the Tables box. Finally, replace the title Table1
in the Output Table box with the title Hofstede. Finally, click the
Query button to perform the query and create the table Hofstede
within your project.
- Using the shared field Name (of each country)
join the Hofstede table to the table you have been using. Of
the 40 countries in Hofstede's study, 38 are in this dataset. Two
additional ones are not represented in the Newsweek data. Thus, 36
countries will have values for these indices attached to them, but these
include most of the countries you have selected as target markets.
- Using the appropriate values from Hofstede's
cultural indices and the Query Builder, select those countries with low
Uncertainty Avoidance scores AND low Masculinity scores. Add a new
text field, Segment, to the table, and enter the value "Feminine
Entrepreneurs" for
each of these countries.
- Using the appropriate values from Hofstede's
cultural indices and the Query Builder, select those countries with high
Power Distance scores AND low Individualism scores. Enter the value
"Team Players" for each of these countries in the Segment
field of the table.
- Enter the value "General" in the Segment
field for all remaining countries. These are countries which don't
fall into either of the specific segments you have identified.
- Create a new View. Add a theme which displays
the three segments you have identified. Create a layout which includes
this map and its legend. Export this image as a JPEG file to include
in your report.
- Using the Summary function, calculate the average
values for Per Capita Income, Years in School and Newspaper
Circulation (per 1000 population) for these three segments. Create
charts illustrating
- Following course stylistic
expectations, write a 2-3 page report to Better Books management
in which you;
- describe the selection process you have performed,
- explain the characteristics of the resulting segments and their match
with Better Books planned offerings (i.e. what types of management books
would you target to each segment?),
- integrate the map and two charts into the report (Be sure to include
appropriate titles, headings, dates and source information in all your
maps and charts) , and
- identify the countries included in each segment.
The two parts of this
exercise are due together on the date specified in the Course Schedule.
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