TABLE OF CONTENTS

1.0 EXECUTIVE SUMMARY .....................................................................................2

2.0 INTRODUCTION
..............................................................................4
3.0 EXPLORATORY ANALYSIS .....................................................................................5
3.1 DESCRIPTIVE STATISTICS ..................................................................................5
3.2 INTERPRETATION OF THE GRAPHS ..................................................................6
4.0 ANALYSIS OF THE REGRESSION OUTPUT .......................................................10
5.0 ANALYZING THE EFFECT OF A $1 REDUCTION IN AVERAGE PRICE .............
(AVEP) ON SALES VOLUME ........................................................................................17
6.0 ANALYZING THE EFFECT OF A $100,000 MEDIA CAMPAIGN SPLIT ...............
EVENLY OVER 10 WEEKS ...........................................................................................21
7.0 COMPARING PRICE PROMOTIONS AND ADVERTISING ...............................24
8.0 CONCLUSION
..........................................................................27
9.0 APPENDIX
A LINE GRAPHS
25
B SCATTER PLOTS
28
C DESCRIPTIVE STATISTICS
31
D 6 VARIABLE DATA
36
E 6 VARIABLE REGRESSION
39
F 6 VARIABLE HISTOGRAM
43
G 6 VARIABLES JARQUE BERA
44
H HETEROSCEDASTICITY
49
I 6 VARIABLES WHITE TEST REGRESSION
50
J 6 VARIABLES DURBIN WATSON TEST
55
K 3 VARIABLE DATA
58
L 3 VARIABLE REGRESSION
61
M 3 VARIABLE HISTOGRAM
65
N 3 VARIABLES JARQUE BERA
66
0 3 VARIABLES WHITE TEST
69
P 3 VARIABLES DURBIN WATSON TEST
74
Q ANALYZING PRICE PROMOTIONS
77
R ANALYZING MEDIA SPENDING
79

1.0

EXECUTIVE SUMMARY

DrinkMe, manufactured by GoodsCo, has to make a decision with regards to which

marketing activity to adopt. The report looks into the affect of Temporary Price
Reduction and Media Campaign over sales. Regression analysis has been done just to
find out that DrinkMe sales is not affected by the competitors price or their
advertisements and the main factors contributing to the sales of DrinkMe are DrinkMes
price, advertisement and the average temperature of Queensland. From the regression
output it has been noted that if average price increase by $1 volume would fall by 3.77
tonnes. For advertisements, an increase in advertisements would result in an increase in
sales volume by 0.063 tonnes and lastly an increase in temperature in Queensland would
result in a drop in sales by 0.61 tonnes.
The Jarque-Bera, White Test and Durbin-Watson test has been conducted to test for
normality, heteroscedasticity and serial correlation respectively. With a 95% confidence
level, all the tests have passed which concludes that the residuals are normally
distributed; there is no heteroscedasticity and no serial correlation.
With only three independent variables and when the assumptions of normality,
heteroscedasticity and serial correlation has been checked, the affect of price reduction on
sales has been worked out by holding all other variable constant. It came out that the
price reduction of 2.67 is the optimal point where the marginal difference is the
maximum. The marketing director is not recommended to reduce the price by 2.67 as it
would result in higher sales but an overall loss in the marketing activity. The marketing
director, depending on the outcome that is needed, needs to make a tradeoff decision
between high sales and low profit or vice versa. The media campaign on the other hand
provides the maximum marginal difference in the 10th week. The campaign is designed
only for 10 weeks but to make allowance for the residual effects of Adstock the analysis
is done over 20 weeks. The profit from this 10 week media campaign results to 13.84%.
It is recommended that the marketing director should use a combination of both price
reduction and media campaign. Both these would complement each other and the end
result would be more profitable than using only price reduction or media campaign.
2

The scope of the research is limited as outside the model competitors strategy does affect
DrinkMes sales and omitting them from the analysis would result in a different
conclusion. Whether the data collected represents the whole population is another
question that needs to be taken into account. Besides that, the research would assist the
marketing director in making the ultimate decisions regarding the selection between price
reductions and advertising promotions.

2.0 INTRODUCTION
This research is conducted to gain an insight into the effectiveness of a Temporary Price
Reduction (TPRs) activity and an Advertising Campaign (media spend) for the DrinkMe
brand in Queensland. The research will be able to prove whether a TPR or an increase in
media spent would be more effective.
Objectives

To measure the effects of a TPR of $1 on sales volume and sales value

To measure the effects of a media campaign worth $100,000 spread evenly over
10 weeks on DrinkMes sales volume and sales value

Data have been extracted from Electronic Point of Sale (EPOS) database dated 1st
September 2002 to 26th June 2005. The data includes DrinkMe and its competitors
weekly sales volume, weekly sales value, weekly distribution, weekly media spent and
the average temperature in Queensland.
For the purpose of the research, the data that has been collected is time series data as it
has been collected over a period of time. The measurement of the variables falls into the
category of ratio as the variables are conceptually quantitative measurement. The
numbers of units sold which in this case, volume, the dollar value of sales which in this
case value, are all conceptually quantified. The methodology that has been used is linear
regression. Multiple regressions have been used to find out the relationship between the
independent variables with the dependent variable which is volume in this case. The
affect of changes in 1 unit of independent variable on the dependent variable can be
determined from the regression summary output and in this case it is very important to
know this relationship as the ultimate objective is to find the effects of sales volume and
value due to the promotion of a $1 reduction in the price and the media campaign.
Moreover, as non normality of residuals, heteroscedasticity and serial correlation can
affect the explanation of the dependent variable accurately, Jarque-Bera test, White Test
and Durbin-Watson Tests are also done.

3.0 EXPLORATORY ANALYSIS

3.1

DESCRIPTIVE STATISTICS

A descriptive statistics was conducted and the following data was obtained. DrinkMes
sales volume shows an average of 14.35 tonnes while its competitors sales volume
shows an average of 0.36 tonnes..
DrinkMes sales value shows an average or mean of 131.11 ($000) while its competitors
sales value shows a mean of 3.38 ($000) DrinkMes sales value shows a standard error
2.2893 and its competitors sales value has a standard error of 0.0817.
DrinkMes media spending has a mean of 2.2043 ($000) while its competitors media
spending has a mean of 0.1421 ($000). DrinkMes media spending has a standard error
of 0.3162 and its competitors media spending has a standard error of 0.0695.
DrinkMes average price has a mean of 9.1644 ($000) while its competitors average
price has mean of 9.3959 ($000). DrinkMes average price has a standard error of 0.0274
and its competitors average price has a mean of 0.0394.
DrinkMes Adstock has a mean of 4.3106 ($000) while its competitors Adstock has a
mean of 0.2841 ($000). DrinkMes Adstock has a standard error of 0.5173 and its
competitors Adstock has a standard error of 0.0958.
The average temperature in Queensland has a mean of 24.4179 degrees Celsius and has a
standard error of 0.3272. The maximum average temperature in Queensland was 30.4973
degrees Celsius while the minimum was 14.8676 degrees Celsius.
These averages will later be used in testing the effects of price reductions and media
spending.

3.2

INTERPRETATION OF THE GRAPHS

Graph 1: COMP Sales Volume vs DRINKME Sales Volume

By looking at Graph 1 it is found that DrinkMes sales are much higher compared to
DrinkMes competitors sales, in terms of volume. It is assumed that DrinkMe sales are
affected by price, temperature, media, competitors price and competitors media spent.

Graph 2:
DRINKME Volume VS Average Temperature
Based on Graph 2, the temperature has a negative effect on sales, thus when temperature
increases, sales drop and vice versa. This relationship is also explained by the scatter plot
which is in Graph 3. The scatter plot shows that Drink Me volume has a negative
relationship with temperature.

Graph 3: DRINKME Sales Volume vs Queensland Average Temperature.

Graph 4: DRINKME Volume vs DRINKME Advertising

On the other hand, the effect of media expenditure has a positive effect on sales. Every
time the advertising has been done, there has been a delayed effect on the volume
Moreover, the effect of the media does help to increase sales and it is assumed that these
effects will have a 50% decay rate. The positive relationship is also clear in the scatter
plot in Graph 5.

Graph 5: DRINKME Volume vs DRINKME Advertising

Graph 6: DRINKME Volume vs DRINKME Average Price

Price was supposed to be one of the key factors in determining sales, as reduction in price
would definitely increase sale and vice versa. Surprisingly from the graph in Graph 6, it
can be noted that sales keep following a zigzag pattern even when price remains almost
constant. This might explain that price has little effect on sales, rather advertising is one
of the important factors in determining sales. Same relationship has been found with
competitors pricing. The graph has been included in the appendix. Other graphs which
plays less important role in determining sales such as distribution are included in
Appendix A and B.

4.0 ANALYSIS OF THE REGRESSION OUTPUT

The weekly distribution for DrinkMe was not used in the regression because it has a non
linear relationship with DrinkMes sales volume. A constant data will not have any effect
on the regression model (if X is constant, Y does not change) or in logical terms, it does
not have significant effect on increasing or decreasing sales. This has been explained
from the scatter plot in Graph 7.

Graph 7: DRINKME Distribution vs DRINKME Volume

10

Using the assumption, a regression model has been made to test the variables and to
obtain a linear regression line.
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations

Intercept
DRINKME AVEP
ADVERTISING
COMP AVEP
COMP_QLD_DIST
COMP
ADVERTISING
AVETEMP_QLD

0.917327265
0.84148931
0.834744175
1.307455676
148

Coefficients
61.96243134
-3.866274167
0.075013926
-0.054796191
0.069203934

Standard
Error
4.621776157
0.330496193
0.021237149
0.238855478
0.085094437

t Stat
13.4066275
-11.69839245
3.532203206
-0.229411492
0.813260374

P-value
6.11421E-27
1.61554E-22
0.000557438
0.81888155
0.417439939

0.140780109
-0.580864368

0.103847518
0.035845385

1.355642497
-16.2047182

0.17738033
5.23847E-34

Table 1: Regression of all independent variables

From the regression output shown above it shows the R 2 of this model is 0.84148931
indicating that the postulated regression model explains 84.15% of the total variation of
the sample observations of the dependent variable. However, the competitors average
price, distribution and advertising have been removed as they do not satisfy the t-test rule
of thumb of a critical value of |2| proving that they are not significant variables to be
included in the model. The p-value confirms this as the p-values of the competitors
average price, distribution and advertising exceed the critical value of 0.05.
Using the residuals generated by the regression, certain tests have been carried out to see
whether the assumption of normality, homoscedasticity, and non-autocorrelation are met.
Firstly a histogram was created to test normality as shown in Graph 8.

11

Graph 8: Histogram
Although there are a few outliers in the histogram data, these outliers are usually omitted,
thus making the histogram normally distributed. Using the Jarque-Bera test to double
check on normality, the answer backs up the histogram as it is more than 0.05 which
means we cannot reject the null hypothesis, thus making it normally distributed.
In order to test for Heteroscedasticity and Serial Correlation, a graph was constructed
from the residuals in the regression.

12

Graph 9: Heteroscedasticity
From the Graph 9, homoscedasticity can be seen instead of heteroscedasticity or a serial
correlation. Thus, two further tests have been conducted to test for heteroscedasticity and
serial correlation. For testing heteroscedasticity, a white test had been used, and the result
of the test too proved that there is no heteroscedasticity. For serial correlation on the other
hand, Durbin-Watson test had been used, and the result shows that there are no serial
correlation.
After deleting the 3 variables, only 3 variables are left. Redoing the regression with the
remaining variables (temperature, DrinkMe price and DrinkMe ad stock), the adjusted R 2
is 0.838633657 as shown in table 2.
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations

Intercept
DRINKME AVEP
ADVERTISING
AVETEMP_QLD

0.915769435
0.838633658
0.835271859
1.305366564
148

Coefficients
63.46456658
-3.775534315
0.063328017
-0.605418237

Standard
Error
3.031207128
0.323850659
0.019739416
0.03121047

t Stat
20.93706035
-11.65825731
3.208201203
-19.39792144

P-value
1.55237E-45
1.55599E-22
0.001646425
5.30031E-42

Table 2: Regression of final variables

13

This indicates that the postulated regression model explains 83.86% of the total variation
of the sample observations of the dependent variable. This shows that the three variables
that had been removed do not give a big impact to Drink Me sales volume. From the
regression model, price and temperature is negatively correlated, if there is a drop in price
or temperature by 1, the effect of Drink Me sales volume would increase by 0.6 tonnes
from temperature and 3.78 tonnes from price. Advertising on the other hand, has a
positive correlation between Drink Me sales volume and Ad Stock (the effect of media
spent). If there is an increase in ad stock by 1, there would be an increase in Drink Me
sales volume by 0.063 tonnes. Therefore it explains that if introducing the TPR DrinkMe
can increase their sales and by increasing advertising they can also boost their sales. As
explained earlier that by removing the 3 variables, the R square is still strong it can be
said that the competitors media strategy doesnt affect DrinkMes sales volume that
much. Same concept can be applied for other competitors variables.
By removing the 3 data, a histogram has been drawn to see whether the assumptions of
normal distribution still holds. From Graph 10, it can be seen that the residuals are still
normally distributed. A Jarque-Bera test has been done again and this time, the results
also indicates that the normal distribution still prevails. The summery Jarque-Bera test
has been included in the appendix.

14

Graph 10: Histogram of final variables

Lastly for the three variables to see whether there is any heteroscedasticity and serial
correlation a line plot has been done as in Graph 11.

15

Graph 11: Heteroscedasticity of final variables

Once again the plot shows that there is no heteroscedasticity or serial correlation. To
further check for heteroscedasticity a white test has been done which agrees that there is
no heteroscedasticity. For serial correlation, Durbin-Watson test has been which also
concludes that there is no serial correlation.

16

5.0

ANALYZING THE EFFECT OF A $1 REDUCTION IN AVERAGE PRICE

(AVEP) ON SALES VOLUME

Now that the final 3 variables that have a direct impact on Drink Me Sales Volume have
been identified, GoodsCo can look at how these variables effect sales volume. The first
variable under analysis is the average price.

Y = 63.46 (3.78*AVEP)+(0.06*Ad Stock)-(0.61*Ave Temp)

The equation above represents the relationship between the three independent variables
and the dependant variable (sales). A $1 reduction in the average price of Drink Me
would cause an increase of 3.78 tonnes in Drink Mes Sales Volume. However to truly
examine the effects of a price reduction in drink me, the Sales Value of Drink Me has to
be calculated.
PRICE REDUCTION
AVEP
ADSTOCK
AVETEMP
VOLUME
VALUE
MARGINAL
DIFFERENCE

0.00
9.16
4.31
24.25
14.45
132.46

1.00
8.16
4.31
24.25
18.23
148.83
16,371.6
0

Table 3: Effect of $ 1 TPR on Sale Value

Table 3 shows how a $ 1 price reduction causes an increase of $ 16,371.60 in Drink Me
Sales Value.

17

PRICE REDUCTION
AVEP
ADSTOCK
AVETEMP
VOLUME
VALUE
MARGINAL
DIFFERENCE

0.00
9.16
4.31
24.25
14.45
132.46

1.00
8.16
4.31
24.25
18.23
148.83

2.00
7.16
4.31
24.25
22.00
157.65

2.67
6.49
4.31
24.25
24.53
159.34

3.00
6.16
4.31
24.25
25.78
158.92

5.00
4.16
4.31
24.25
33.33
138.81

6.00
3.16
4.31
24.25
37.11
117.42

16.37

25.19

26.46

6.35

(15.04)

16371.60

25192.13

26.88
26877.4
4

26461.59

6347.31

(15036.44)

Table 4: Marginal Difference in Sales Value Resulting from TPR

As depicted in Table 4 the maximum marginal difference in sales value is obtained from a
price reduction of $2.67. The total increase in sales value at this point is $ 26,877.44. This
would mean that reducing Drink Mes average price of $9.16 to $6.49 would increase
sales by $26,877.44.

18

Graph 12: Historic l Drink Me Prices

Unfortunately, such a large reduction may not be reasonable for Drink Me. As shown in
Graph 12 historically Drink Mes lowest price in its TPR activity was around $ 8.00.

Graph 13:Profitability of TPR Promotion

19

By calculating the cost of the TPR activity (Expected Sales Volume * Price Reduction)
GoodsCo can also calculate the profitability of a price reduction.
Profit Margin % = [ Marginal Difference - Cost of TPR Activity ] / Marginal Difference
Graph 13 shows how the profitability of a TPR activity has a negative relationship with
price reduction. As price is reduced the profitability of the activity also reduces. This is
because while there is extra sales value created through TPR there is also additional cost.
Unfortunately the additional cost grows at an increasing rate when compared to the
growth in sales value.
Thus the break even point of a TPR activity is at around a price reduction of $ 0.70. Thus,
a marketing director who wishes to carry a TPR promotion has to be very cautious. The
first question to be answered is the objective of carrying out a TPR promotion. If the
objective is to increase company profitability then the marketing director should have a
price reduction of about $ 0.20. However, if the objective of the TPR activity is to
reposition the company as a price competitive company then the marketing director has
to decide the trade off he or she is willing to make in the repositioning activity. Every
increase in price reduction will bleed the company of profits.

20

6.0

ANALYZING THE EFFECT OF A $100,000 MEDIA CAMPAIGN SPLIT

EVENLY OVER 10 WEEKS

To analyze the effects of a media campaign worth $ 100,000 allowance has to be made to
examine the residual effects on AdStock. A 10 week media campaign would require the
analysis to be made over an additional 10 weeks to account for the residuals effects of
AdStock.

Week
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Media
10
10
10
10
10
10
10
10
10
10
0
0
0
0
0
0
0
0
0
0
100

Adstock
10
15
17.5
18.75
19.38
19.69
19.84
19.92
19.96
19.98
9.99
5.00
2.50
1.25
0.62
0.31
0.16
0.08
0.04
0.02

Avep
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16
9.16

AveTemp
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25
24.25

Sales Vol
14.81
15.13
15.29
15.37
15.41
15.43
15.44
15.44
15.44
15.45
14.81
14.50
14.34
14.26
14.22
14.20
14.19
14.19
14.18
14.18

Vol
Base Case
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18
14.18

MD Vol
0.63
0.95
1.11
1.19
1.23
1.25
1.26
1.26
1.26
1.27
0.63
0.32
0.16
0.08
0.04
0.02
0.01
0.00
0.00
0.00

MD Value
(000)
5.80
8.71
10.16
10.88
11.24
11.43
11.52
11.56
11.58
11.60
5.80
2.90
1.45
0.72
0.36
0.18
0.09
0.05
0.02
0.01
116.06

MD Value
($)
5803.66
8705.49
10156.40
10881.86
11244.59
11425.96
11516.64
11561.98
11584.65
11595.98
5797.99
2899.00
1449.50
724.75
362.37
181.19
90.59
45.30
22.65
11.32
116061.87

Table 5: Effects of A Media Campaign

By calculating the total volume of a base case (absent media spending) the marginal
difference in sales value from a media campaign can be calculated. As the table above
shows, there is a residual effect after the media campaign of 10 weeks is over.

21

Graph 14: Effects of Media Spending

Graph 14 shows the effects of media spending on sales value and Ad Stock. The effects
of the media also diminish after 20 weeks. More importantly, the full effect (highest
marginal difference) is at the 10th week of the media campaign where the marginal
difference is $11,595.98.
Media
Campaign
Cost
Sales Value
Profit
Profit Margin
(%)

Without Media
Campaign

100
2715.20
2615.20

0
2599.14
2599.14

96.31702806

100

Table 6: Profitability of a Media Campaign

Table 6 compares the profitability of the media campaign compared to operations without
a media campaign. If operations without a media campaign is treated without cost then it
enjoys a profit margin of 100%. When media campaign is carried out the profit margins
reduce to 96.32%. This shows that the media campaign actually reduces the ratio of per
dollar profitability by around 3.68%.

22

By taking the total marginal difference in sales value and subtracting the cost of the
media campaign we can calculate the profitability the extra sales generated by the media
campaign. This would be the profitability of each extra dollar earned by the media
campaign.
Profitability % = [ Total Marginal Difference Cost of Campaign ] / Marginal
Difference

= (116061.87- 100000)/ 116061.87

= 13.84%

A media campaign spread evenly over 10 weeks results in a profit of 13.84% after taking
into account the residual effects of Ad stock.

23

7.0 COMPARING PRICE PROMOTIONS AND ADVERTISING

Activity
TPR
Advertising

Marginal
Difference
3895.59
116061.87

Cost of
Activity
3042.11
100000.00

Profit
($)
853.47
16061.87

Profit Margin
(%)
21.91
13.84

Table 7: Comparing Profitability

As shown in table 7 advertising provides a more profitable outcome in total sales value.
An expenditure of $ 100,000 over 10 weeks results in additional sales of up to $
116,061.87. After taking into account the cost of advertising a profit of $16,061.87. This
represents a profit margin of 13.84% for Drink Me.
Price promotion on the other hand gives the marketer the power of discretion. Marketers
can chose the level of profit required or they can choose to bear a loss in effort of
conducting a repositioning activity or for an objective similar to it. A price reduction of
only $ 0.20 results in additional sales of $ 3,895.59. After taking into account the cost of
this price promotion Drink Me makes a profit of $853.47 representing a profit margin of
21.91%. However, a price reduction of $ 2.67 (which is the maximum marginal
difference) creates a loss of 145%.
Determining whether to use one marketing activity or both activity proves difficult.
Advertising creates high sales value while price promotion are more profitable per dollar
spent.
Activity
TPR
Advertising
Total

Marginal
Difference
3895.59
116061.87
119957.46

Cost of
Activity
3042.11
100000.00
103042.11

Profit
853.47
16061.87
16915.34

Profit
Margin
21.91
13.84
14.10112

Table 8: Profitability Of A Combination Of Two Marketing Activities

The above table shows that combining the two marketing activities only makes a slight
increase in profit margins for advertising. A combination of both activities proves to be
more profitable in total value than just a single marketing activity. The marketing strategy
24

should combine a suitable price reduction which is complimented by an aggressive media

campaign that promotes the price reduction conducted. Without the proper
advertisements nobody will know of the price reduction effecting in ineffectiveness.
Also the strategy could be for media campaigns to be carried out when price promotions
are not. A constant application of either one of the marketing activities will guarantee
higher sales for GoodsCo.
However, if a marketing director was forced to chose either one of the marketing
activities based on the information from the analysis conducted Goods Co is advised to
adopt advertising to increase sales. Its low profit margins are just a smoke screen to the
high sales value it creates.
One of the main reason advertising is chosen instead of price promotion is because of its
long term benefits. While price promotions allow for quick short term benefits sooner or
later competitive firms will adopt the same price reductions and Goods Co competitive
advantage through low prices will be lost once again. Advertising on the other hand can
give Goods Co an immortal competitive advantage if the advertising activity is carried
out properly. This means, clear messages to selected target markets. For instance, Coke is
a consumer product similar to Drink Me that has obtained seemingly immortality in the
soft drink industry. It achieved this through successful advertising that positioned itself as
a lifestyle drink. Its taste is not unique because it has been duplicated over the years by
various smaller firms. However, it maintains and grows its market share through
continuous advertising.
In fact advertising can potentially give the marketer the power to increase prices if done
properly. Advertising allows marketers to reposition their products. If repositioning
efforts are done properly consumers will willingly pay more for a product. For instance,
the coffee served at Starbucks is very similar to the coffee served at the usual cafes.
However, due to the correct advertising activities Starbucks has positioned its coffee as a
lifestyle product that consumer are willing to pay for. Starbucks is one of the fastest

25

growing franchises in the world today and it owes its success to the niche position it has
acquired for itself.
These are the reasons why Goods Co should adopt advertising instead of price
promotions. Focus should be on long term returns not short term profitability.

26

8.0

CONCLUSION

In conclusion it has been seen how out of all the variables in the model, only three
variables stand out. Drink Mes average price, their advertising and the average
temperature turned out to be the major factors in determining the sales of DrinkMe.
Therefore it made sense on how to alter the price and the advertising of DrinkMe can
actually result in a boost in their sales.
However like every other model there are also limitations in this model. Firstly even
though the regression output has revealed that competitors activity does not affect
DrinkMes sale but in reality the promotion of the competitors as well as their price place
an important part in determining the sales volume of DrinkMe. Secondly it is also a
matter of question whether the data that has been used actually represents the whole
population. Such as only extracting data from EPOS of Woolworths and Coles
supermarket can only provide half of the picture. People who do not shop in these
markets will be left out. Another limitation could be that for media campaign, sales have
been forecasted for 20 weeks. In 20 weeks, competitors might come up with more
desirable drink in which case it would actually affect the sales volumes of DrinkMe.
Therefore all these should be taken into account before going ahead with TPR and media
campaign.
For future research, it would be advisable if panel data as well as qualitative data can be
collected instead of time series. Qualitative data would give more insight on the behavior
of consumers both before and after the TPR and media campaign. Based on that, further
research can be done on how DrinkMe can have an edge over their competitors.

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