AMB240 Case Analysis

Mugly is a collective of likeminded students dedicated to creating quirky and alternative

drinkware moulded by our individual tastes, for those consumers seeking a more unique and
unorthodox take on a normally mundane product.

AMB240 Marketing Planning and Management

Word Count: 2747/2750 (+/- 10%)

Student: Cooper Luskan n9465812

Tutor: Sandy Sergeant

Tutorial 6 - Wednesday 12:30-2pm

By Cooper Luskan, n9465812

Contents
1. Executive Summary ......................................................................................................................... 3
2. Summary of Marketing Outcomes .................................................................................................. 4
2.1. Marketing Objectives .............................................................................................................. 4
2.2. Sales and Production Outcomes ............................................................................................. 5
2.3. Final Profit and Loss Statement .............................................................................................. 6
2.4. Market Share Calculations ...................................................................................................... 7
3. Evidence for Problems in the Marketing Management of the Campaign ...................................... 8
4. Problem Identification .................................................................................................................. 10
4.1. Problem 1 – High Expenses and their Reduction of Profit .................................................... 11
4.2. Problem 2 – Supply and Demand Inaccuracies ..................................................................... 13
4.3. Problem 3 – Product Quality and its Effect on Sales............................................................. 14
5. Statement and Evaluation of Alternatives .................................................................................... 15
5.1 High Expenses and their Reduction of Profit ........................................................................ 15
5.1.1 Solution 1 - Adjust Pricing Strategy............................................................................... 15
5.1.2 Solution 2 - Planning Bonuses ....................................................................................... 15
5.2 Supply and Demand Inaccuracies ......................................................................................... 16
5.2.1 Solution 1 – Using other methods to accurately forecast demand .............................. 16
5.2.2 Solution 2 – Liaising with suppliers and potential sponsors ......................................... 16
5.3 Product Quality and its Effect on Sales ................................................................................. 17
5.3.1 Solution 1 – Implement Quality Controls...................................................................... 17
5.3.2 Solution 2 – Lower price to lower image of quality ...................................................... 17
5.4 Evaluation of Alternatives ..................................................................................................... 18
5.4.1 High Expenses and their Reduction of Profit ................................................................ 18
5.4.2 Supply and Demand Inaccuracies ................................................................................. 19
5.4.3 Product Quality and its Effect on Sales ......................................................................... 20
6. Recommendations for the Future................................................................................................. 21
6.1 Problem 1 - High Expenses and their Reduction of Profit .................................................... 21
6.2 Problem 2 – Supply and Demand Inaccuracies ..................................................................... 21
6.3 Problem 3 – Product Quality and its Effect on Sales............................................................. 22
7. Reference List................................................................................................................................ 23
8. Appendices .................................................................................................................................... 25

By Cooper Luskan, n9465812

1. Executive Summary

This case analysis aims to reflect upon the results of Mugly in the QUTopia market day
simulation. The ideas put forth by marketing theory will be applied to the various issues
experienced by Mugly, and critical reflection will be used to pinpoint problem areas and
evaluate solutions to them. The business itself produced nail polish marbled mugs and rustic
rope coasters, allowing the customer to express their sense of individuality through a normally
mundane every day item.

The businesses marketing objectives, developed in conjunction with the SMART goal setting
framework, are as follows:

Fulfil five pre-orders before market day one Not Achieved

Obtain 50 likes on Facebook before market day one Achieved
Break even after market day one Not Achieved
Sell three mother’s day gift packs Achieved
Achieve 30% profitability after market day two Achieved
Gain 30% market share in total Achieved

Although the business only achieved four of its six goals, it did comparatively well when
compared to the rest of the market. It was the market leader with 44.76% market share, 44%
profitability, and turnover of $4495 (see Section 2.4), indicating a positive result in the industry.

Key problems in relation to the failed marketing objectives and other business issues are
identified in the body of this report. These problems include high expenses and their relation to
the unplanned award of bonuses, the inaccuracy of supply and demand forecasts, and issues of
product quality and their effect on sales.

A variety of solutions were developed for each issue faced by the business, which were then
narrowed down through the use of marketing literature to find the most effective solution to
each problem. These solutions are:

 Implementing a structured planning system which sets out all company goals and the
processes by which to achieve them
 Engaging in surveys of the target market, motivated by a no-strings-attached monetary
reward to increase response rates, and
 The implementation of a stringent quality control system to ensure all products are of a
minimum acceptable standard. This system will be continually updated to ensure
constant improvement of quality.

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2. Summary of Marketing Outcomes
2.1. Marketing Objectives

Figure 1: Mugly Marketing Objectives and Outcomes

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 2.2. Sales and Production Outcomes

Figure 2: Mugly Sales and Production Outcomes

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 2.3. Final Profit and Loss Statement

Figure 3: Mugly Final Profit and Loss Statement

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 2.4. Market Share Calculations

Figure 4: Mugly Market Share Calculations

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 3. Evidence for Problems in the Marketing Management of the Campaign

Financial Situation.
 Failed to fulfill market day one objective of reaching actual break-even point, falling short by $148, due to an increase
in fixed costs from the predicted break even analysis to the actual break even analysis (See Appendices A and B)
 Achieved objective of reaching 30% profitability, ending with the highest profitability in the pool of competitors, with
43.98%
 Failed to fulfill objective of 5 pre-orders before market day one, falling short by 1 pre-order. The business received a
further 6 pre-orders between the end of day one and the start of day two.
 Achieved market day one objective of 3 mother’s day gift pack sales.
 Achieved objective of gaining 30% market share, ending as the market leader with 47.46%
 Sales records kept on the days were not entirely accurate and had to be adjusted post-market day to achieve accuracy.
Less of a problem on market day two, as sales decreased as expected following mothers-day, making for a less chaotic
sales environment.
 Pricing strategy was designed to encourage the purchase of bundles, which offered large savings compared to single
purchases. These large savings were twofold: 1) to increase bundle purchases, and 2) to avoid pricing the bundles too
high, as each customer had a set income and was unlikely to spend the majority of it at one business.
 Overpaid each member by Q$50 on market day one, wrote off as a bonus. Then paid each member an unplanned
Q$100 bonus after market day 1.
Negative Positive
 Fixed costs were high and ballooned beyond estimates, resulting in the  Highest profitability shows that despite
break even objective not being achieved. high fixed costs the business remained
 Sales record systems implemented at the last minute were not competitive.
efficient, resulting in a long process to process sales and log emails for  Market share of 47.46% puts the
survey responses. Feedback on the day and post-market day indicates business in the position of market leader.
lost sales as a result (see Appendix C).  High demand resulted in all stock being
 Q$100 bonus was based on inaccurate break even figures from the sold on both days, within 5 minutes of
initial analysis, which likely wouldn’t have been awarded after close of sales.
consulting accurate figures. Bonuses cost the business Q$750 in total.  Pricing strategy succeeded in creating
 Limited income of customers meant bundles were priced lower than demand for bundles, which were the
the business wished. most popular consumption format.
Company Analysis
 The team worked effectively (see Appendix E), with a clear and fair division of roles, a culture of success maximization,
and an overall sense of camaraderie and friendship. All communications were purposeful, regular, and effective, and all
criticism and ideas were welcomed.
 While the roles were well defined, the borders became blurred, with members doing things which may not have strictly
come under their ‘job description’.
 Members channeled stress approaching market day in a positive way, and demonstrated flexibility and reliability in the
chaotic business environment.
 The marketing manager did not over-exercise their power, allowing the members a level of self-management, providing
direction rather than specific instruction, fostering a culture of creativity and self-expression.
 The team generally found an agreeable way around any difficulties which arose.
Negative Positive
 The marketing manager may have seen greater  The blurring of borders between roles had a positive impact in
success with a more stringent management this instance, allowing for greater efficiency, creativity and
strategy. communication.
 The accepting nature of the team was in rare  Each member brought specific skills to the business. All
cases interpreted as reluctance to cause conflict. contributed whole heartedly.
Marketing System
 4/6 of the businesses objectives were achieved, all of which were developed using the SMART goal setting framework.
 Demand wasn’t estimated as efficiently as it could have been, namely with teapot sets (see Appendix C).
 Fixed costs were higher than expected due to lack of sponsorship and sourcing issues. One sponsor was acquired
through a member’s connections; however this was for packaging, which wasn’t the main expense of the business.
 Sourced branding package freely through team member’s connections.
 Twinings agreed to sponsor the business, however their product was never received, and they didn’t reply to emails

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 (see Appendix J).
 Hot chocolate powder was supposed to be given with all sets on market day one, however it was eaten by a team
members dog prior to the day.
 The pricing element worked in the businesses favor, as did the product itself and the promotion strategies (see
Appendices C, D and F). The place element let the business down. Stall 20 is in a corner, which resulted in a backup of
people from not only the Mugly stall, but adjacent businesses stalls, reducing sales (see Appendices C, G and H).
 The social media strategies were effective, with the businesses Facebook page garnering over 50 likes. The posts
language and picture styles fit the businesses image well, and accurately communicated this to the consumer.
Negative Positive
 The break even objective, which was not satisfied, was a SMART goal  Packaging sponsor reduced financial and
when it was set, however figures unavailable at the time rendered it sourcing strain.
unachievable.  Free and professional tailor made
 Demand for teapots underestimated, sourcing was impossible at a branding package.
reasonable price. The business lost many sales in its most popular and  Social media presence maximized reach
profitable area. and image.
 Lack of sponsors for mugs and rope increased costs.  Low price increased bundle sales greatly.
 Low price likely could have been set higher and resulted in greater  High demand for product ensured single
profits. sales still popular.
 Better price list could’ve increased visibility.  Eye catching store design maximized
 Position caused unnecessarily long wait times, resulting in lost sales. visibility.
Customer Analysis
 The marketing plan mainly targeted gift givers. This translated well to the market days, as many customers purchased
the products for others (see Appendix D).
 Main value proposition for customers was emotional, followed by social, in line with main competitor SPLIT.
Customizable pre-order system created emotional connection with the product as planned, as did variety on the days.
 Marketing plan failed to consider tourists on the day, many with higher spending power than the student market.
 Many customers reported purchasing due to the designs of the products, confirming emotional value proposition (see
Appendix D).
 Demand exceeded original expectations. Needed to have more faith in the business.
 Feedback shows that marketing efforts didn’t create enough of an interest or demand for the product (see Appendix C).
Negative Positive
 Could have estimated demand better. Did not consider  Targeted segment effectively.
tourists with extra income in sales estimates.  Higher demand than expected on day one meant
 Many potential customers weren’t interested in the offering. lost sales. Somewhat corrected on day two.
This number could have been decreased by creating a need or  Emotional value proposition falls in line with pre-
desire with the businesses marketing channels. order goals and business image.
Competitor Analysis
 At the time of the marketing report, Mugly had 3 competitors. Near the submission date, a 4 th potential competitor
entered the market (see Appendix K).
 We believed our product to be superior to directly competing products, such as coasters. The business had faith that
our product offering was of a higher caliber than that of the competition.
 Main competitor SPLIT shared emotional and social value propositions, however other lesser competitors did not.
 Mugly was the market leader, outperforming all competitors in market share and profitability (see Section 2.4)
 One of the lesser competitors purchased a premium stall, which was more expensive than Mugly’s stall. The other
lesser competitor simply didn’t place enough emphasis on digital marketing as their most visible communications.
Negative Positive
 New competitor entered market late.  Shared value proposition with main competitor, greater profitability and
 Competitors should have been market share shows more popular offering.
monitored more closely to observe  Late entry was deemed not a competitor, as the business focused on
and counter their strategies. jewelry.
 Higher perceived product quality.
Table 1: Summary of Mugly’s Marketing Management Strengths and Weaknesses

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4. Problem Identification

Mugly was relatively successful as a business over the course of the market day simulations.
However, as with all business ventures, constant improvement is necessary to stay relevant
in the highly volatile business world and combat the negative influences of inertia (Huang et
al., 2017). The most notable areas of potential improvement include expense minimisation,
supply chain management, and demand estimation.

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4.1. Problem 1 – High Expenses and their Reduction of Profit
Mugly’s expenses were inaccurately estimated, from the beginning. The low cost of
some inputs were disregarded; however it became apparent that the costs
accumulated over time. Some costs such as glue and banners weren’t considered at
all, which skewed the budget further. Some input costs were simply accepted as
necessary to retain product quality, and a lack of sponsorship for items such as mugs
and tea pots greatly increased expenses.

Mugly’s bundled offerings were priced extremely cheaply in comparison to the

single products. This strategy was implemented to encourage bulk purchase.
However, due to the limited discressionary income of the target market, prices were
set lower than desired, further reducing profit. Essentially, by increasing price and in
turn lowering demand, profit maximisation can be achieved (Taylor and Greenlaw,
2017) through the analysis of economic measures such as marginal revenue and
cost.

After day one, the business used turnover as a measure of success, rather than
profit. This prompted unplanned bonuses totalling $750. Had profit been calculated,
it would have been evident that such bonuses would put the business below the
break-even point. It is essential to use the correct information when making a
management decision, as it is an invaluable “management tool to ascertain the
organization’s performance” (Stone and Desmond, 2017).

Figure 5 identifies the many aspects of Mugly’s expense management problem.

Analysis identifies the root cause as the use of unsuitable and inaccurate estimates
and measurements, notably the award of bonuses totalling $750, which put the
business below the break-even point, resulting in the failure of a key business
objective (see Sections 2.1 and 2.3).

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Figure 5: Root Cause Analysis Fishbone Diagram of High Expenses

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4.2. Problem 2 – Supply and Demand Inaccuracies
Mugly knew the high priced “tea set” offering would be one of its most successful
packages across both market days. However, sourcing tea pots within budget
became a problem. Only 3 tea pots were made for sale on the first day, and tea pots
were a pre-order only item on the second day.

This was due to an underestimated demand for the businesses products, which was
difficult to manage due to pricing limitations (see Section 4.1), and resulted in the
business losing potential sales. Furthermore, a lack of direct competition added to
the high demand experienced, and an unmotivated and uncreative approach to
sourcing inputs and sponsorship caused supply to be limited by budget.

Figure 6 shows that the supply and demand issues experienced had a number of
influences. Root cause analysis pinpoints that inaccuracy of demand predictions is
the causative influence. The business needed to understand that reliance on past
data does not yield the most accurate demand plan model (Sharma, 2009), and that
“inaccurate forecasts can significantly influence the performance of the supply chain
in terms of increased inventory costs, backorders or loss of sales (Aksoy, Ozturk and
Sucky, 2012). Had demand been estimated accurately, management would have
been less reluctant to invest in more stock, as the profit potential evidently would
outweigh the expenses.

Figure 6: Root Cause Analysis Fishbone Diagram of Supply and Demand Issues

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 4.3. Problem 3 – Product Quality and its Effect on Sales
Across both market days, Mugly sold out within 5 minutes of close of sales. However
it became apparent that the higher quality products sold first, leaving the mugs with
less attractive designs and the coasters of poorer quality to be sold last.
Consequently, sales slowed towards the end of the day, when the remaining
products were essentially the worst products.

The cost of high quality inputs meant they were less accessible, which had a
negative impact on product quality, as some inputs such as glue had a very real
price-quality interaction. Furthermore, the lack of sponsors to provide high quality
inputs freely placed more stress on the budget. Survey results after market day one
showed that some customers experienced poor product quality (see Appendix L),
which was a symptom of poor quality control.

In consultation with Figure 7, root cause analysis identifies a lack of quality control
as the cause of a decline in sales towards the end of trading hours, due to the lower
quality offerings being sold last. An effective supply chain wide quality control
system would have detected and addressed all quality issues at the source, a critical
step in producing products that meet the requirements of the customer (Sila,
Ebrahimpour and Birkholz, 2006). As a result, sales would have remained constant,
increasing not only profit, but customer satisfaction, which “plays a very important
part in ensuring customer loyalty and retention” (Mohsan et al., 2011).

Figure 7: Root Cause Analysis Fishbone Diagram of Product Quality Issues

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5. Statement and Evaluation of Alternatives
The business world is a highly volatile and ever changing market, and there is rarely a clear
cut answer to any problem. As such, it is important to devise a number of solutions to any
major problem in order to adequately understand the implications of a solution, and to
effectively implement the most efficient solution.

5.1 High Expenses and their Reduction of Profit

5.1.1 Solution 1 - Adjust Pricing Strategy

A solution that doesn’t affect the expenses of the business, however if
implemented correctly will increase profits, offsetting expenses. The
business priced many of its higher end products at a lower price than
desired, due to the perceived lack of spending power of the target market,
and the desire to maximise sales. However, the theory of profit
maximisation states that it is possible to increase prices, and in turn
decrease sales, but still see an increase in profit (Taylor and Greenlaw,
2017). Profit maximisation can be achieved by conducting economic analysis
of the product, and determines the point where marginal revenue and
marginal cost are equal. This can be done relatively easily, and graphing
makes the data easy to understand.

5.1.2 Solution 2 - Planning Bonuses

One of the main expenses was bonuses, which increased the businesses
expenses by 37.3% (see Section 2.3). The bonuses were not included in the
marketing plan, as they were completely unplanned. They were a result of
an accounting error caused each member to be overpaid by $50, and
another error at the end of the first market day, which caused the turnover
of the business to be evaluated as the businesses net profit, giving an
extremely inaccurate measure of the businesses success, resulting in each
member being awarded an unplanned $100 bonus. In the future, any
bonuses should be detailed in the marketing plan, the award of which
should depend upon the satisfaction of strict performance criteria and
benchmarks, which are used to gauge success and pinpoint shortcomings
(Suttle, n.d.). Furthermore, the figures used to measure success should be
detailed in the marketing plan to avoid any confusion and mistakes made in
the excitement following the market day.

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5.2 Supply and Demand Inaccuracies

5.2.1 Solution 1 – Using other methods to accurately forecast demand

Forecasted demand plays a vital role in inventory management. However, it
is important to note that using past data to forecast future demand can be
inaccurate (Sharma, 2009). From general experience, it can be determined
that surveys generally have a low response rate, especially in the target
market. Kanuk and Berenson (1975) have shown that survey response rates
increase with rewards. As such, conducting a series of surveys dealing
mainly with pricing and the popularity of the products should be conducted.
A financial reward will be offered upon completion of the survey. Kanuk and
Berenson (1975) showed that immediate rewards were a more effective
motivator, as opposed to promised rewards. As such, the recommended
strategy is to give each survey respondent a small cash reward, rather than
offering a discount on the actual businesses product. This serves as a
gesture of good faith, and is a more immediate reward.

5.2.2 Solution 2 – Liaising with suppliers and potential sponsors

The main issue was that the demand outweighed the supply. A subsequent
issue was that the business didn’t want to waste money on expensive
products which might not sell, and that retail stock of these products was
generally low. The business lacked creativity and motivation when searching
for sponsors and suppliers, simply sending out emails with no responses.
The Oxford College of Procurement and Supply (n.d.) highlights that proper
communication with suppliers can streamline the supply chain management
process. Email can be a one way communication method, as experienced in
the sponsor-seeking process by the business. As such, a simple alternative is
to call your supplier instead of email. This facilitates a conversation which
they cannot simply ignore. This has the opportunity to turn into a
sponsorship or the ability to actually order stock through the store, rather
than being limited to the stock on hand.

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5.3 Product Quality and its Effect on Sales

5.3.1 Solution 1 – Implement Quality Controls

A problem related to the quality of the products is that there were
noticeable lower quality products, resulting in a sales slump towards the end
of each day as the remaining products were of lower quality. Quality control
is the process of ensuring a products quality is maintained and improved,
and manufacturing errors are eliminated (Investopedia, 2017). Such quality
controls ensure product quality meets or exceeds the expectations set by
the businesses marketing efforts, as Anderson and Sullivan (1993) have
shown that “quality which falls short of expectations has a great impact on
satisfaction”. The production methods should be clearly documented to
ensure an acceptable minimum quality level across the product range, and
each item should be individually assessed against a variety of criteria such as
colour coverage, colour retention and dishwasher safety, rope adhesion,
and other more subjective measures such as aesthetic appeal.

5.3.2 Solution 2 – Lower price to lower image of quality

The Mugly products were priced as a premium product, which gives the
consumer an expectation of quality. Furthermore, the businesses products
have no reputation in the market, and as a result their quality is likely to be
evaluated largely based on price (McConnell, 1968). As a result, it is essential
that if raising quality to meet expectations set by the current price is not an
option; the price must be lowered to meet the expectations of price set by
the product itself.

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5.4 Evaluation of Alternatives

5.4.1 High Expenses and their Reduction of Profit

Adjust Pricing Planning

Customer Pain: Increases unit cost for
customers. Ultimately increases profit for
business, but nevertheless is bad for the
customer.
Ease to Solve: Requires economic analysis of
revenue and expenses, and some economic
knowledge. Not easy, but not too difficult.
Effect on other Marketing Processes: Will
have some effect on production and profits,
but will be marginal and easy to
accommodate.
Speed to Solve: Analysis will take some time
if inexperienced, pricing adjustment however
will be easily implemented.
Table 2: Score Justification for High Expenses Decision Matrix
Customer Pain: An entirely internal process,
and has no effect on the product or its price.
Ease to Solve: Requires planning at the
marketing plan level, and benchmarks must
be considered and set realistically. However
this is still fairly straightforward.
Effect on other Marketing Processes: Will
affect accounting process by adding more
restrictions and rules, and may place pressure
on team members to perform better.
Speed to Solve: Requires making additions to
the marketing plan, however as mentioned
above these additions are fairly
straightforward.

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5.4.2 Supply and Demand Inaccuracies

Forecasting Suppliers
Customer Pain: Completely internal process Customer Pain: Completely internal process
which has no observable effect on the which has no observable effect on the
customer. customer.
Ease to Solve: Requires the development of Ease to Solve: Liaising with large ‘suppliers’
surveys, and a financial penalty to the as essentially the smallest business
business. However this is a fairly imaginable isn’t easy, and will likely be met
straightforward process. with resistance.
Effect on other Marketing Processes: Has an Effect on other Marketing Processes:
effect on the planning process and on the Requires more time to be invested into
accounting function due to financial sourcing processes, however is a fairly
involvement, however the influence is isolated function.
minimal. Speed to Solve: Liaising with suppliers who
Speed to Solve: Creating survey takes time, as most likely have little interest or investment
does receiving responses. This won’t be a in the business will be time consuming and
length solution, but won’t be extremely quick frustrating, however with enough persistence
either. will eventually work.
Table 3: Score Justification for Supply and Demand Decision Matrix

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5.4.3 Product Quality and its Effect on Sales

Quality Control Reduce Price

Customer Pain: Results in the customer Customer Pain: Results in the customer
receiving a better product at no extra cost. receiving a lower quality product than they
Ease to Solve: Implementing quality control might desire, however the price reflects this.
in the production process will require Ease to Solve: Accounting and pricing
standards to be set, and will add more work function is affected through lost profits and
into the production aspect of the business. price changes, however this is a fairly
Effect on other Marketing Processes: isolated disruption.
Effects production process, however not Effect on other Marketing Processes: Price
greatly. Longer production times will be reduction effects finances, however it is
marginal. Standards need to be devised, easily implemented.
which will be relatively straight forward. Speed to Solve: Price reduction can be made
Speed to Solve: Implementing quality control very quickly, however all old prices will need
will add to the production process slightly, to be updated to avoid confusion and damage
and require standards to be developed. Will to business image.
not be a medium length fix.
Table 4: Score Justification for Product Quality Decision Matrix

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6. Recommendations for the Future

As a result of the analysis conducted in Sections 4 and 5, it is recommended that Mugly

implement the following strategies to manage the problems faced by the business in the
market day simulation.

6.1 Problem 1 - High Expenses and their Reduction of Profit

To reduce the likelihood of self-inflicted damage based on uneducated decisions, the
business should implement a stringent planning phase. This outlines the financial
measures with which the business will evaluate its performance accurately, and will
create a framework of business performance objectives, which will dictate the
award of bonuses.

It is important to keep a level head when making business decisions, and good
planning allows you to set an end goal, which makes decision making more efficient
(Bhasin, 2017). Equally important is ensuring that the correct financial measures are
used to evaluate business performance, as accurate financial analysis can evaluate
all areas of the business (Mišanková, n.d.).

This planning phase will allow the business to set clear goals and will prevent spur of
the moment decisions which can have drastic long term effects on the business. As
such, unnecessary expenses will be avoided, reducing the financial pressure felt by
the business. This will allow for more efficient decision making not only in the
financial areas of the business, but across all aspects of business operations,
increasing efficiency across the board.

6.2 Problem 2 – Supply and Demand Inaccuracies

To better estimate demand, it is recommended that the business engage in a
process of data collection by surveying the target market. Traditionally, many
surveys have poor response rates, and as such the recommended approach is to
offer a monetary incentive to the respondent, which is available for use at any store
in QUTopia, not just the business itself. Research indicates that the introduction of a
monetary incentive can increase response rates by almost double (Edwards et al.,
2002). The data collected directly from the target market will allow the business to
gauge the demand with a level of accuracy not previously available with past data.
However it is important to use this survey data to build on the results found by
analysing past data, as these figures are valuable as well.

The use of survey data will allow the business to predict demand with greater
accuracy, by getting answers directly from the businesses potential customers. This
will improve cash-flow, as the business will have greater financial security and feel
more comfortable spending money on product inputs. Furthermore, sales will
improve, as the business will be able to produce more accurate amounts of
inventory to ensure sales remain steady until close of business.

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6.3 Problem 3 – Product Quality and its Effect on Sales
To virtually eliminate the possibility of a slowing in sales due to the quality of
leftover stock, the business is recommended to implement a quality control system
in the production department. This will ensure that all products are of a minimal
acceptable standard, and those that do not pass the quality control testing will be
recycled and remade. It is likely, however, that the problem will re-appear, as
product quality gets better, there will still be outliers that are better or worse than
other products. To counter this, a system of continual quality control should be
implemented, whereby the standards of production are narrowed over time to
ensure that all products are eventually the peak of which the businesses production
process can produce.

The implementation of this system will result in an increase of sales, as product sales
will remain constant throughout the sales period, eliminating the lower quality
products which caused a slump in sales towards the end of the day. This will in turn
increase customer satisfaction, as theory shows that customer satisfaction is
affected by the perceived quality of a business’s product (Anderson and Sullivan,
1993; Cronin and Taylor, 1992; Oliver and De Sarbo, 1988, cited in Ford, Joseph and
Joseph, 1999).

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7. Reference List

Aksoy, A., Ozturk, N., & Sucky, E. (2012). A decision support system for demand forecasting in
the clothing industry. International Journal of Clothing Science and Technology, 24(4),
221-236. doi:http://dx.doi.org.ezp01.library.qut.edu.au/10.1108/09556221211232829
Anderson, E.W. and Sullivan, M.W., 1993. The antecedents and consequences of customer
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8. Appendices
8.1 Appendix A – Predicted Break Even Analysis

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8.2 Appendix B – Actual Break Even Analysis

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8.3 Appendix C – Negative Feedback

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8.4 Appendix D – Positive Feedback

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8.5 Appendix E – Mind Tools Team Effectiveness Assessment (Mindtools.com, 2017)

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8.6 Appendix F – Facebook Post Examples and Engagement Statistics

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8.7 Appendix G – QUTopia Foot Traffic Map

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8.8 Appendix H – Mugly Stall

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8.9 Appendix I – Consumption Patterns of Mugly and Competitors

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8.10 Appendix J – Sponsorship Correspondence

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8.11 Appendix K – Market Share Calculation Including Little Swirling

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8.12 Appendix L – Post Market Day 1 Survey Results

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