Case 1 (Fatigued Media Strategy)
Historically, the vertical media had been attracting a high volume of
profitable customers. However, as the cost of vertical media advertising
increased and the customer's quality decreased, Gourmet-Direct Inc. decided
to cease vertical media advertising. This decision has substantially impacted
the company's sales volume. After a series of data mining efforts using
the customer database, the company has identified specific highly profitable
segments within this media. By targeting only these selected segments,
the company was able to renegotiate volume tier structure pricing to reduce
vertical media costs and increase profit.
Business Case 2 (Product Bundle Strategy)
MegaMakeup Inc. sells makeup at low cost directly to consumers via mail
order. The company would like to increase sales by bundling products without
impacting operational costs. After a sequence of optimization analyses
and experimental designs, the company developed a makeup kit consisting
of existing products that meets the current standard packaging size limitations.
This best-selling makeup kit has increased the company sales by 25% with
no impact on operational costs.