Executive Summary
The Purpose of the report is to analyze the current position of Rock CD, a traditional bricks ‘n mortar (ie non-web) music CD seller with its online Counterparts.
To achieve this purpose, first, three online music CD sellers are selected and relevant information is collected.
Then RockCD’s retail prices for selected CDs are compared with those of three other companies selling those CDs. Music Category is kept as the base for comparison. It had become apparent that their strongest competition was now coming from Web-based CD retailers rather than from other traditional stores.
Using the results of the price comparison, the amount of profit to be made from a special sales promotion that would be planned is identified. Also, CDs with a 38% or greater mark-up rate RockCD could purchase if they were to spend $75,000 on such purchase is also calculated.
Finally, a PowerPoint presentation is developed summarizing the findings and recommendations.
Introduction
The Purpose of the report is to analyze the current position of Rock CD, a traditional bricks ‘n mortar (i.e. non-web) music CD seller with its online Counterparts.
The Six major tasks to achieve the task include:
- First, Queried the RockCD database to extract all the database records meeting the criteria given.
- Then, searched the Worldwide Web and identified three sites selling the same CDs and their retail prices.
- Then, made a Retail price comparison between RockCD and identified companies.
- Then, analyzed sales promotion profit and determined the total profit in actual dollars and as a percentage of outlay for purchases of the CDs.
Then analyzed alternative purchase quantity and determined how many CDs with a markup rate of 38% or more could be purchased with $75,000. Finally, developed a PowerPoint presentation.
Discussion
Three Companies were identified through web research. The Companies are CDUniverse, quick shop, and BuyCD. The retail prices of these companies are compared with RockCD.
The following Chart will give a suitable explanation.
From the comparison, it is very clear that the retail prices of RockCd are low compared to its counterparts. This means the mark-up rate of RockCD is quite low. The retail price quoted by RockCD in all categories is lower than the rest. This shows that RockCD can position itself as the low-cost producer and become the market leader if it enters the online marketplace. BuyCD will compete with RockCD in retail price.
The profit that RockCD could make if all the CDs purchased were sold is $44,156.70 with a profit outlay of 41.3452 %. Refer Appendix B for full details.
Increasing the purchases of CDs with a 38% or greater markup will improve the profit and reduce the stock level in RockCD. The quantity of CD’s to be purchased will reduce to 5988 from 6400.
Excel’s Goal Seek function calculates the question from the result. Here, the question is “How many CD’s to purchase with $75000?” The result is $75000 and the number of CD’s needed to make the result (5988 CD’s) is calculated using the goal Seek feature of Excel. This is a very useful tool for performing a “What-if” Analysis.
Conclusion and Recommendations
The retail price quoted by RockCD in all categories is lower than the rest. The mark-up rate of RockCD is quite low. RockCD can position itself as the low-cost producer and become the market leader if it enters the online marketplace. BuyCD will compete with RockCD in retail price. The profit that RockCD could make if all the CD’s purchased were sold is $44,156.70 with a profit outlay of 41.3452 %.
Based on the above findings, the following recommendations are suggested:
- Sell Music Cd’s Online.
- Allocate sufficient marketing budget for online sales promotion.
- ‘Free Shipping to anywhere’ to be adopted in the online business model.
Appendices
Appendix A – Search the WWW & Retail price comparison
Appendix B – Promotional sales profits
Absolute Cell referencing formulae
=IF(C3<0.38,B3* $B$14,B3* $B$13)
Appendix C – Alternative purchase quantity
Appendix D – PowerPoint Presentation
Appendix E – Database query
SELECT MusicCD.[Production Company], MusicCD.[Purchase Price], MusicCD.[Copyright Year], MusicCD.Category, [Markup Rates]. Markup FROM [Markup Rates] INNER JOIN MusicCD ON [Markup Rates].[Production Company] = MusicCD.[Production Company];
Dynaset
Appendix F – Email
Query the RockCD database. Use an SQL Query to extract the entire database records that meet the criteria. Also, describe how you did the query.
Creating Query – query1 Description
The query to extract Purchase price, Production Company, Category, Copyright Year, and Mark-up Rate is created by following the steps below.
- Step 1: Open the Microsoft access database file “t107_CD_database_2000”.
- Step 2: The tables will be seen.
- Step 3: Click the ‘Queries’ tab in the left corner of the ‘object’ panel.
- Step 4: Now on the right side, two options are available: Create query in Design View and Create query using Wizard.
- Step 5: Click ‘Create query using Wizard’. The following window pops up.
- Step 6: Move your mouse to the Tables/Queries Scroll bar and select Table: Music CD.
- Step 7: Here select ‘Production Company’ from the Available fields panel.
- Step 8: Click the > button to move it to the right side as follows.
- Step 9: Similarly repeat steps 7 and 8 for selecting fields – Purchase Price, Copyright year and Category.
- Step 10: Now follow step 6 and select Table: Markup Rates. Here select Markup from the ‘Available fields’ panel.
- Step 11: Follow step 8 and move Markup to the right side. Now the screen looks like this.
- Step 12: Click the ‘Next >’ button.
- Step 13: Click the ‘Next >’ button again. Type a title for the query in the appearing window.
- Step 14: Click the Finish button.
Exporting a query to an Excel Spreadsheet
Select the query you have created above and right-click on it. Here select the Export option.
Here type the file name to save and select Microsoft Excel 97 – 2002 from the drop-down menu. Click Export.
The Query is now exported into an excel file.