Market-Based Management 6th Edition by Roger Best

Exercise 6

The four interactive marketing performance tools and application exercises outlined here will add to your understanding of competitor analysis and sources of competitive advantage. To access the tools, go to www.MBMBEST.com.You may determine the answers to many of the questions by entering data offered. You may also enter your own data to see the results, and you can save your work. Each marketing performance tool is based on the Chapter 6 figure referenced in parenthesis.
Cost Advantage (Figure 6-6 and Appendix 6.2)
A. Estimate the experience curve coefficient for a cost curve with an initial unit cost of $100, an initial cumulative volume of 50,000 units, a current unit cost of $70, and a cumulative volume of 300,000 units.
B. What is the estimated unit cost when the business hits a cumulative volume of 1 million units?
C. What cost advantage will the business have at a cumulative volume of 1 million units if we assume that the business's closest competitor is on the same experience curve with a cumulative volume of 500,000 units?