The Situation Analysis has five areas: Perceptual Map, Demand Analysis, Capacity Analysis, Margin Analysis, and Consumer

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The Situation Analysis has five areas: Perceptual Map, DemandAnalysis, Capacity Analysis, Margin Analysis, and Consumer Report.You can divide the areas anyway you wish. Choose an analysis thatinterests you, or if you prefer, assign the tasks based on eachteam member’s functional area:
• The R&D Department can complete the Perceptual Map (newand revised products will not sell if they are not inside a segmentcircle)
• The Marketing Department can calculate the Demand Analysis(understanding current and future demand levels is crucial foraccurate sales forecasting)
• The Production Department can do the Capacity Analysis(understanding the costs associated with purchasing new Capacityand Automation is extremely important)
• The Finance Department can look at the Margin Analysis (cashfrom operations is factored into the balance sheet)
• The R&D and Marketing Departments can complete theConsumer Report (poorly perceived products can be revised, pricedmore aggressively, or promoted more heavily)
The Situation Analysis will give you an idea of where the marketcurrently stands and where it will go. Answer the followingquestions on situation analysis:
a. On the Perceptual Map, all segments drift to the lower right.Which segment drifts at the fastest rate? Which drifts at theslowest?
b. Each Segment’s Ideal Spot shows the buyer’s preferredcoordinates within the circle. Why is the High-End Ideal Spot tothe lower right of the segment center? Why is the Low-End IdealSpot to the upper left of the Low-End segment center?
c. Explain how increasing First Shift Capacity can reduce perunit labor costs.
d. Automation reduces per unit labor costs but it has twodisadvantages. What are these?
e. A product’s margin is determined by subtracting itsmanufacturing costs (labor and material) from its price. Logically,higher prices and lower labor and material costs result in highermargins. Keeping in mind the Customer Buying Criteria, how wouldyou increase margins for a Low-End product? How would you increasemargins for a High-End product