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Customers and Products Analysis
Reviewed and analyzed the dataset and made critical decisions about the company's potential future expansion. This project's purpose was to go over the concerns they have and extract solutions based on the data.
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Challenge
Vehicle Models Company is a hypothetical wholesale distributor of die cast models of vehicles ranging from classic automobiles to aircraft. The company has clients in over 15 countries worldwide.
Scenario: The company has asked me to review and analyze its dataset in order to make some critical decisions about potential future expansion. This project's purpose is to go over the concerns they have and extract solutions based on the data.
Goal: This analysis aims to examine the questions and concerns the company has and derive responses from the data. It should be mentioned that the organization has allowed me to make assumptions because they do not have people that can address the concerns and questions. I've been told that clarification (on my assumptions) will be provided once the initial report is completed.
Questions:
- Identify the top 10 models that are sold the most.
- Identify the top 5 customers.
- Which countries should we concentrate our marketing efforts in order to maximize our profits?
- Identify the best and worst categories for each country.
- Determine the sales performance over the entire sales period.
- We want to grow our sales staff, but we need to know how our present sales team is performing.
- Should we prioritize acquiring new consumers or engaging our existing customers in order to grow sales?
- Is there anything in our inventory that hasn't sold in a long time?
Project Results
The suggestions based on the information received after analyzing the data in response to the questions posed by the Vehicle Model Company are listed below.
Clients:
- Concentrate on encouraging current customers to make larger purchases because, at the moment, monthly sales appear to be more dependent on the acquisition of new clients, which may be an expensive investment.
- Loyal customers should be rewarded. If there isn't already a loyalty program, it might be a wise idea to establish one. It will attract larger orders and guarantee continuous business.
- Focus on attracting new consumers to maintain the monthly sales figures until the company can persuade existing customers to make larger purchases. According to the data, it was discovered that since September 2004, there have been no new clients, which is concerning because they are responsible for a large portion of the present revenues.
Salesmen:
- Sales representatives appear to be performing well overall. However, to perform even better, they should start encouraging clients to make larger purchases, which boosts revenues on each order.
- Along with boosting client orders, sales representatives need to be driven to persuade customers in their territory to purchase more items in a single order.
- Sales representatives in the US need to perform better to increase consumer confidence in their area. Given that there are several zonal offices in the area and that market intelligence is easily accessible, the sales staff ought to be able to determine what is preventing their consumers from making larger purchases. Given that regional sales are significantly lower than those in the European region, this recommendation is being made.
Existing and Potential Markets:
- Asia-Pacific region markets appear to be underdeveloped. There are probably many buyers eager to spend money on models, at least as a hobby, given the advancement of technology and a market boom.
- Consideration of major market growth into Europe would be a wise investment. Many European countries, like Spain, Norway, and Switzerland, have the resources and are prepared to pay more for each order. For Asian markets like Singapore, the same is valid.
Products:
- Classic and Vintage car models are the most popular product categories. To boost the value of these models and generate demand, it would be useful to link them to a relevant history.
- To better understand why some product lines are not as popular, it would be wise to introduce new categories in addition to the ones already present for the product line. Although it's true that Trains are the least popular, this may not apply to all train-related items. Improved sub-categorization, based on the model's production year or date, could help determine how buyers feel about it.
- Although it is helpful to know that there is just one product that qualifies as deadstock, it's not wise to continue hanging onto it given the hit to earnings it is causing. Action must be done against the product as soon as possible; else, the loss from damage might be significant.
- The company should take into account additional product categories outside model vehicles, such as stickers, toys, etc., that might help in business expansion.
Overall:
- Prior to actually implementing this, the Marketing and Finance teams should review this report. Any assumptions made in this report were done without feedback from these departments, thus some of them might not be accurate. For instance, the net revenue for the years 2003 and 2004 is just little over $3,000,000. This estimate does not account for overhead expenses like fees, replacement prices, refunds, etc.
More data should be gathered in the future for better analysis. The following information might be useful:
- Data on overhead expenses for each order, including fees and discounts.
- Data on credits or refunds for defective products.
- Data on customer-end purchases to determine how the end client interacts with the offering. By demonstrating end-user behavior, this data may enable the company's sales representatives to encourage clients to make larger purchases.
