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[answered] MARKETING ANALYTICS: Case Study Name: ____________________


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MARKETING ANALYTICS: Case Study Name: ____________________

? Stephan Sorger 2013; www.stephansorger.com Date: ________________________

Case No. Chapters Case Title

Market Segmentation: Perceptual Map of Smartphone Market

Background: Your Role

You are the head of marketing for U.S. operations at Finnish communications and mobile telephone manufacturer Nokia. Nokia manufactures many basic cellular telephones, but has struggled to win over U.S. customers with their smartphones in the U.S. market. The company has watched Apple and Android devices grasp market share while Nokia?s share dwindles.

Background: Mobile Phone Market

The mobile phone market is significant. Industry analyst firm IDC estimates a total of 1.832 billion units shipped in 2013. This is a 5.5% increase from the 1.736 billion units shipped in 2012. IDC predicts a compound annual growth rate (CAGR) of 5.6% from 2013 to 2017. (Ref. 3-1)

(Ref. 3-1) Source: IDC, ?Worldwide Mobile Phone 2013-2017 Forecast and Analysis.? March 2013.

http://www.idc.com/getdoc.jsp?

Industry analyst firm Strategy Analytics estimated market share of the mobile handset market, as measured

in units shipped, for each of the major vendors for Q2 2013: (Ref. 3-2)

-Samsung: 27.7%, up from 25.0% in Q2 2012

-Nokia: 15.8%, down from 22.5% in Q2 2012

-Apple: 8.1%, up from 7.0% in Q2 2012

-LG: 4.6%, up from 3.5% in Q2 2012

-ZTE: 4.6%, up from 4.5% in Q2 2012

-Others: 39.2%

(Ref. 3-2) Source: Strategy Analytics, reported in bgr.com article: Epstein, Zach. ?Sizing up the Mobile Handset Market in Q2.? July 26,

2013.

http://bgr.com/2013/07/26/mobile-phone-market-share-q2-2013/

But the data shows all mobile phones, not smartphones. Smartphones represent the highest growth category,

and account for approximately 51% of all mobile phones sold.

Background: Nokia Smartphones in 2012

In 2012, Nokia partnered with Microsoft to increase its share of the smartphone market, launching the Nokia

Lumia 900 for the U.S. market. The U.S. market has vexed Nokia. ?The big question will be how they tackle

the U.S. market, where they have virtually no presence anymore,? said Mark Newman, an industry analyst at

Informa Media and Telecoms in London. Microsoft acknowledged that introducing their operating system

might not guarantee success. ?We recognize that Windows phone is the challenger in the market against

established alternatives,? said Terry Myerson, a vice president of Microsoft?s phone unit. (Ref. 3-3)

(Ref. 3-3) Source: O?Brien, Kevin. ?One Year Later, Nokia and Microsoft Deliver.? New York Times. February 27, 2012. http://www.nytimes.com/2012/02/28/technology/one-year-later-nokia-and-microsoft-start-to-deliver.html?&

The results were a bit disappointing. According to industry analyst firm Gartner, Nokia sank to 7th place in the

booming smartphone business in the third quarter of 2012. The company accounted for only 4.3% of

smartphones. Meanwhile, the Google Android platform market share rose from 52.5% to 72.4% in the same

year. Nokia CEO Stephen Elop acknowledged he needs to make up significant ground in order to take on

rivals such as Apple, Samsung, and Google. Mr. Elop cited some issues with the retail sales environment,

stating, ?Our innovation doesn?t matter at all, if these features aren?t presented well in the retail

environment..? (Ref 3-4)

(Ref. 3-4) Source: Sandstrom, Gustav and Grundberg, Sven. ?Nokia Slips to Seventh in Smartphone Market.? November 14, 2012.

http://online.wsj.com/article/SB10001424127887324556304578118360942919142.html

Marketing Analytics: Case Studies

? Stephan Sorger, 2013; www.StephanSorger.com 2

Background: Nokia Smartphones in 2013

In 2013, Nokia introduced the Lumia 1020, a Windows Phone 8 cell phone with a 41 megapixel (MP) camera. Analysts agree that the digital light sensor in the camera is especially sensitive to light. Because of the light sensitivity, photos in low light levels are surprisingly good. Analysts also praise the mini strobe flash, emitting much more light than the light emitting diodes (LEDs) found on most camera phones.

On the other hand, the camera in the Lumia 1020 phone suffers from irritating shutter lag and distortion at the outer edges of the frame. Furthermore, the camera uses digital zoom, not optical zoom, causing graininess when shooting zoom shots. The phone is large, measuring 5.1 by 2.8 by 0.4 inches. Analysts say it is ?as if you?re holding a DVD box up to your ear.? The lens creates a bulge on the back preventing it from lying flat. The camera software is difficult to use, requiring three separate apps to take photos. Critics also note the lack of availability of third-party apps for Windows, such as Pinterest, Gogole Maps, and Instagram. (Ref 3-5)

(Ref 3-5) Source: Pogue, David. ?A Camera That Stuns, a Phone That Puzzles.? August 15, 2013.

http://www.nytimes.com/2013/08/15/technology/personaltech/lumia-1020-a-great-camera-grafted-to-an-oddballphone.html?

Nokia sold 7.4 million Lumia smartphone devices in Q2 2013, which accounts for approximately 3.2% of the 225 million smartphones sold worldwide in Q2 2013. Nokia?s total handset shipment volume fell 27% year over year from 83.7 million in Q2 2012 to 61.1 million in Q2 2013. (Ref 3-6 and Ref. 3-7)

(Ref 3-6) Epstein, Zach. ?Nokia narrows Q2 loss; Lumia sales reach record 7.4M, but U.S. sales slide 17%.? BGR.com. July 18, 2013.

http://bgr.com/2013/07/18/nokia-earnings-q2-2013/

(Ref 3-7). Sharma, Samidha. ?Smartphone sales exceed feature phones in Q2 2013: Gartner.? The Times of India. August 14, 2013.

http://timesofindia.indiatimes.com/tech/tech-news/hardware/Smartphone-sales-exceed-feature-phones-in-Q2-2013 Gartner/articleshow/21823039.cms

Background: Smartphone Evaluation Criteria

Determined to win back market share, you research the market to discover what consumers really want in a

smartphone. You come across an article in technology review firm CNET, which reviews smartphones, among other devices. You note the evaluation criteria they cite: (Ref 3-8)

(Ref 3-8): Bennett, Brian. ?How We Test: Cell Phones.? CNET.com. February 5, 2013.

http://reviews.cnet.com/how-we-test/cell-phones/

Criteria Category ??????????????????????????????????????????????????????????????????? ??????????? Detail

Design and Usability: ???????????? Physical attributes: size, weight, thickness, materials

Screen: Size, resolution, brightness, contrast, color accuracy

Button layout

Processor Speed: ??????????????????? Benchmark tests to test processor speed for smartphones

Example: Linpack

Battery Life: ?????????????????????????? Benchmark tests to measure battery life duration

Wireless radios switched off. Volume and brightness set to 50%

Run movie file until battery dies

Call Quality: ?????????????????????????? Place calls from controlled indoor office environment

Assess volume level, distortion, audio compression

Place calls also from noisy environment

Data Speeds: ????????????????????????? Run tests on fastest available network (4G LTE, 3G, etc.)

Example: Oookla data speed app for Apple iOS, Android, Windows Speed in megabits per second (Mbps)

Overall Speed: ??????????????????????? Test various operations

Examples: Boot time, Total power-up time, Camera boot time

Web page rendering time

Photo/Video Quality: ???????????? Test lens, sensor, electronics, as well as any photo apps

Examples: Lifelike color, Low light, Fast-moving objects

Nokia Positioning

You decide to conduct a positioning exercise to increase Nokia?s appeal in the U.S. market. You assemble a team of power users familiar with smartphones, including Apple, Samsung, and other Android units, such as LG. If your team includes a Nokia user, then they will provide their input. If not, you will need to perform an Internet search on user experiences for Nokia.

You start by declaring a market segment, hopefully one not already dominated by your competitors. Market segments include groups of users with different needs from smartphones. Example segments include:

-Business users

-Artists

-Students

-Military and law enforcement officers (LEOs)

-Luxury rich

-Technical geeks (who will hotrod the processor by overclocking it and develop apps to boost performance)

-Frequent travelers

-Frugal

-Athletes

-Other

Because of the vast size of the market, it is suggested to select a primary market segment and one or more secondary market segment(s).

1. Record your selected market segment(s)

Market Segment ?????? ??Characteristics???????????????????????????????????????????????????????

1.???????????????????????????????? |?????????????????????????????????????????????????????????????????????????????????? |

2.???????????????????????????????? |?????????????????????????????????????????????????????????????????????????????????? |

3.???????????????????????????????? |??????????????????????????????????????????????????????????????????????????????? ?? |

Next, you consider how your market segments will evaluate smartphones. Your goal is to make Nokia smartphones attractive to one or more market segments. In this exercise, you are allowed to plan changes to existing Nokia models to attract market segments. You will need to identify which evaluation criteria matter the most to your planned market segments.

2. From the CNET list of evaluation criteria categories, select the ones which your market segment(s) value.

Criterion ?????????????????? ?Why Criterion Matters???????????????????????????????????????????????????????????????????

1.???????????????????????????????? |?????????????????????????????????????????????????????????????????????????????????? ??????????????????????? |

2.???????????????????????????????? |?????????????????????????????????????????????????????????????????????????????????? ??????????????????????? |

3.???????????????????????????????? |??????????????????????????????????????????????????????????????????????????????? ?? ??????????????????????? |

4.???????????????????????????????? |?????????????????????????????????????????????????????????????????????????????????????????????????????????? |

5.???????????????????????????????? |?????????????????????????????????????????????????????????????????????????????????????????????????????????? |

Marketing Analytics: Case Studies

You now need to conduct a market survey to assess how each competitor fares in the criteria you selected for the market segments you have chosen. If this were a real market survey, you would send out a survey to many people. For this exercise, simply average out the responses from your team members.

3. Conduct a market survey (with your group as the survey population) to gather market perception for the

different available brands of smartphones, given the market segments you plan to target. Rate the degree to which each brand performs in each criterion from ?1? (poor) to ?5? (neutral) to ?10? (outstanding).

Brand ??????????????????????? Criterion 1 ??? Criterion 2 ??? Criterion 3 ??? Criterion 4 ??? Criterion 5

Brand: Nokia? |??????????????????????? |?????????????????????? |?????????????????????? |?????????????????????? |??????????????????????

Brand:???????????? |?????????????????????? |?????????????????????? |?????????????????????? |?????????????????????? |??????????????????????

Brand:???????????? |?????????????????????? |?????????????????????? |?????????????????????? |?????????????????????? |??????????????????????

Brand:???????????? |?????????????????????? |?????????????????????? |?????????????????????? |?????????????????????? |??????????????????????

Brand:???????????? |?????????????????????? |?????????????????????? |?????????????????????? |?????????????????????? |??????????????????????

You will now plot out the results of the perceived values of the criteria to assess how Nokia compares to its competitors in those areas. We will develop several perceptual maps to understand the situation.

4. Plot the results of the market survey on the perceptual map below for two of the evaluation criteria. Repeat

as necessary with multiple criteria to understand consumer perception as based on different dimensions.

Suggestion: Use Microsoft Excel as plotting tool. Follow plotting guidelines outlined in textbook.

. .

| |????????????????????????????????????????????????????????? |Criteria 2: 10?????????????????????????????????????????????????? ???? |

| ????????????????????????????????????????????????????????? |?????????????????????????????????????????????????????????????????????? ???? |?????

| ????????????????????????????????????????????????????????? |??? ?????????????????????????????????????????????????????????????????? ?????|

|_Criteria 1: 1?????????????????????????????????????? |?????????????????????????????????????????????? | Criteria 1: 10__ |

| ????????????????????????????????????????????????????????? |?????????????????????????????????????????????????????????????????????? ???? |

| ????????????????????????????????????????????????????????? |?????????????????????????????????????????????????????????????????????? ???? |

| ????????????????????????????????????????????????????????? |?????????????????????????????????????????????????????????????????????? ???? |

|.????????????????????????????????????????????????????????? | Criteria 2: 1 ?????????????????????????????????????????????????? ?????|

5. State the ?winning? positioning approach. Define the marketing mix elements Nokia will need to execute to implement your intended approach. For example, how would the product need to change?

Positioning Element ?? ??????????? Results???????????????????????????????????????????????????????????????????????????????????????????????

Positioning: ??????????????? ??????????? Positioning approach

???????????????????????????????????

Product: ????????????????????? ??????????? Unique required features to implement positioning approach

???????????????????????????????????

Price:?????????????????????????????????????? Pricing attributes (high/ low/ bundled/ etc.) to implement???? positioning approach

Distribution: ?????????????????????????? Distribution channels (retail stores, online only, etc.) to implement positioning

Promotion: ???????????????? ??????????? Messaging to communicate positioning approach to target market







? ? ? ? ? ? ? ? ? ? ?


MARKETING ANALYTICS: Case Study Name: ____________________

 

? Stephan Sorger 2013; www.stephansorger.com Date: ________________________

 

Case No. Chapters Case Title

 

Market Segmentation: Perceptual Map of Smartphone Market

 

Background: Your Role

 

You are the head of marketing for U.S. operations at Finnish communications and mobile

 

telephone manufacturer Nokia. Nokia manufactures many basic cellular telephones, but has

 

struggled to win over U.S. customers with their smartphones in the U.S. market. The company

 

has watched Apple and Android devices grasp market share while Nokia?s share dwindles.

 

Background: Mobile Phone Market

 

The mobile phone market is significant. Industry analyst firm IDC estimates a total of 1.832

 

billion units shipped in 2013. This is a 5.5% increase from the 1.736 billion units shipped in

 

2012. IDC predicts a compound annual growth rate (CAGR) of 5.6% from 2013 to 2017. (Ref. 31)

 

(Ref. 3-1) Source: IDC, ?Worldwide Mobile Phone 2013-2017 Forecast and Analysis.? March 2013.

 

http://www.idc.com/getdoc.jsp?containerId=239867 Industry analyst firm Strategy Analytics estimated market share of the mobile handset market, as

 

measured

 

in units shipped, for each of the major vendors for Q2 2013: (Ref. 3-2)

 

-Samsung: 27.7%, up from 25.0% in Q2 2012

 

-Nokia: 15.8%, down from 22.5% in Q2 2012

 

-Apple: 8.1%, up from 7.0% in Q2 2012

 

-LG: 4.6%, up from 3.5% in Q2 2012

 

-ZTE: 4.6%, up from 4.5% in Q2 2012

 

-Others: 39.2%

 

(Ref. 3-2) Source: Strategy Analytics, reported in bgr.com article: Epstein, Zach. ?Sizing up the Mobile Handset

 

Market in Q2.? July 26,

 

2013.

 

http://bgr.com/2013/07/26/mobile-phone-market-share-q2-2013/ But the data shows all mobile phones, not smartphones. Smartphones represent the highest

 

growth category,

 

and account for approximately 51% of all mobile phones sold.

 

Background: Nokia Smartphones in 2012

 

In 2012, Nokia partnered with Microsoft to increase its share of the smartphone market,

 

launching the Nokia

 

Lumia 900 for the U.S. market. The U.S. market has vexed Nokia. ?The big question will be how

 

they tackle

 

the U.S. market, where they have virtually no presence anymore,? said Mark Newman, an

 

industry analyst at Informa Media and Telecoms in London. Microsoft acknowledged that introducing their

 

operating system

 

might not guarantee success. ?We recognize that Windows phone is the challenger in the market

 

against

 

established alternatives,? said Terry Myerson, a vice president of Microsoft?s phone unit. (Ref. 33)

 

(Ref. 3-3) Source: O?Brien, Kevin. ?One Year Later, Nokia and Microsoft Deliver.? New York Times. February 27,

 

2012. http://www.nytimes.com/2012/02/28/technology/one-year-later-nokia-and-microsoft-start-to-deliver.html?

 

pagewanted=all&_r=0 The results were a bit disappointing. According to industry analyst firm Gartner, Nokia sank to

 

7th place in the

 

booming smartphone business in the third quarter of 2012. The company accounted for only

 

4.3% of

 

smartphones. Meanwhile, the Google Android platform market share rose from 52.5% to 72.4%

 

in the same

 

year. Nokia CEO Stephen Elop acknowledged he needs to make up significant ground in order to

 

take on

 

rivals such as Apple, Samsung, and Google. Mr. Elop cited some issues with the retail sales

 

environment,

 

stating, ?Our innovation doesn?t matter at all, if these features aren?t presented well in the retail

 

environment..? (Ref 3-4)

 

(Ref. 3-4) Source: Sandstrom, Gustav and Grundberg, Sven. ?Nokia Slips to Seventh in Smartphone Market.? November 14,

 

2012.

 

http://online.wsj.com/article/SB10001424127887324556304578118360942919142.html

 

Marketing Analytics: Case Studies

 

? Stephan Sorger, 2013; www.StephanSorger.com 2 Background: Nokia Smartphones in 2013

 

In 2013, Nokia introduced the Lumia 1020, a Windows Phone 8 cell phone with a 41 megapixel

 

(MP) camera. Analysts agree that the digital light sensor in the camera is especially sensitive to

 

light. Because of the light sensitivity, photos in low light levels are surprisingly good. Analysts

 

also praise the mini strobe flash, emitting much more light than the light emitting diodes (LEDs)

 

found on most camera phones.

 

On the other hand, the camera in the Lumia 1020 phone suffers from irritating shutter lag and

 

distortion at the outer edges of the frame. Furthermore, the camera uses digital zoom, not optical

 

zoom, causing graininess when shooting zoom shots. The phone is large, measuring 5.1 by 2.8

 

by 0.4 inches. Analysts say it is ?as if you?re holding a DVD box up to your ear.? The lens

 

creates a bulge on the back preventing it from lying flat. The camera software is difficult to use,

 

requiring three separate apps to take photos. Critics also note the lack of availability of thirdparty apps for Windows, such as Pinterest, Gogole Maps, and Instagram. (Ref 3-5)

 

(Ref 3-5) Source: Pogue, David. ?A Camera That Stuns, a Phone That Puzzles.? August 15, 2013.

 

http://www.nytimes.com/2013/08/15/technology/personaltech/lumia-1020-a-great-camera-grafted-to-an-oddballphone.html?

 

pagewanted=all Nokia sold 7.4 million Lumia smartphone devices in Q2 2013, which accounts for approximately

 

3.2% of the 225 million smartphones sold worldwide in Q2 2013. Nokia?s total handset shipment volume fell 27% year over year from 83.7 million in Q2 2012 to 61.1 million in Q2 2013. (Ref 36 and Ref. 3-7)

 

(Ref 3-6) Epstein, Zach. ?Nokia narrows Q2 loss; Lumia sales reach record 7.4M, but U.S. sales slide 17%.? BGR.com. July 18,

 

2013.

 

http://bgr.com/2013/07/18/nokia-earnings-q2-2013/

 

(Ref 3-7). Sharma, Samidha. ?Smartphone sales exceed feature phones in Q2 2013: Gartner.? The Times of India. August 14,

 

2013.

 

http://timesofindia.indiatimes.com/tech/tech-news/hardware/Smartphone-sales-exceed-feature-phones-in-Q2-2013

 

Gartner/articleshow/21823039.cms Background: Smartphone Evaluation Criteria

 

Determined to win back market share, you research the market to discover what consumers

 

really want in a

 

smartphone. You come across an article in technology review firm CNET, which reviews

 

smartphones, among other devices. You note the evaluation criteria they cite: (Ref 3-8)

 

(Ref 3-8): Bennett, Brian. ?How We Test: Cell Phones.? CNET.com. February 5, 2013.

 

http://reviews.cnet.com/how-we-test/cell-phones/ Criteria Category

 

Design and Usability: Detail

 

Physical attributes: size, weight, thickness, materials

 

Screen: Size, resolution, brightness, contrast, color accuracy

 

Button layout Processor Speed: Benchmark tests to test processor speed for smartphones

 

Example: Linpack Battery Life: Benchmark tests to measure battery life duration

 

Wireless radios switched off. Volume and brightness set to 50%

 

Run movie file until battery dies Call Quality: Place calls from controlled indoor office environment

 

Assess volume level, distortion, audio compression

 

Place calls also from noisy environment Data Speeds: Run tests on fastest available network (4G LTE, 3G, etc.)

 

Example: Oookla data speed app for Apple iOS, Android,

 

Windows Speed in megabits per second (Mbps) Overall Speed: Test various operations

 

Examples: Boot time, Total power-up time, Camera boot time

 

Web page rendering time Photo/Video Quality: Test lens, sensor, electronics, as well as any photo apps

 

Examples: Lifelike color, Low light, Fast-moving objects Nokia Positioning

 

You decide to conduct a positioning exercise to increase Nokia?s appeal in the U.S. market. You

 

assemble a team of power users familiar with smartphones, including Apple, Samsung, and other Android units, such as LG. If your team includes a Nokia user, then they will provide their input.

 

If not, you will need to perform an Internet search on user experiences for Nokia.

 

You start by declaring a market segment, hopefully one not already dominated by your

 

competitors. Market segments include groups of users with different needs from smartphones.

 

Example segments include:

 

-Business users

 

-Artists

 

-Students

 

-Military and law enforcement officers (LEOs)

 

-Luxury rich

 

-Technical geeks (who will hotrod the processor by overclocking it and develop apps to boost

 

performance)

 

-Frequent travelers

 

-Frugal

 

-Athletes

 

-Other

 

Because of the vast size of the market, it is suggested to select a primary market segment and one

 

or more secondary market segment(s).

 

1. Record your selected market segment(s)

 

Market Segment

 

Characteristics

 

1.

 

|

 

2.

 

|

 

3.

 

| |

 

|

 

| Next, you consider how your market segments will evaluate smartphones. Your goal is to make

 

Nokia smartphones attractive to one or more market segments. In this exercise, you are allowed

 

to plan changes to existing Nokia models to attract market segments. You will need to identify

 

which evaluation criteria matter the most to your planned market segments.

 

2. From the CNET list of evaluation criteria categories, select the ones which your market

 

segment(s) value.

 

Criterion

 

1.

 

2.

 

3.

 

4.

 

5. Why Criterion Matters

 

|

 

|

 

|

 

|

 

| |

 

|

 

|

 

|

 

| Marketing Analytics: Case Studies

 

You now need to conduct a market survey to assess how each competitor fares in the criteria you

 

selected for the market segments you have chosen. If this were a real market survey, you would

 

send out a survey to many people. For this exercise, simply average out the responses from your

 

team members.

 

3. Conduct a market survey (with your group as the survey population) to gather market

 

perception for the

 

different available brands of smartphones, given the market segments you plan to target. Rate the

 

degree to which each brand performs in each criterion from ?1? (poor) to ?5? (neutral) to ?10?

 

(outstanding).

 

Brand

 

Brand: Nokia

 

Brand:

 

Brand:

 

Brand:

 

Brand: Criterion 1

 

|

 

|

 

|

 

|

 

| Criterion 2

 

|

 

|

 

|

 

|

 

| Criterion 3

 

|

 

|

 

|

 

|

 

| Criterion 4

 

|

 

|

 

|

 

|

 

| Criterion 5

 

|

 

|

 

|

 

|

 

| You will now plot out the results of the perceived values of the criteria to assess how Nokia

 

compares to its competitors in those areas. We will develop several perceptual maps to

 

understand the situation.

 

4. Plot the results of the market survey on the perceptual map below for two of the evaluation

 

criteria. Repeat

 

as necessary with multiple criteria to understand consumer perception as based on different

 

dimensions.

 

Suggestion: Use Microsoft Excel as plotting tool. Follow plotting guidelines outlined in

 

textbook.

 

..

 

||

 

|Criteria 2: 10

 

|

 

|

 

|

 

|

 

|

 

|

 

|

 

|_Criteria 1: 1

 

|

 

| Criteria 1: 10__ |

 

|

 

|

 

|

 

|

 

|

 

|

 

|

 

|

 

|

 

|.

 

| Criteria 2: 1

 

|

 

5. State the ?winning? positioning approach. Define the marketing mix elements Nokia will need

 

to execute to implement your intended approach. For example, how would the product need to

 

change? Positioning Element

 

Positioning: Results

 

Positioning approach Product: Unique required features to implement positioning approach Price: Pricing attributes (high/ low/ bundled/ etc.) to implement

 

positioning approach Distribution: Distribution channels (retail stores, online only, etc.) to implement

 

positioning Promotion: Messaging to communicate positioning approach to target market

 


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