Transcript The Markstrat Challenge I

The Markstrat Challenge I
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Markstrat is a simulation designed to focus on
strategic marketing issues

Understanding customer needs

Long-term perspective

Marketing as a profit center

Competitive environment

Marketing strategy is based on segmentation,
positioning, and resource allocation... marketing mix
decisions are secondary
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The Markstrat
World
Managing
your firm
Getting started
3
The Markstrat World: A large territory with a highly
developed economy
The Markstrat World
Population: 250 million
Currency: Markstrat Dollar ($)
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The basic scenario begins with firms starting in
the same competitive position
5
Each firm can compete in TWO product markets
SONITES

independent

not substitutes

not complements
VODITES
Maximum: 5 brands/firms marketed at a time
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The Sonite market is already developed, each
product having 6 determining product
characteristics
Weight
Kg
10 - 20
Volume
Design
Index
dm3
3 - 10
Max. Frequency
Base Cost
Power
W
kHz
5 - 50
20 - 100
5 - 100
$
min. 10
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Vodites will likely also have 6 main physical
characteristics, but the market is as yet untapped
Autonomy
m
5 -100
Design
Index
3 -10
Max. Frequency
kHz
5 -20
Weight
Kg
10 -100
Diameter
mm
10 -100
Base Cost
$
min. 10
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It is easy to recognize the origin of the brands
from their names
S
I
Product
Type:
Company
marketing
the brand:
S=Sonite
V=Vodite
B
I
Freely chosen
letters or numbers
A, E, I, ...
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Sonite customers have traditionally been
classified into 5 segments……
Singles / Si
Professionals / Pr
Others / Oi
Buffs / Bf
High Earners / Hi
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...whereas initial studies for Vodites have pointed
to a different segmentation scheme
Typical segment size evolution over time
sales
Followers
Early adopters
Innovators
time
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Sonite & Vodite customers have the choice of
purchasing through 3 distinct distribution
channels
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Summary of the Markstrat World Environment
Market Growth
Technology
Economic Environment
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The Markstrat
World
Managing
your firm
Getting started
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Your objective in managing your company is to
maximize your Share Price Index
To do that, you will have to
optimize:

Market share

Sales growth

Net contribution

Cumulative net contribution

R & D investments
….but the main objective is to LEARN!
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You will need to do a certain amount of
analysis, before setting a strategic direction for
your firm
Data
A
P0
P1
P2
P3
Information
B
457
542
650
745
Strategic
Options
C
856
596
587
900
745
789
824
1203
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Market research studies provide market data…
it is up to you to prioritize, digest, and interpret
them

Consumer survey

Industry benchmarking

Consumer panel

Market forecast

Distribution panel

Competitive advertising

Semantic scales

Competitive sales force

Multi-dimensional scaling
(MDS)

Advertising experiment

Sales force experiment

Conjoint analysis
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Once your strategy is clear, you should proceed to
make a number of tactical decisions each year
1)
Production planning
2)
Inventory disposal
3)
Pricing
4)
Mass communication
5)
Sales force & distribution
6)
Market research
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Each firm receives a marketing budget for the
coming period, based on the previous period’s
performance
Advertising expenditures
Budget
Advertising
Advertising research
expenditures
for each
brand
Operating cost
Sales force
Hiring & training cost
Firing cost
R&D
Development budget
Market
Research
Sonite and Vodite
study costs
for each
project
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Brand results
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Company performance
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The simulation starts at the end of the initial period,
the new management (you!) making decisions for
the next period
START
MSPH
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The decisions for the first period are limited in
scope, so that your team can familiarize itself with
Markstrat

Gather information

Do not make any major changes in your firm's operation

Do not introduce new brands, modify or withdraw
existing ones

Do not start R&D projects

Do not give perceptual objectives for advertising
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Organize yourselves and manage the group
process
Time
pressure
Information
overload
Conflicting
opinions
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The Markstrat
World
Managing
your firm
Getting started
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When you return to your team room,
the Main Menu will be on your screen
Click here to open
a session &
access the
decisions screen
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Within the Decision Screen, you will start making
decisions for the coming period
Click here to
make Production,
Price &
Advertising
decisions
The
decisions
you
will
make
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Decisions on production, price and advertising
should be entered for each brand
Switch from
Sonites to
Vodites
You are
making
decisions for
the brand
SAMA
Switch from
one brand to
the other
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The sales force is organized by channel type to
better meet the specific needs of the channels
Click on the
assistant to help
you allocate to
sales forces
automatically
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Buying market research studies will help you
make sound decisions
The cost of
each study
appears as
you make your
selections
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You can monitor the status of your decisions at
any time
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Don't forget to transfer your decisions to your
instructor by closing the session
You can close
your session by
clicking on
Interface/Close
Markstrat
Session
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On your marks, get set, GO!
Give a name to your company
Respect the deadlines
Good luck!
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