Markstrat Handbook

Market Research Studies Allotted

23 per period

Transfer Cost

Base cost of underlying R&D - productivity gains

Net Earnings

CAM - market research studies - R&D - interest paid - ECP

Contribution After Marketing (CAM)

CBM- advertising media- advertising research- commercial team costs

Inventory Costs

Inventory holding cost + inventory disposal loss

R&D KPI's

R&D expenses, number of completed R&D projects

Distribution Channels- Amount per Type

Specialty Stores- 10,000 Mass Merchandisers- 6,000 (6 different chains) Online Stores- 1,000

New Projects

a project that has been created in the current decision period. can be deleted if you change your mind

Advertising Research Budget

about the creative work, media selection, and other activities conducted by advertising agencies that improve the quality and persuasive power of the message (reposition a brand), average of 4%

Competitive Advertising

advertising budgets are given by firm, by brand, and by consumer segment

Objectives of Advertising

build awareness for brand names, make consumers familiar with the characteristics and price, develop demand for the whole market, influence the decision of distributors to carry the product

Vodite Customers- Followers

bulk of potential customers, perceive more risk, adopt product only after a large number of consumers, below average income

Advertising Share of Voice

calculated by dividing you own advertising budget by the industry total. a share of voice greater than competitors is required for a successful brand launch or repositioning

Sonite Customers- Savers

cautious in the way they spend, largest segment composed of multiple sub-groups, want cheap, low performance products with average convenience

Modifying or Withdrawing and Existing Brand

click on its name in the summary form, select modify or withdraw option depending on what you want to do

Undoing a Brand Portfolio Operation

click on the name of the brand involved, and click undo to clear this operation from your decisions. Launched brands will disappear from your portfolio and all decisions will be deleted.

Industry Benchmarking

compiles general information from annual reports about each competitor. includes sales, production costs, marketing expenditures, and other expenses, including R&D

Minimum Base Cost

depends on the projects technical specifications, the ore sophisticated, the higher the minimum will be

Project Development Budget

depends on the requested physical characteristics, the experience of the firm with comparable products, and base cost requested. can be obtained using feasibility studies and online queries

Marketing Budget Amount

equal to 40% of the net contribution generated in the previous period. will be between 7 and 20 million dollars, adjusted for inflation. Unused budget will not be carried over to the next period

Estimated Communication Dimensions and Message Quality

estimate of the divisions that have been used by all brands in their communication, as well as an estimate of the message quality, which is a function of the level of advertising research budget allocated to a brand

Exceptional Cost or Profit (ECP)

exceptional items such as brand withdrawal costs

Sonite Customers- Shoppers

good knowledge of marketed brands, do extensive product comparison, want high quality to price ratio, prefer average levels of performance and convenience, price-sensitive

Sonite Customers- High Earners

high incomes, buy fairly expensive products motivated by social status, demand performance and convenience

Sonite Customers- Explorers

high level of interest in sonite products, extremely knowledgable about sonite technology, first to use sonite products, demand high performance products, price-sensitive

Repositioning with Advertising

identify desired position on the perceptual map or semantic scales, enter the coordinates identified, allocate an advertising media budget for the brand, indicate how you want to allocate your advertising budget across consumer segments

Repositioning through R&D

identify the desired position on the perceptual map or semantic scales, estimate the physical characteristics that correspond to desired position, develop and R&D project with these physical characteristics, introduce a new brand or modify an existing one

Recommended Retail Price

list price for customers, dumping is forbidden so retail price must be higher than its transfer cost

Brand Management Chart

lists the brands that were marketed during the period, including those launched during the period. shows advertising media and research budgets, segmentation strategy, and communication objectives

Market Research Studies Chart

lists the studies that you have ordered

Loan Characterization

loans are granted at the beginning of the year, so interest is incurred in year one. Principal is not reimbursed until after year one so it can be paid using the outcome of the investment

Revenues

number of units sold x average selling price

Cost of Goods Sold

number of units sold x unit transfer cost

When are units produced charged to the marketing department?

only when they are shipped to distributors to be sold to consumers

Market Report

provides market shares, volume sold, and retail sales of all marketed brands, as well as the physical characteristics, base cost, and price

Advertising and Commercial Team Experiments

provides the results of advertising and commercial team experiments that are conducted in a regional test market during the simulated period

Financial Report

provides you with revenues, costs, and profit information at the company, market, and brand levels

Vodite Characteristics

resolution, energy efficiency, carbon footprint, connectivity, application programs

Selling Price

retail price - distributors margin

Contribution Before Marketing (CBM)

revenues - COGS - inventory costs

Errors & Warnings Tool

shows a list of errors and warnings generated by the simulation upon analysis of your decision

Scorecard

shows the evolution of key performance indicators in finance, marketing, production, R&D, and distribution

Distribution Channels- Specialty Stores

small and not necessarily part of an organized chain, geographically close to consumers, provide high level of service and tech support, likely to be preferred distribution for vodite products

Do the Distribution Channels Respect Retail Price?

specialty stores tend to, but mass merchandisers (equal to 10% discount) and online stores (equal to 5% discount) use promotions or special offers

Consumer Panel

study based on a group of over 500 consumers whose buying behavior is believed to represent the entire market. provides market share by consumer segment as well as industry sales

Industry Dashboard

summary of KPI's at firm and at brand levels, including stock market data, retail sales and market shares, revenues, and contribution

Launched Brand

this brand is a new one that will be marketed for the first time next period

Gross National Product

trends in the Markstrat economy, has been growing at a rate of 4%

Segmentation and Positioning Strategy

which market segments will be targeted and how products will be positioned

Ideal Values

asked to indicate their preferred or ideal value on each scale

Brand Perceptions

asked to rate each scale from 1-7 according to the way they perceive the brand

Importance of Characterisitcs

asked to rate the importance of each characteristic in their purchasing decision on a scale from 1-10

Inflation Rate

average rate of 2%

Reasons Why Brands are not Always Ideally Positioned

changing segment needs, price pressure, new target segments, competitor entry

Marketing Plan Tool

checks the consistency of your decisions and easily anticipates their financial consequences. helps to estimate revenues, expenditures, and contribution for the period

Price Decisions

price entered is the recommended retail price or list price (the price paid by customers). must be given in dollars

Sonite Characteristics

processing power, display size, design index, battery life, features

Actual Production Level Adjustments

production level is automatically adjusted in response to actual demand within 20%

Production KPI's

volume sold, volume produced, units in inventory, inventory costs, estimates of lost sales due to production shortage

Distribution Channels- Online Stores

web-only merchants, small percentage of electronic sales online, convenience is the key advantage, allows for comparison of features and price, likely to become more important in the next 5-10 years

Product Portfolio Strategy

which brands the company will develop and market

Vodite Customers- Early Adopters

will not adopt vodites as quickly as innovators but will do so before a majority of others, influence on other customers is high, opinion leaders, helpful in advertising, average income

Completed Project

created in a past period and sufficient budget was allocated to it. may be used for new portfolio operations

Uncompleted Projects

created in a past period and the R&D department could not complete it because the budget was not sufficient. may be continued or shelved

Production Decision Factors

potential sales for the brand, existing inventory at beginning of period, flexibility of the production department

Consumer Survey

questionnaire administered to 3000 people during the period. Provides brand awareness, purchase intentions, and shopping habit data for each consumer segment

Company Dashboard

similar to industry dashboard, provides KPI's specific to your brands such as stock market data, market shares, revenues, and contribution

Financial KPI's

total revenues, revenues in each market, revenues from new brands, total contribution after marketing, CAM generated by each market, CAM generated by new brands, net contribution

Continued Projects

uncompleted project that has a budget allocated to it in the current period. may be shelved in a later period

Research & Development Report

provides information on all R&D projects launched in previous periods

Production Report

provides information on the number of units produced, the number of units in inventory, and the production costs

Decision Report

recalls decisions that your team made at the beginning of the current period: brand management, commercial team management, R&D projects, and market research studies purchased

Ideal Value Evolution

monitors the evolution of consumer needs over time

Average Selling Price

price at which you sell your product to distributors, varies by distribution channel

Ideal Points

represent the needs of consumers in a given segment. calculated by averaging the individual responses of all respondents

Modified Brand

this brand will be based on a new R&D project as of the decision period. It means that a different product will be marketed under this brand name

Introducing a New Brand

choose the launch a new brand button corresponding to the market in which you want to introduce the brand.

Advertising Experiment

conducted by increasing advertising budgets in a selected regional market. results are used to project the level of awareness and the market share that would have been achieved nationwide by each brand with the same increase in advertising

Competitive Commercial Team

estimates the size of competitive commercial teams by firm, brand, and channel, and how the teams are allocated to brands and channels

Vodite Customers- Innovators

first users of vodites, adventurous, willing to try new ideas, largest initially but only represents a small percentage of total customers, above average income

Inventory Disposal Loss

loss incurred when selling inventory to a trading company because of a product upgrade. units in inventory x unit transfer cost x inventory disposal cost in % (given in market news report)

Distribution Channels- Mass Merchandisers

low-price, high volume basis, level of service offered is lower, depth of product line limited, tend to distribute the cheaper low performance products, lack of tech support, prevented from distributing vodites in earlier years

Advertising Decisions

must be entered in thousands of dollars, indicated the total advertising budget from the previous period. You must indicate how you want to allocate your budget across consumer segments. percentages must equal 100%

Production Decisions

must be entered in units, form indicates how many units were sold last period and how many units are in inventory

Performance Measurements

net contribution generated, brand market shares, ability to grow revenues, quality of R&D projects successfully completed, **share price index**

Maintained Brand

no brand portfolio has been conducted on this brand. you will market the same product as in the previous period

Graphs Section

over 50 graphs can be plotted, organized into five categories: market, performance, benchmarking, and brand charts

Distribution KPI's

overall distribution coverage, distribution costs, estimates of lost sales due to insufficient commercial efforts

Three Areas of Marketing Strategy

product portfolio strategy, segmentation and positioning strategy, marketing mix strategy

Characteristics included in the R&D Report

project name, available since, physical characteristics, current and minimum base costs, platform of brand, cumulative and required allocated budgets

Shelved Projects

project that has stopped having a budget allocated to it. may be continued in a later period

Brand Maps

provide a graphical representation of ideal values and brand perceptions on two periods at a time

Tools Section

provides a charting tool as well as other decision-support tools that may become available at a later stage.

Multidimensional Scaling of Brand Similarities and Preferences

provides a joint space configuration obtained with non metric multidimensional scaling, relies on similarity and preference data on the complete set of brands available

Feedback From Your Coach

provides a list of feedback messages generated by the simulation based on your firm and brands situations

Contribution Formula

revenues - R&D - production - advertising - commercial - market research

Conjoint Analysis

technique used to develop an understanding of the attributes that guide consumer preferences by having consumers compare product preferences across varying levels of evaluative criteria and expected utility

Perceptual Objectives Decisions

allow you to reposition the brand. If you want to raise awareness, select no objectives. Otherwise you should specify your objectives in terms of semantic scales or multidimensional scales. objectives can be set on one or two dimensions.

Transfer Cost

price paid by marketing to production, incorporates all costs associated with this high level of flexibility, including depreciation and fixed costs. increases with inflation and decrease over time due to experience and economies of scale

Distribution Panel

provides continuous tracking of product sales, gathered from scanning cash registers. provides market share based on units sold by channel for each brand

Semantic Scales

provides data based on a semantic differential questionnaire given to 600 people. Provides brand perceptions, ideal value along each scale, ideal value evolution, brand maps and ship between attributes and perceptions

Budget Tool

provides details on how you have decided to spend your marketing budget in the upcoming period. shows loans or budget increases, calculates expenditures in the four main cost categories, and deviation from budget

Competitive Advertising and Commercial Team Estimates

provides estimates of the advertising and commercial budgets spent by the companies in each market during the period

Market Forecast

provides estimates of the expected market size in one period and in five periods. results are given for the whole market and are broken down by consumer segment

Withdrawn Brand

this brand will no longer be marketed as of the beginning of the decision period

Marketing KPI's

total market share, market share in each market, number of marketed brands, number of brands leading in a segment

Inventory Holding Costs

units in inventory x unit transfer costs x inventory holding cost in % (given in market news report)

Sonite Customers- Professionals

use sonite products for personal and professional reasons, looking for high quality, high performance, and easy to use products, view price as an indication of quality

Advertising Media Budget

used to purchase media space and time (increase or maintain awareness)

Objective in Markstrat

maximize the Share Price Index (SPI) of your division

Commercial Team Experiment

set up by increasing the size of the commercial team in each channel in a selected regional market. results are used to project the additional number of of distributors and the market share that would have been achieved nationwide by each brand with the same increase

Commercial Team Chart

shows how many full time equivalent people you have allocated to each brand and each distribution channel

Industry Information

shows the evolution of economic variables such as inflation and GNP growth, and provides the costs for the next period of items such as market research, commercial people, holding units in inventory, and inventory disposal

R&D Projects Chart

shows the projects that you have initiated or continued in the period in a format similar to the one of the R&D report

Base Cost

unit cost that was decided when the project was developed by R&D