Day 6
Explorers
(Ex) Highly interested in sonite products, demand high performance products, and are quite price sensitive, less concerned with product convenience
High Earners
(Hi) High income level, demand performance and convenience, and purchase expensive products
Professionals
(Pr) Personal and professional usage, look for high quality, high performance and easy to use products, and can afford expensive products
Savers
(Sa) Cautious in the way they spend their money, demand cheap, low performance, average convenience products, and future growth rate could exceed forecasts
Shoppers
(Sh) Good product knowledge through extensive product comparison, demand high quality price ratio, and are quite price sensitive
If you are holding a high level of inventory, you can set the production plan to...
0
to reposition a brand how much should you spend on ads
10-15% of total budget
Actual production levels are automatically adjusted in response to actual demand by plus or minus...
20%
How many customer segments are in the vodite market?
3
How many competitors fight in each market?
4-5
To increase or maintain awareness how much should you spend on ads
4-8% of total budget
What is the population makeup?
40% urban, 25% smaller urban, 35% rural
How many customer segments are in the sonite market?
5
You can market in up to ____ brands in each category at a given time
5
What is the minimum R&D investment for a vodite product?
5 to 10 million
How many people live in the markstrat world?
80 million
What is the MarkStrat world territory like?
A large territory with a highly developed economy
Your marketing budget is used each period to invest in
Advertising, sales force, and market research
The maximum number of Sonite brands a firm can market at any given time is: A. 3 B. 4 C. 5 D. 6 or more
C. 5
A company named Most would be what company marketing the brand and what product category
Company M and Sonites
Estimating Lost Sales
Comparing purchase intentions with market shares at the end of the period can give you a feel for how many sales you have lost
What report is a must buy?
Consumer survey & consumer panel
The two industries in MarkStrat include Sonites and: A. Modites B. Bodites C. Codites D. Vodites
D. Vodites
Market Research Studies
Each firm receives a marketing budget for the coming period. This budget amount is based on the previous period's performance
What are 5 Sonite Customer segments
Explorers, Professionals, shoppers, high earners, and savers
T or F: There are 4 distribution channels available: specialty stores, mass merchandisers, online stores and direct sales force
F
Online Stores
Includes web only merchants and retailers websites, low but significant percentage of sales are done on the web, high convenience as consumers shop from home, almost unlimited choice and easy comparison, and likely to become more important in the next 5 to 10 years
Characteristics of Sonite and Vodite industries
Independent, Not substitute, not complement
What are the three vodite customer segments?
Innovators, early adopters, and Followers
Followers
Largest group at the end; below average income
The product MOST is manufactured by firm
M
What tactical decisions should be made each year?
Marketing Mix, Commercial Team, and Market Research
Three advertising decisions:
Media budget, research budget, and segmentation strategy
Are any major political, social or economic events anticipated in the near future?
No
Where can you access all decisions?
On the decision home
Mass Merchandisers
Operate on a low price, high volume basis, lower level of service than in specialty stores, depth of product lines usually restricted to a few units, distribute the cheaper, low performance products
Early Adopters
Opinion leaders and critical to the adoption process; larger than innovators group; average income
Market Research
Ordering industry wide market studies and ordering market specific market studies
Sonite brands have existed for several years, each characterized by what 5 attributes?
Processing power, display size, design, battery life, number of features, and base unit cost
What are some situations a team may fin themselves starting in?
Product specification, target consumers, brand awareness levels, market share, distribution coverage, profitability, R&D expertise...
Marketing Mix
Production planning, price, and advertising and segmentation strategy
Order the 5 sonite customer segments by quality sensitivity (highest to lowest)
Professionals High earners Explorers Shoppers Savers
Sales Lost to Competitors formula
Purchase Intentions - Market Shares
Vodite brands will be characterized by what 5 main attributes?
Resolution, energy efficiency, carbon footprint, connectivity, application programs, and base unit cost
Order the 5 sonite customer segments by price sensitivity (highest to lowest)
Savers, shoppers, explorers, professionals, high earners
Commercial Team
Size of commercial team, allocation across distribution channels, and allocation across marketed brands
Specialty stores
Small stores not necessarily organized in chains, Located close to their customers and providing a high level of service and technical support, broad product line including high end products
The two industries in Markstrat include:
Sonites and Vodites
Sonite and Vodite Customers purchase through what three distinct distribution channels?
Specialty stores, mass merchandisers, and online stores
Choosing a name
Start with its initial (M,R,S,T,or L) and it can be up to 8 characters with 1 word
Innovators
The first users of vodite products; above average income
What must production plans take into account?
The potential sales for the brand, the existing inventory at the beginning of the period, and the flexibility of the production department
What is your objective in MarkStrat?
To maximize your share price index, optimize: market share, sales growth, net contribution each period, and R&D Investments, and LEARN
What is an real country example of a Markstrat like world?
USA
Your role for the next 8 years:
Work in a highly competitive market, Target consumer segments and position your products, Interface with R&D to design and develop new products, Launch new products and improve existing ones, Interface with the production department, make marketing mix decisions, decide on the size and priorities of your commercial team, and order market research studies to get up-to-date information for decision making
Are inflation and GNP growth stable?
Yes
Can production plans be increased or decreased without any penalty from one period to the next?
Yes
Is there both a hiring and firing cost?
Yes
What industry will you start in?
You will start with two brands in the sonnet market and no vodite brands. You must decide if you will invest to launch vodite brand or get another sonnet brand
How is the base cost determined?
based on the levels of the 5 attributes you choose for a new product
All firms start in a _______ but _________ situation
different;balanced
Advertising decisions must be made ______ period for ______ of your marketed brands
each
What will you be responsible for in Markstrat?
formulating and implementing the long term marketing strategy of your division
segmentation strategy
indicate which consumers should be targeted
What information does the consumer survey and consumer panel report contain?
market share and purchase intention information. If you don't buy it you don't know whether you did well or not.
What information does Market Research Consumer panel provide?
market shares
Do any vodite brands exist in the beginning?
no
Brand prices must be set _____ a year
once
How many production plans must be submitted?
one must be submitted each period for each brand
What information does Market Research Consumer Survey provide?
purchase intentions
Who will you be competing with?
several other firms to market two types of durable goods to consumers
All firms will have to engage what to develop their first Vodite product?
substantial R&D resources
The first letter of a company name indicates
the company marketing the brand: M, R, S, T, or L
The base cost is...
the cost at which each unit will be produced, based on initial production
Recommended retail price
the list price for consumers
When setting brand prices, you should take into account...
the margin of the distributors, the discounts made by mass merchandisers and online stores, and competitive prices
Commercial Team cost is proportional to
the number of allocated people
selling price
the price at which you sell your product to distributors
The second letter of a company name indicates
the product category: O for Sonites and E for Vodites
What are you deciding with commercial team decisions?
the size of your commercial team for each channel and brand
Research buget
to improve the quality/persuasive power of the message.
What is your new position in MarkStrat?
to manage the marketing department of the Electronics division of a large corporation
Media Budget
to purchase media space and time
What is the currency?
Markstrat Dollar
