MKTG 380- Markstrat 2

New product name setup

'P' for project. The second letter identifies the type of product being developed ('S' for Sonite, 'V' for Vodite), the last three characters can be freely chosen by the firm.

This is a two-dimensional map whose axes are scaled from _________ and represent composite dimensions.

-20 to +20

What 2 things cause obsolete inventory

1. Brand modification 2. Brand withdrawl

Identifying and anticipating market evolution (4)

1. Changing segment 2. New target segment 3. Cometitor entry 4. Pressure on margins

3 Customer Needs

1. Economy 2. Performance 3. Convenience

5 Positioning Factors

1. Market needs 2. Competitive brands 3. Fesible range 4. Development budget (battery life....design...number of features...display size....process power)

For each project the following information is given:

1. Name, Physical characteristics, 2. Base cost (current and minimum realistic), 3.Cumulative expenditures 4. Additional budget required for completion (if the project has been successfully completed, the availability is indicated).

4 Steps of R and D Internal Process

1. Name, Physical characteristics, Base cost (current and minimum realistic), Cumulative expenditures (total expenditures made on each project up to 2.If necessary, the desired based cost is adjusted automatically 3.The budget required to develop the project is calculated 4.If the allocated budget is sufficient, the project is developed

2 factors associated with R and D

1. Positioning 2. Economic

Budget required for R and D completion

1. R and D experience 2. Physical characteristics 3. Requested base cost

5 Economic factors

1. Target margin 2. Cost of other projects 3. Development budget 4. Impact of physical characteristics (Base cost)

The base cost of a new project might be lower than the base cost for the first _______of the current product but higher than the ____________achieved by experience effect.

100,000 units current transfer cost

What is the maximum Sonite and Vodite projects applied over the simulation.

30 each

How many R&D projects may be specified in a given period for each of the two markets (5 Sonite and 5 Vodite projects),

5

The HIGHER the requested characteristic the HIGHER the base cost & development budget

All other physical characteristics: processing power, display size, no. of features, ...

R & D Feasibility Study

Alternatively, you can get estimates of minimum base cost and total budget required for completion of a given R&D project by requesting a feasibility study for $100,000. Although feasibility studies require time, since the information is not available before the end of the period during which it is requested, the information provided is very accurate and not over-estimated.

The LOWER the requested characteristic the HIGHER the base cost & development budget

Carbon footprint

The maximum number of brands marketed by a company in a given period is limited to

Five brands per market (Sonite or Vodite)

Consequently, a loss of (________) of transfer cost is taken on the obsolete inventory. This loss will appear as a ______for inventory disposal in the next period company results.

Newsletter cost

Consumers make purchase decisions based on their

Perception of your brands

Old Marketing Mix decisions (Round 1)

Production planning, Pricing, Communication & segmentation strategy

2 R and D Messages

Project Available Insufficient Budget

New Marketing Mix decisions (Round 2)

Selling Perceptual Objectives

Remove a new brand

The 'undo' button in the brand portfolio screen can be used to remove a new brand added to the portfolio with the 'Introduce new brand' button. Just select the brand and click on the 'undo' button, the new brand is removed from the 'marketed brands' list.

Withdrawing a brand

The 'withdraw' option removes a brand which was marketed in the previous period from the market for the following period.

Multiple brands with same physical characteristics

The same product can be marketed under different names. This could occur in competitive situations where the presence of multiple brands could build barriers to the entry of new brands by competitors. This situation could also occur when the same basic product is to be distributed under different brand names to different segments which may be willing to pay different prices.

Positioning with advertising

Use ideal point and plot in excel

The higher the advertising research budget, the more

accurate one may expect the repositioning to be in terms of reaching the perceptual objectives, although there will naturally remain a limit to how far and how fast one can move perceptions

Repositioning can be achieved by

advertising and/or by R&D

R&D On-line query

communicate with the R&D department at a greater frequency than the simulated year. The R&D will respond immediately to such a query with the estimated minimum base cost and with an estimate of the budget required to complete such a project These quick estimates include an over-estimation factor to cover any possible surprise they may encounter if the project is implemented.

Cost reduction projects should be weighed against

experience curve effects

For the semantic scales, the range is

from 1 to 7.

Experience curve

he company's unit cost of manufacturing fell by about 25% for each doubling of the volume that it produced. This relationship they called the experience curve: the more experience a firm has in producing a particular product, the lower are its costs

A project requested from the R&D department is _________before the beginning of the following period.

never available for commercialization

One basis for analyzing the positioning of each competitive brand is the ________ based on the multidimensional scaling study. The data are obtained through interviews with a sample of ____individuals.

perceptual mapping of similarities and preferences 200

To convey the right message to the market, set

perceptual objectives for each brand

The R&D department also operates as a

profit center

Open the ________ page to modify a project

project overview

A brand which was marketed in the past and withdrawn from the market may not be

re-introduced later in the simulation.

It decreases with the

specification levels of the weight, diameter, and volume.

The unit cost increases with the

specification on design, maximum frequency, power, and autonomy.

One simple way to specify a base cost in an R&D project is

to start with the price that consumers in the targeted segment are willing to pay for that product.

(Brand modification or withdrawal) obsolete stocks are sold to a ______ at a price corresponding to a given percentage of the __________(the exact percentage will be found each period in the _______).

trading company transfer cost Newsletter

For both Sonites and Vodites, the base cost figure (6th characteristic) represents the _______corresponding to the average unit production cost of manufacturing the first ________of the new product

transfer cost 100,000 units

The strategic issues surrounding market segmentation and product positioning can be summarized in three questions:

1. Which segment do we want to target? 2. How do we design the product appropriate for this segment and position it effectively? 3. As the environment changes, how should we reposition our existing brands? (Segment, position, reposition)

R and D can be told to do two things

1. develop specific products 2. improve exisiting

Transfer cost valuation (3)

1. older stocks will be sold first, according to the FIFO method, 2. the transfer price of each unit will be calculated according to the production cost of the product at the time it was manufactured, 3. adjusted for inflation