SALES MIX

1. SALES MIX This simulation challenges your ability to make business decisions affecting the sales for several periods. The group is divided into teams, each of which form a sales and marketing team. You will be responsible for selling two products into two sales areas. To keep all then numbers manageable, all prices, costs and profits are measured in a universal currency - the Account Unit (AU)

2. The Products The products that you sell are imaginatively called Product A and Product B Product A is well established but has considerable competition. It has been sold at 20 AUs per unit. Product B is new but has few competitors. It should sell for between 25 and 30 AUs/unit Both products sell to the same types of customer but for different use. A B

3. THE SALES AREAS The two sales areas are called Area 1 & Area 2. Currently, you only sell into Area 1 but are about the enter Area 2. Both areas are believed to be similar in terms of potential and mix of customers. Promotion for Area 1 is currently 40,000 AUs

4. COSTS Product A costs 13 AUs. Product B costs 16 AUs Fixed Overheads are 20,000 AUs each period Promotion is decided by you for each area separately. AUs

5. USING THE COMPUTER • Enter team name (up to six letters) • Enter decisions • price for each product • promotion for each area • Period Results • Unit Sales for each product, area and totals • Sales Revenue for each product, area and totals • Income Statement for period and cumulatively • Unit Sales Forecast for next period • Go away to review, think and make next decisions.

6. ROLES & TASKS Product Managers • authority to set prices for the products • responsible for unit sales volumes Sales Managers • authority to set promotion expenditures • responsible for area revenues Marketing Manager • co-ordination of the team • responsible for profit

7. OBJECTIVES Discover how to successfully set prices and promotion to meet your goals. Work as a team. Have fun!