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BRANDMAPS

BRANDMAPS. Spring 2000 Competitive Marketing Strategy. Why simulation?. Adult learning principle #1 Adults learn best by doing (not by listening, seeing, or by reading). Non-destructive and low risk exercise Time compression Widely varying environmental conditions can be presented.

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BRANDMAPS

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  1. BRANDMAPS Spring 2000 Competitive Marketing Strategy

  2. Why simulation? • Adult learning principle #1 • Adults learn best by doing (not by listening, seeing, or by reading). • Non-destructive and low risk exercise • Time compression • Widely varying environmental conditions can be presented

  3. How realistic is the simulation to real life? • Quite realistic, but not perfect • Need to adhere to some rules • Underlying models based on academic research • Some experimentation is possible

  4. Overview • Competitive team-based marketing exercise • Real competition • Process market feedback and learn • Prepare marketing strategy and plan • Implement and control direction • Vaporware product sold through dealers

  5. Management decisions • Product design and positioning • Product line management • multiple brands • multiple markets • Pricing • Communications • advertising and promotions • sales force • Research and development • Production

  6. Decisions • Extensive market research reports available • Choose which reports to order • Order special research • Need to balance broad strategies and trends and market/financial analysis and details

  7. Inputs • Advertising - budget, media content, media mix • Dealer rebate • Price • Order market research • Plant capacity • Product formulation • Production (units) • Promotion budget and type • Research and development • Sales force management - commission, salary, size, allocation

  8. Outputs • Firm wide performance • Debt-equity ratio • Market share • Net income • Operating efficiency • Return on assets • Return on investment • Revenue • Sales volume

  9. Outputs • Product specific performance • Brand quality rating • brand satisfaction ratings • Customer awareness • Dealer availability • dealer promotion • Product preference • Revenue, sales volume and net income • perception of products • share

  10. Logistics • Every Friday : • Teams to submit decisions on a floppy to Sharon (responsibility of team captain) • Every Saturday (in class) • Teams to receive previous quarters financial and marketing research results • Review and analysis of results

  11. Themes you will learn • Interrelationship between strategy and tactics • Need to plan - at a detailed level • Coordination of marketing programs and operations capabilities • Importance of positioning and product design • Balancing all marketing mix • competitive and market analysis • Information management

  12. Objective • To win the Competitive Marketing Strategy game: • Market Share • Profits • New product launch success • New market development success • By Design, not Luck !

  13. Product Category • Vaporware - durable, capital good • Used in industry and consumer settings • Mature category • Five raw materials: • Syntech (1-99%) Compatibility:1-9 pt scale • Plumbo (1-99%) • Glomp (1-99%) + • Trimicro (1-99%) • Fralange (5) Warranty : 1-9 pt scale • Typical Product specification • 40/6/14/15/5/5/5 • S+P+G+T should be between 70 and 195.

  14. Competitive conditions • Six firms competing in the industry. • All firms start with identical products and financial positions. • Four markets open at the current time. Each market may have different needs. • In future, more markets may be opened.

  15. Every firm may have 3 brands - or formulations • Start with 4 markets. Later can go upto 6 markets.

  16. Market Demand • There is seasonality. Winter (quarter #1) has low demand by 20-30% relative to the summer quarter. • Demand is a function of the population, GNP, and competitor’s actions. • Customers tradeoff product design characteristics, price, and product quality. • Customers perceptions and beliefs about the brands influence their choice.

  17. Markets • Four markets • Study their market research reports to understand the demographic profile of the markets. • Common currency • Use information in the simulation - “Europe” may not resemble European markets in real life.

  18. Law • Anti-trust and anti competitive behavior is illegal. • No price fixing. • No discussion of company strategies with competitors.

  19. Patent laws • Closeness = sum of absolute difference between attributes (7) of two products • Closeness should be greater than 7. • If a firm bids more and gets a reformulation, it has a patent zone of 25. Other products should be farther. Each quarter the patent zone will decrease by 3 till it reaches 7.

  20. One reformulation per quarter • Costs - $500,000 for minor (1-5 pts) and $2.5 million for major reformulation (>5 pts) • Can submit 3 formulations each quarter. • Bid high to get first priority.

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