What NOT to do in MarkStrat

1. What NOT to do in MarkStrat Meena Saggi � President Beth Walicki � Leader, Marketing Team Jeff Skuba � Leader, Management Science

2. Strategy Large market share Low price, high volume Target un-captured consumers

3. Our Products

6. Decision Period 1

7. Decision Period 1 SAMA Increased price: $260 to $265 (+20%) Increased production: 150k to 180k (+1.9%) Largest Targeted Segments: Pros, High Earners Advertising: $1,440K

8. Decision Period 1 SALT Reduced price: $335 to $297 (-11.3%) Decreased production: 120k to 100k (-16.7%) 35,000 units sold to trading company Loss of $777,000 Largest Targeted Segments: Pros, High Earners Advertising: $2,400K

9. Decision Period 1 Sales Force and Distribution Specialty Department Mass Salespeople 10 35 15 SAMA 50 35 40 SALT 50 65 60

10. Period 2 Results

11. Period 2 Decisions Raised Sonite selling price by $1.00 to $188. Spent less money on advertising Spent less on Marketing and Research

12. Period 3 Results Stock price dropped dramatically Firm A has worst stock price Retail sales down 28.2% Stock 1,002 to 794.Stock 1,002 to 794.

13. Period 3 Decisions Prices stayed the same Advertising Budget dropped by 75% Introduce VAJU (vodite market)

14. Period 4 Results Stock still on a downward path Sold off 100,000 units of SAMA (at a loss of $1,010K) Realize there is not enough money to launch vodite yet. Stock at $598Stock at $598

15. Period 4 Decisions Did not sell as much to trading company this period Kept advertising price the same Never used dimension & objectives through these periods

16. Market Penetration Vodite Product launch Competition: VELL & VYFU Timing Quality Market Research

17. Product Sales Comparison (Vodite)

18. Budget Improper allocation and planning led to budgetary constraints Adverse financial impact caused by failure of Sonite products Discontinued both SAMA and SALT last period Consequently lost $1,248K Our stock price fell dramatically

19. Stock Price Comparison (period 5) Period 4= 535 Now =326Period 4= 535 Now =326

20. New Strategy Fewer products keep one product in each brand Concentrate on product quality vs. quantity Higher profits Produce best product in the industry Concentrate on brand loyal customers

21. Implementation Concentrate on new products Double advertisement budget Focus on closest market range Buffs for sonite Innovators for vodite

22. Company Performance (period 6) Improvement in stock price and market share Volume sales increased by 56.7% for SAHV Market Sharer increased by .6% Volume sales increased by 202% for VANU Market Share increased by 4.2%

23. Strengths & Weaknesses Everyone devoted to keep the company running Market oriented company Exit strategy Limited resources Lack of Industry experience

24. Where did we go wrong? Shelved the products instead of giving them away to liquidators Created similar products i.e. SAME was a remake of SAMA Lack of formalized management review process Human and Typing error for setting budget for R&D in Period 2-3

25. Future Plans Our primary responsibility is to the financial well being of the company and its shareholders. Our short term goal is to concentrate on increasing the stock price We plan on selling the company to one of the competitors in the Industry

26. Questions????