Compete A Dynamic Marketing Simulation

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Compete A Dynamic Marketing Simulation
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• One Industry Consumer Electronics Industry.
• Five firms operating in this industry.
• Three separate geographic markets All
  operations are different in each of these markets
  (e.g., production, price, promotions, etc.).

3
Three Geographic Markets

• Northern division 38
• Southern division 34
• Western division 28
• Lifestyles and demographic info. Given.
• Population trends different.

4
Three Products

• Total Spectrum TV - approx. retail price 7500.
• - end of
  Introductory Stage.
• Comp. Video Editor - approx. retail price 750.
• -
  Introductory Stage.
• Safe shot laser Below 90 and expected to fall
• further.
• - peak of growth
  stage.
• - intense
  competition.
• Regional and seasonal sales difference (built
  into forecasts).

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Strategy

• First establish company objectves in terms of
  marketshare, profits etc. (earnings per share
  EPS).
• Basic marketing strategy starting with
  positioning and how this would effect price,
  advertising, production.

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Decisions - Production

• Production Forecasts can be purchased.
• - Last period sales are
  known.
• If excess units 5 inventory carrying
  cost, based on cost
• price.
• - cannot be shipped
  to other regions
• If underordering (out-of-stock) some
  overtime production.
• - 50 of stockout
  position or 20 of that periods
• order quantity.
  
• - 15 more cost
  for this.

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Decisions - Price

• Cost Price
• TST - 3400
• CVE- 350
• SSL - 39
• - can be reduced if RD money spent on cost
  reduction.
• - could go higher with quality improvements.
• Manufacturer Sales Price you have to decide.
• - last period 4500, 450,
  54.
• Retail Sales Price - margins of 40 for all
  products.
• - last period -
  7500, 750, 90.

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Decisions Sales Force.

• Currently 90 sales people
• North - 35
• South- 30
• West - 25
• - You decide size, salary, time allocation
  and commission for sales
• people.
• - Last period 4000 salary and 1.5
  commission.
• - Transfer, new hires, 12,000 (training
  expenses). effective after one quarter.
• - Fire and attrition 12,000 (severance pay)
  attrition reported in print out.
• Sales managers 1 for every 15 salespeople.
• - currently two
  in each region.
• - increased at
  the mid-point of 15 more e.g., 38, 53, 68
• - 40,000 salary
  per quarter.

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Decisions Promotions.

• Broadcast, Print and Sales Promotions.
• - You have to allocate
  resources between media.
• - Broadcast reach large
  groups, short message,
• cost effective.
• - Print Detailed info.,
  less cost effective.
• - Sales Promotions
  Provides differentiation in
• mature markets.
• Content 1) Price low price.
• 2) Quality high quality.
• 3) Product
  Characteristics.
• 4) User patterns/Benefits.
• 5) Distribution/Maintenance
  /Service.

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Decisions R D.

• R D Expenditures.
• - decide on amount
• and allocation to lowering cost
  or
• increasing quality.
• - Printout gives new quality
  indices
• and cost prices. If you subscribe
  to
• the industry association it also
• gives you a comparison to
  industry
• averages.

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The End.