MMBA 6530 Week 1, Lecture 3 - 1
SLIDE 1
Let's talk about the actual objectives for a marketplace and you're going to see these
objectives repeated frequently now as we go through the rest of the term because these are
concrete learning objectives. They're application oriented objectives as you learn to use the
marketing concepts that you're learning.
SLIDE 2
The objectives for today are to be able to explain the basic scenario of the simulation, and to
describe the basic operation of it. It also means that you'll be able to start making decisions
about resource allocation. You've already purchased a little bit of market research. You will
continue to do that in the future. You will also be purchasing advertising, hiring a sales
force, designing new products. You're going to be making a lot of decisions related to
resource allocation.
You will complete a situation analysis -in other words, analyzing the 5-C's. You're going to
continue on a weekly basis evaluating that situation. In other words, what are the
opportunities and threats? What are your internal strengths and weaknesses and how do they
fold together to manage the business.
You'll be evaluating market segments and choosing targets. You'll discover very quickly that
you don't have the resources to fully support products for all market segments.
SLIDE 3
One of the crucial learning's in marketing is this idea of target marketing - that you focus all
of your resources on one or two segments and really do a bang-up job there.
Then you'll also be analyzing alternative courses of marketing action. You have resources how are you going to spend them? Are you going to spend them on advertising, or
promotion, or designing new products.
One of the things that you will find that you must do is to analyze what the cost of the
specific action would be and then what your pay-back may be as a result of doing that.
You're going to be allocating scarce resources among the marketing tools - tools like
advertising and rebates, and sales promotion.
In addition, you're going to be describing the elements and purpose of the balance score card.
The balance score card is a concept that you read about for today. You also will find that we
use a slightly different of the balance score card, but it is a form to understand how the
different elements of the score card come together to help manage the business.
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MMBA 6530 Week 1, Lecture 3 - 2
SLIDE 4
Let's talk a little bit about simulations. Simulations are really powerful because they give
you a chance to actually practice what you're learning and then get immediate feedback as to
whether or not the things you're trying work or not. You'll learn about all aspects of
marketing because you're going to be managing a marketing department. You're going to be
making the same kinds of decisions that marketing managers make every day.
The marketplace scenario actually follows the lifecycle of a new product. You're actually
stepping back in time to the- to the kick-off of the personal computer industry as it launches
into the personal computer market. So, marketing decisions are going to be introduced as
they become relevant in the evolution of the product.
SLIDE 5
Benefits from using a simulation include things like this. You're going to develop, learn to
develop team work across various marketing functions. Within any organization, there are
people who are more focused on sales, others who are more focused on finance, others who
are more focused on advertising and brand management. And, it's absolutely crucial to havein order to have a successful product launch, to have a successful company that you be able
to work across those various functions to work together as a team.
Another benefit of doing a simulation is that you really start to see how marketing decisions
are interconnected and that you need to manage them as a whole. If you make a pricing
decision - for example, if you decide to take a price down, well then you're not going to have
as much money to spend on promotion and sales. And, so that's going to have an impact on
your business.
This also, the simulation in general helps you to learn marketing concepts and principals and
ways of thinking. It just gives you a chance to try some of the things that we're talking about.
SLIDE 6
You'll get a lot of - a lot of experience doing marketing planning and execution skills. And,
you're going to discover just like the PC industry itself, the high tech world - is that it's a
rapidly changing environment. Nothing stays the same from one quarter to the next.
Another key benefit of doing this is that instills bottom line focus while at the same time
helping you understand the need to deliver customer value. How so? Well, without the
bottom line focus, you're going to run out of money at some point and your business will just
die. At the same time, if you have such a tight bottom line focus that all you're focusing on is
how much money we're making, it's real easy to forget who's calling the shots here and it's
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MMBA 6530 Week 1, Lecture 3 - 3
really the customer who needs to be calling the shots.
To develop - to deliver customer value, what it is that customers want, requires that you keep
one eye on both of those constantly.
And, then finally, to crystallize the financial implications of marketing decisions by linking
them to cash flows and bottom line performance.
The very first session, we talked about the fact that every organization needs three functions.
It's kind of like a three-legged stool and the business falls apart if you don't have all three.
You have to have operations, you have to have finance, you have to have marketing. And the
three work together in order to make a successful business.
SLIDE 7
You really start to discover how important it is to use market data. You're going to have
actually more market data than you can manage and you're going to be a little frustrated
because you wonder what are the things that are important, what are the things that I should
focus on.
I remember when I started in marketing myself and asking my boss a question kind of like
that because I had 10 reports on my desk and I didn't even know which ones I should keep
and file. And, unfortunately, he wasn't much help when I asked him that question. He said,
"Well, read them all and sooner or later, you'll start to learn which ones are important for
your business and which ones aren't."
So, it's important to use market data. Making decisions by shooting from the hip is a real
quick way to run through your budget and have your entire business gone. So, it's important
to use the market data to make decisions; and then also to use competitive signals in order to
adjust the strategic plan and more tightly focus business tactics.
Competitive signals - what does that mean? Well, your competitors are going o be doing
things and you're going to be reading things into what it is they do. And, based on that,
you're going to be trying to figure out what it is they're doing because in companies that fail,
it's typically the cause is a lack of understanding of what's going on with the customers or the
competition or both. So, it means you always have to keep one eye out for the competition as
well.
And, then finally, by doing decisions - you're going to be making eight quarterly decisions,
so you're going to be running the business for two years - and this will give you some
marketing confidence in terms of the knowledge that you're going to gain and the overall
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MMBA 6530 Week 1, Lecture 3 - 4
experience from it.
SLIDE 8
Something to understand about this simulation is that it's wonderfully realistic. When I
played the simulation myself for the first time, I remember laughing with the people that I
was playing with - going, "This is like so real world." This is like so real world and you're
going to discover the same thing.
You're going to be designing brands. You're going to be designing advertisements. You're
going to have to schedule when it is you use those advertisements. You're going to be setting
prices, you're going to be hiring and training sales people. And, above all else, you're going
to worry about profits.
Every single quarter, you're going to look at the profits and go - Oh, goodness, what's going
on here and what can we do to make it better.
SLIDE 9
It's also very organized. The simulation follows the logical process of starting up a whole
new product line and you're going to launch one product into the market, and then another,
and another. You're going to be focusing on one target segment and then maybe a second;
and launching individual products for each of those so that you have a full product line for
each of your market segments.
The simulation guides you very carefully through the decision making process. There are
very clear instructions at every step of the way. In addition, the simulation has fabulous help
files. They call it Professor Help. In an essence, it's really a manual. And one of the nice
things about having an online manual is that you can do a search on that manual for anything
that you want to find. So, if you want to a search on pricing and how to think about pricing
decisions, you just hit control-F and type in 'pricing' and then step your way through the
document and it will talk all about- it will bring back all of the pricing related information in
there. So, I love having an electronic manual because it's really easy to search.
So, this is an organized simulation.
SLIDE 10
So, this page is what the very first page of the simulation looks like. And you've already
been here. But just to make sure that we're covering all the bases, it's available on the
Internet and the details about getting there are in your online classroom.
SLIDE 11
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MMBA 6530 Week 1, Lecture 3 - 5
The task list that's off to the left for every decision will lead you through each step. And, as
you click on each one of those steps in the task list, it will tell you what are the basic
decisions you need to make in that step' what's involved in making those decisions; and some
of the things that you should be considering in terms of analysis.
SLIDE 12
At the same time, there's a link in the very quarter that talks about how to use marketplace. If
you haven't gone back and read the directions, it might be a good idea to do that at this point.
I know, I know - nobody likes to read directions, right? But, just do it for me. Step back,
read the directions. You might find something that you missed that will help save you as you
go forward.
SLIDE 13
So, continuing on. Let's say that you start a company and you named it "Traveler
Computers." Now you've already named your company because you've already made the
first quarter decisions.
So, let's continue on from there.
SLIDE 14
You work for a large international electronics firm and headquarters has decided now that
they want to get into the PC business. But, you're going to need to step back to when that
industry was in its infancy and you're going to have to think about how you're going to
manage your business as more and more competitors come in to serve the needs of the
various market segments that are out there.
SLIDE 15
You've actually been selected to head up the division, you and your team. And you're going
to be selling these computers into Asia and North America and Western Europe. But, of
course, there are going to be a number of other international firms coming in at the same
time. So, this will add the element of competition to your- to your experience and will be a
key learning for you as you go forward.
SLIDE 16
At the very beginning, you're going to be getting $500,000 four times from headquarters.
They're going to invest $2 million in your business. So, you're going to have $500,000 to
spend in the first quarter and you've already bought some market research with that.
In the second quarter, you'll get 500,000; in the third and in the fourth. And, then based on
your business review and your marketing plan, corporate headquarters may give you another
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MMBA 6530 Week 1, Lecture 3 - 6
$5 million if it approves your marketing plan for the second year. So, dig in and understand
your business and put together some plans for year two that will really clarify how you would
use $5 million if you had it to spend.
SLIDE 17
You're going to be focusing your marketing strategy on direct sales to business customers.
So, this is not a business to consumer scenario. This is a business to business scenario. Now,
you're going to be selling to your business customers through company owned sales offices
in major markets around the world - major metropolitan areas around the world.
SLIDE 18
And you'll have five market segments that you will be looking at. Notice that they're set up
on a scale of performance versus price. And Mercedes - at the top right - is the market
segment that is the most demanding. They want performance above all else. In fact, in the
first two or three or four quarters, you don't even have the kind of technologies that Mercedes
wants.
So, be a little careful about launching anything to Mercedes before you really have the
technology that they're going to want and demand of you. But at the same time while they're
so demanding and performance oriented, they're not very price sensitive. So, they'll pay
more for this product. So, design what they want. Design the Cadillac for them and then
charge them for the Cadillac.
The next group is the innovators and they're satisfied with a little less performance but they
still basically want a high performance machine. And, they are still fairly insensitive to
price. It's something to think about.
Travelers are looking - are a little bit more price sensitive but they still want high
performance, but they want different kinds of performance than do Innovators and Mercedes.
And you're going to have an enormous amount of market data to tell you what it is that these
different groups want.
The Work Horse - that's the biggest group. The big circle means that that's the biggest group
in terms of quantity of people in that market. So, they have the most people in the market - at
the same time, they're kind of price sensitive and they accept lower levels of performance in
terms of processor speed, for example; but there are some very specific that they want to be
able to do.
And, finally the Cost Cutter is looking for a basic system. They're very price sensitive.
More than anything else, they want something very simple that's going to do exactly what
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MMBA 6530 Week 1, Lecture 3 - 7
they want it to do and nothing else. These people don't want bells and whistles. So, if you
design bells and whistles and they add any cost at all to your product, then they're not going
to buy you.
So, that's an overview of your market segments.
SLIDE 19
Now, each market segment has its own set of needs and you can see right on the screen itself
that you can look at these customer needs through you market research data. And something
that's interesting when you look at this particular slide is that the thing that's most important
to this particular group of people - and this is Travelers - is the thing that they want more
than anything is that they be able to link with other computers. The index score there is 126.
So, with 100 being average things that they kind of want and anything below 100 being
things they really don't have much interest in; things above 100 are the things that are really
important to them.
And so what you want to focus on above all else are the things that are most important to
them. Now, when we get further into strategy and talk about differentiation and positioning,
this is extremely important because it's absolutely crucial that you understand what your
customer wants, what your customer is looking for and then how you can deliver that to them
better or differently than the competition.
So, the most important element for them is that you'd be able to link with other computers.
Now they still want it to be easy to use. That's still over 100 - those important things to
them. But, remember, when you're designing products - start with the things that are most
important to them.
SLIDE 20
Now at the very beginning, you're going to start with one segment. And, as the game
progresses, you're going to select a second segment you may wind up selling products to
three or four segments of the course of the simulation - but I would caution you here because
the balance scorecard really only takes into account your primary and your secondary targets.
Why is that?
Because it's really important that you learn to focus. You're reading Jeffrey Moore's book on
"Crossing the Chasm" and he talks about the importance of focusing on one or two markets
and absolutely dominating those before you think about moving on to others. This is a key
issue in terms of doing the marketplace simulation as well.
SLIDE 21
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MMBA 6530 Week 1, Lecture 3 - 8
Once you've selected a segment, then you have to design a product that meets their needs.
We've already talked about what their needs are and what the index scores are and you've
selected which segment you want to focus on. Now you have the opportunity to design a
brand that will meet those needs.
As you can see, you will put the brand name in and then you will identify which components
you want to incorporate. You'll also notice that each one of those has a material cost
associated with it. You're going to design a product that meets the needs of the segment that
you can also afford to sell at the price point that would be of interest to them.
When you look at this page, what are the things that would be more attractive to the Traveler
segment? Clearly, a color flat screen for a portable computer would certainly be something
that would be of interest to the Traveler.
SLIDE 22
Once you've designed the brand - this is the retail price; any rebate you want to offer - you've
probably all signed up for a rebate at some point - means that if the customer sends a proof of
purchase back to you that you will send them some part of the cost of that item back.
You also will place a sales priority on it. Sales people are just like everybody else - they
focus on what are the top priorities. On any given day, you have to decide what is the thing
that I have to focus on above all else. When you're working with a sales force, you also have
to tell them what the top priority is. You can change this as time goes by. For example,
when you launch a new product, you probably want to make it top priority; but then as it
becomes more accepted in the market place and you have another new product that you want
to offer, you may want to change it to a second priority and put first priority onto the new
one.
You can also decide whether or not you're going to be putting a display in one of those
company owned stores.
SLIDE 23
Then you're also going to be developing ads. Remember that different target segments find
different things to be interesting based on their needs and what kinds of ads appeal to them.
What you're going to do is find out what are the things that are most important to them and
then you're going to rank those in terms of importance.
If you look over to the right, you can chose brand and in this case, we've decided we're going
to develop a brand for a product called Suprema. Then when you think about Suprema and
who the target is for Suprema, then you decide what is it you're going to talk about in your
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MMBA 6530 Week 1, Lecture 3 - 9
ads. The number one importance that's mentioned here is the brand name.
The second of importance is the highest rated brand for the Cost Cutter segment - so I'm
guessing that this ad is for Cost Cutters.
The third one they mentioned is that it's the lowest price in town. Part of your charge as you
go through the market place simulation is to figure out what those things are that are most
appealing to your target. How do you design ads that are most appealing to your target?
You'll get a chance to test a couple of different ads. In fact, every good marketer is running a
couple of little tests every single quarter. When you start launching into market in a big way
in Quarter 5, remember - don't forget to keep on testing some little things here and there
because they'll help you as move forward.
SLIDE 24
As the quarters progress, you're going to want to expand in terms of size. The markets that
you're in will become saturated. You're going to need to get into new markets, new horizons.
Part of what is important is to determine which are going to be the more attractive
geographical markets for you to enter in addition to the ones that you just started out in.
SLIDE 25
Each quarter when you make decisions, you will come to a link that says "Final Check."
And, basically what happens here is that the system itself acts like an independent auditor
and it goes through and it double-checks your decisions. It may come back to you and say You forgot to do this. Or - Gee, those two things seem to be pretty inconsistent with each
other, are you sure you want to do that?
It will give you a double-check to help you prevent some of the most common mistakes.
You're also going to find within the actual discussion of each decision that it recommends
that you do certain things and it recommends that you not do certain things. These are not
hard and fast rules, but most of these recommendations are in there because they discovered
that teams that ignore those recommendations don't do as well over the long-term as teams
that do. Just be aware of the comments that come in throughout the simulation about things
that you might want to do or might not want to do. Those are there to help you.
You make a final check and then you wrap up your decision.
SLIDE 26
Right after process, you will be able to get into the performance report and see how well you
did in that previous quarter. It will give you complete information in terms of your sales
information, your expenses, and your profits.
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MMBA 6530 Week 1, Lecture 3 - 10
SLIDE 27
You could also then see your market share and you'll be able to see by segment - for
example, Traveler and Mercedes in this example - what your total market share is for each of
those particular segments.
SLIDE 28
In addition, the market research will show you how satisfied each of those segments is with
your designs and competitors designs.
This particular table is one of the most important tables you can find.
First of all, if you look to the left, all the different companies are listed and all the different
brands. You can see that the Cost Cutter is the first one, the first column. If you just click on
the Cost Cutter link at the top, it will rank the products in terms of which one has the highest
brand judgment all the way to which one has the lowest.
Brand judgment means that a customer is really satisfied with your product; that is designed
in a way that meet their needs. Remember - be careful here. It's not what you think they
might like. It's what they say in the data. This is a double-edged sword because you're going
to find data that's going to insist that you interpret how that translates to various attributes.
It's not going to tell you directly what they want. You need to use your powers of logic in
comparing your scores with your competitor's scores to figure out what it is exactly that's
important to each customer group.
Something else you should look at is that this very first one across the top - Emerald - has a
25 brand judgment in North America. That is absolutely awful. If you have a brand
judgment that low, discontinue the product and don't spend anymore money on it. You have
to have a minimum of 70 to be even considered by consumers or by your customers.
At the same time, the higher you get in brand judgment, the better you do. And your sales
will actually skyrocket with every point that you get above 90, your sales will crank up faster
than you can imagine. Similarly, they will just sit there and do nothing if you're under 70 in
most cases.
Be very aware of the importance of brand judgment.
SLIDE 29
If the brand isn't going very well - let's say you have a 25, well if you have a 25, don't even
try to go there. Look for something that's your highest one and try to improve on that one.
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MMBA 6530 Week 1, Lecture 3 - 11
Or, design something new from the ground up.
What you can do here - thin the brand design task list, there is a design brand section where
you can compare two different products. You can compare one of yours with a competitor
product and look at the various attributes that are there and see what their brand judgment is
and what your brand judgment is. Then see which attributes they have and which attributes
you have. You're going to have to do some reasoning to figure out which ones are the
attributes that are related to the higher brand judgment. Then you can redesign your brand
and launch it back into the market.
SLIDE 30
You also get a profit analysis for each brand and this is really, really important.
You'll be able to see that some brands are more profitable than others. There's going to be a
balance that you're going to have to consider. You'll have a brand that has a very high profit
per unit but it's focused on a fairly small market segment. Let's say you could make a million
dollars with that particular segment, with that particular highly priced item.
On the other hand, you might have another one that has a very low per unit profit. But, if
you have a huge market like the Work Horse and you could sell millions of them, you could
still make a million dollars. A part of the trade-off that you're going to have to think about is
the profit per unit and the size of the market segment itself.
Anytime your profit per unit is getting very low, you really need to think about either doing
cost improvement projects on that product or perhaps even discontinuing it and launching a
new one into the market.
SLIDE 31
Your final score is actually calculated based on the balance score card. This is a slightly
different version of the balance score card that you've found in the reading. A balance score
card by definition is always pulled together by the management of the company. It's
developed to meet their own particular needs.
Financial performance is basically looking at your profit as a percent of sales. Your market
performance is looking at your market shares in your top two market segments.
SLIDE 32
Marketing effectiveness is really an important score. It's looking at your customer
satisfaction score - in other words, brand judgment. It's also looking at your advertising
score or advertising judgment. Again, it's in your two target segments. You need to be
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MMBA 6530 Week 1, Lecture 3 - 12
thinking in terms of getting those brand judgment and advertising judgment scores up as high
as you can.
Then it also looks at your unit sales per salesperson. One of the things that's easy to make a
mistake with in market place is to hire all sorts of sales people for a particular market. Then
when you compare the sales versus another market, you'll see that your unit sales per
salesperson are much lower.
Once again, it's all about balancing your resources and managing your resources in a very
effective way.
The balance score card is also looking at your investments in the future. This is stuff like
spending on new sales offices and research and development as a percent of sales as you're
going forward. If you're not investing in the future, your overall balance score card is going
to be much lower, so you need to be thinking about that.
Finally, creating of wealth - after all, you have stockholders here. Are you creating wealth
for your company. Remember the company invested $2 million in your first four quarters
and up to $5 million dollars for your second year. How much profit are you making
compared to that investment?
SLIDE 33
The final score for the balance score card will be a single number and that actually combines
all of those factors and it's the Quarter 8 results that will be used to compute your actual
grade for market place performance.
SLIDE 34
Each quarter, you're going to be able to see your balance score card. Just go to "Performance
Report" in Quarter 3 and scroll on down to where it says "Balance Score Card" and it will
show you your total business performance and how you're doing in each one of those.
There is also a very good discussion in Professor Help about how this is calculated.
SLIDE 35
This one looks at a balance score card for a later quarter and you can see that for Quarter 5,
it's now right up there high in your task list. This is a big hint to you - you need to be looking
at this on a regular basis.
You also need to figure out what are the things that push these individual scores up. If you're
thinking about reverse engineering the program for the simulation, by all means, do it. That's
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MMBA 6530 Week 1, Lecture 3 - 13
what this is all about - how can you figure out what makes this tick.
The simulation is based on real world market place behavior and if you can figure out how
this ticks and drive your sales and profits ever higher, you will be in great shape when it
comes to the end of simulation.
SLIDE 36
You can compare your scores against the industry standards - in other words, against the
other competitors in your industry. You should be doing this on a fairly regular basis as a
part of your competitive analysis. You'll be able to see how you're performing compared to
your competitors - and this will allow you to look for areas of weakness or areas of strength
in your competition that you could then respond to in the market place.
SLIDE 37
The objective here is to profitably capture a dominant position. Remember I mentioned that
earlier - that you want to get into a particular market segment and dominate it because once
you dominate one segment, then you have cash flow coming in and you can go to the next
segment that those folks talk to. And it makes it a lot easier to move into the next market.
SLIDE 38
There are a number of different ways to manage your team in terms of who has what
responsibilities. The key thing is that you talk amongst you as to what works for you.
You may also find after a couple of quarters that maybe the one you decided upon isn't really
working for you. Then you need to shift around a little bit to figure out what's the optimum
team structure for you to move forward.
Do remember that all of you are always responsible for marketing research and profit
management. You can't just leave that to one person because those are the things that you
have to be constantly focused on - the customer and the profits.
SLIDE 39
At the beginning of each quarter, you're going to get information on the current situation.
You've already discovered this. The current situation is evaluated. You're going to evaluate
the situation. You're going to formulate strategy. You're going to decide upon your tactics.
And, then you're going to make the decisions.
SLIDE 40
You feed those into the simulator and then all of your competitors' information is coming in
at the same time and you'll get the results back typically in an hour or less from the time of
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MMBA 6530 Week 1, Lecture 3 - 14
the actual running of decision.
SLIDE 41
What is the chronology of events? I told you that you're going to be running eight quarters.
In other words, you're running this business for two years.
In the first quarter, you've already made these decisions. You've organized your team; you've
given a name to your company; and you have signed a contract for some market research of
potential customers.
Research is cheap in the bigger scheme of things, so don't forget to get research.
In Quarter 2, which is your next decision, you're going to be analyzing the information
you've received; you're going to be setting up your strategic direction and setting up shop.
And, you're also going to be designing brands and sales offices for test market.
The Quarters 2, 3, and 4 are basically test market; so don't go whole-hog at things at this
point. Just sit back and try to understand what are the levers, what are the things that affect
your business.
Something else you get to do in Quarter 2 is to talk about your personal goals and your team
norms and this is really important that you as a team analyze and discuss these things before
you go very far - it will head off some problems in the long term.
SLIDE 42
In Quarter 3, you're really heavily into test market at this point. You've got a couple of
brands in the market. You may have a couple of brands for each segment in the market.
You'll have prices that you're trying out. You're trying out different kinds of ad copy, you're
trying out different types of media campaigns and sales staffing. But, the key thing here is
that this is a test - you're running lots of experiments.
In Quarter 4, you're going to study the results of those tests and your financial performance
and start making some adjustments in strategy.
SLIDE 43
After you have run Quarter 4, you're going to be developing a business review on your
business for the first year. This means you're doing a full situation analysis; or in market
place, what they call the "market opportunity analysis." You're digging in to really
understand what's going on in the business. You're trying to understand customers; and
you're trying to understand competition, primarily. Those are the two that you focus on in
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MMBA 6530 Week 1, Lecture 3 - 15
market place.
At the same time, you're trying to understand your own company and how your company is
performing. By doing those, you can do an opportunities and issues analysis. What are the
external opportunities, what's going on with customers, what are the external threats, is there
a competitor that's lurking behind you in a particular market place. What are your own
strengths and weaknesses relative to those threats and opportunities?
Once you've completed the business review and the opportunities and issues analysis, then
you can actually develop a marketing plan for Year 2. You're going to be presenting it,
you're going to be submitting a marketing plan to corporate headquarters and you're going to
get approval to go forward. If it's completely approved, you'll get an extra $5 million to
spend.
Remember when you do that marketing plan, it will be very important to specify for
corporate headquarters what you would do with that $5 million if we were to give it to you.
SLIDE 44
In Quarters 6 through 8, you're going to be managing your business on a quarter by quarter
basis. You're going to be introducing some new brands, you're going to be continuing your
market expansion, you're going to be studying the market and financial data to figure out
how to do things better. You're going to be reacting to competition.
And, that's the last decision that you make. Quarter 8 is your final decision in terms of the
simulation.
SLIDE 45
Stepping back again, what were objectives? You need to be able to explain the basic
scenario of the market place simulation and the basic operation of it. And, I'm sure you're all
comfortable with that by now.
You're going to be making decisions about resource allocation. So, you're going to be
purchasing market research but you're also going to be figuring out how much money to
spend on R&D, how much money to spend on promotion and rebates and pricing. All of
those decisions are going to be coming at you from all directions - and that's one of the things
that makes marketing really fun. It's kind of like three-dimensional tick, tack, toe. You get
lots of balls up in the air, and you're trying to manage everything at once.
You're going to analyze the information. In the situation analysis, you are able to evaluate
opportunities, threats, strengths, and weaknesses. You're going to look at different market
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MMBA 6530 Week 1, Lecture 3 - 16
segments and decide which of those is more attractive for my business, for our company.
Then you're going to choose a target and perhaps a secondary target.
SLIDE 46
You're going to analyze alternative courses of action. You could look at your choice of are
we going to launch into Asia, or are we going to launch into Europe. What would be your
potential sales and profits in each case? Then decide which one you're going to do. So,
you're constantly allocating scarce resources and you should be able by now to describe the
elements and purpose of the balance score card.
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