2022/5/21 晚上9:02
Our Initial Stategy | The Markstrat Diaries
Our Initial Stategy
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Our beginning strategy involved looking at the market to see who we should target with our two
products: TOPS and TONES. We decided to purchase all the market research studies during the first
period so that we can make well-informed decisions and to give us a competitive advantage over
other teams in the industry. However, we quickly learned there were only a few studies that we used
and found to be important.
Namely, these studies were:
–
Industry Benchmark
–
Semantic Scales
–
Multidimensional Scaling
–
Market Forecast
–
Competitive Intelligence (Competitive Commercial Team)
The studies that we did not buy had information that we were able to draw from the yearly industry
reports, or from some other study, or they were simply not useful.
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2022/5/21 晚上9:02
Our Initial Stategy | The Markstrat Diaries
Our initial strategy involved us putting as much money as possible into advertising as we believed
this would help put our products in the mind of the consumers. This strategy was quickly scrapped
for one that focused on research and development (R&D) and moving more money to build on a
good commercial team. Our commercial teams numbers were based off the Competitive Commercial
Team studies, aiming to match the top team in the industry in order to stay competitive while
minimizing costs.
Going into period 3 is when we finally decided on which segments our two products would target;
this would remain constant for the remainder of the simulation. TOPS would be tailored to the
professional market, while TONES were targeted towards shoppers. We wanted a foot in the higher
end, more profitable professionals, while also having a cheaper product in the large market of
shoppers.
In terms of production, we utilised the market forecast and consumer survey (purchase intentions)
coupled with our team’s personal forecast of the percentage of the market we believe we will capture.
Our aim was to reduce inventory costs, while taking care not to run out of stock.
An important part of our strategy is to make products that would fit our target segment. Our focus
was on using R&D to improve our product characteristics accordingly. We used brand perceptions
and consumers’ ideal values (from the Semantic Scales), then translated them onto the appropriate
characteristic scales in order to produce the ideal product. This resulted in us holding the top share of
the shopper segment starting from period 5 till period 10. The professional market was a lot harder to
attain, but because we were well versed in how R&D should properly be carried out, we ended up
capturing the highest share of the segment from period 6 onwards.
Pricing
We decided to lower the price of TONES from $250 to $229 so that it would match closer to the
shopper’s ideal economy location on the multidimensional scaling map. We were successful in
moving closer to our target location however we noticed that lowering the price did not necessarily
affect the pricing aspect of the semantic scale. Utilizing the perceptual objectives in advertising to
change pricing perceptions were more effective.
On the other hand with TOPS, we wanted to be priced more competitively so we lowered the price
from $500 to $475 to position TOPS closer with the professional’s ideal economic location. Since we
were earning a fairly decent profit margin of 60% for each TOPS sold, we decided not to increase the
price since we were afraid that doing so would lose some of our current customers as that is what
happened to another competing team. However later in period 7, we were given advice from Stone
Street Investments to increase our price by 5% which became $504. The base cost remained relatively
the same at 40% and our market share for professionals was not greatly affected.
As for TEEREX, we priced it at $999 in period 9 which is much lower than the competing brand,
REAPER which was priced at $1350. We initially designed our Vodite to target the adopters. As a
last effort to increase our SPI in period 9, we took a huge risk as we thought that by competitively
pricing our product, we could potentially capture the followers segment instead. Our launch was not
as effective as we hoped it would be as TEEREX only captured 24% of purchase intentions of the
whole market, which was much lower than originally anticipated.
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