Welcome to NewShoes!
The Marketing Principles Simulation
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NewShoes Overview
Experiential learning that drives home
the basic process of marketing planning:
 Design of a simple marketing plan
 Use of basic marketing research
 Experience dynamic competition
 Learn about group decision-making
 Understand financial implications
 Get comfortable with ambiguity
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NewShoes Content
A computer-based competitive simulation
of the athletic shoe industry…
Focusing on the four Ps of marketing:
• Product
• Price
• Promotion
• Place
You play the role of the Marketing Management Team
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NewShoes Competition
Multiple competitors all starting from the
same equal position
 Selling in home and domestic regions
 No inherent advantages of one firm
over another at start
 Learn about competition through
market research
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NewShoes Setting
Multiple markets with different dynamics
and needs:
• Three regions:
 Home
 Domestic
 Foreign*
• Plus contract bids for store
brand*
*instructor selected options which are
typically introduced during the event
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Starting Position (All Teams)
Performance
improved from
Period -1 to 0, but
your team faces
major challenges
as you take
charge at the
beginning of
Period 1.
Revenue
Home Sales
Domestic Sales
Special Income
Total Revenue
Period 0
$7,436,000
$11,736,000
$0
$19,172,000
Period -1
$9,180,000
$0
Cost of Goods Sold
Total Cost of Goods 198K units X $40.00 COG/unit
Gross Margin
$7,920,000
$11,252,000
$6,384,180
$2,795,820
Expenses
Advertising
Consumer Promotions
Personal Selling
Dealer Promotion
Product Development
Market Research
Start-up
Special Expenses
Total Expenses
$3,500,000
$4,000,000
$1,120,000
$2,200,000
$900,000
$0
$750,000
$0
$12,470,000
$1,000,000
$2,000,000
$400,000
$1,000,000
$800,000
$0
$0
$0
$5,200,000
Net Profit
-$1,218,000
-$2,404,180
67.6K units X $110.00 price
130.4K units X $90.00 price
$9,180,000
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Market Research
Insights about competitors’ decisions
plus customer satisfaction
 3 levels of detail* by variable / region:
• Industry averages ($10K per item)
• Range + averages ($10K per item)
• Detail by firm ($25K per item)
 Weigh cost vs. value of information
 Some free information in Market:
Industry News
*report detail level is an instructor selected option
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Financial
Make sure to consider the financial
implications of decisions
 Cost of marketing expenditures vs. the
impact on sales / profitability
 No budget constraints, but limited
marginal value on expenditures
 Impact of experience curve on COG
• Net impact of B2B/contract bid sales
• Long- vs. short-term orientation
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Financial
For example, what are the implications of decreasing
unit cost due to the experience curve?
Cumulative Production Units (000,000s)
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Decisions
Regional decisions
•Price
•Consumer Advertising
•Consumer Sales Promotion
•Personal Selling (# salespeople)
•Dealer Sales Promotion
•What market research to purchase
Corporate decisions
•Product Development
•Contract Bid (price)
•Group Organization
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Tools
Multiple tools and reports to assist your
decision process
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Income Statement
Market Share
Return on Sales
Breakeven Analysis
Cost of Goods Calculator
Bid Analysis
Response Functions Estimation
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Assignments
Multiple assignments to reinforce concepts
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Strategic Plan (and revision)
Forecasting
Brand Name Formulation
Advertising Development
Use of Market Research
New Product Development
Philosophy Toward Risk
Team Decision-Making
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Marketing Planning
Decision-Making Process
NewShoes
• Analyze current situation
Company reports and
marketing research
• Problems and opportunities
Distill information into
meaningful insights.
• Generate alternatives
Marketing implications
Anticipate competition
Financial implications
• Decision
Group consensus by
deadline. Simulation is
advanced.
• Monitor results
See new results and begin
again for next period . . .
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Performance Measures
 Profit
 Return on Sales
 Market Share
 Customer Satisfaction
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Things to Keep in Mind
• Marketing planning is a process
• Marketing is about numbers and skill (understanding
complex research studies, financial implications,
forecasting, etc.)
• Discover market drivers for each region
• Think long-term
• Don’t underestimate importance of teamwork and
organization
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Balanced Scorecard
1. Cumulative Net Profit (in millions of $) – 25%
2. Cumulative Revenue (in millions of $) – 25%
3. Cumulative Unit Sales (in units) – 25%
4. Share of Revenue (in %) – 25%
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