MARKETING STRATEGY GAME
FREE WINNING GUIDES AND TIPS
Part 3
THE BEST FREE MARKSTRAT GUIDE WITH HELPFUL TIPS TO WIN MARKSTRAT 2024 [MARKSTRAT 2025]
1
StratX Simulation - Markstrat 7 - Top 10 Tips to WIN MARKSTRAT - Round 1
https://www.youtube.com/watch?v=QNo9cQhxOos
2
StratX Simulation - Markstrat 7 - Top 10 Tips to WIN MARKSTRAT - Round 2
https://www.youtube.com/watch?v=5ulGfSbA5wI
3
The Best Markstrat Guide with Helpful Markstrat Tips to Win Markstrat 2022
4
THE BEST MARKSTRAT GUIDE WITH HELPFUL MARKSTRAT TIPS TO WIN MARKSTRAT 2022 - MARKETING STRATEGY GAME FREE WINNING GUIDES AND TIPS - PART ⅓
https://markstrat2019.blogspot.com/
5
Marketing Strategy Simulation Game – FREE Winning Guides and Tips [update for Markstrat 2023 and Markstrat 2024]
https://mbagame303125988.wordpress.com/
6
The Best Markstrat Guide with Helpful Markstrat Tips to Win Markstrat 2022
7
THE BEST MARKSTRAT GUIDE WITH HELPFUL MARKSTRAT TIPS TO WIN MARKSTRAT 2022 - MARKETING STRATEGY GAME FREE WINNING GUIDES AND TIPS - PART ⅓
https://marketingsimulation2012.blogspot.com/
8
MARKSTRAT TIPS - MARKETING STRATEGY GAME FREE WINNING GUIDES AND TIPS - PART 3
https://markstrat2019.blogspot.com/2019/01/marketing-strategy-game-free-winning.html
9
MARKSTRAT GUIDE - FREE Winning Guides and Tips To Win Markstrat 2022 - Period 1
https://www.youtube.com/watch?v=qLQ8o5omwXI
10
THE BEST MARKSTRAT GUIDE WITH HELPFUL MARKSTRAT TIPS TO WIN MARKSTRAT 2022 - MARKETING STRATEGY GAME FREE WINNING GUIDES AND TIPS - PART 1/3
http://marketingsimulation2012.blogspot.com/
11
Marketing Strategy Simulation Game - FREE Winning Guides and Tips for Markstrat
https://marketinggame2018.blogspot.com/
12
MarkStrat - 8 Round by Round - Guides and Tips
13
The Best Markstrat Guide with Helpful Markstrat Tips to Win Markstrat 2022
14
Markstrat Tips to Win Markstrat 2022
15
MarkStrat 2018 – Free Winning Guides and Tips & Free Personal Support for 2 Rounds
https://markstrat6688.wordpress.com/2018/08/06/the-journey-begins/
18
MARKSTRAT Help - Markstrat 2022 - FREE Winning Guides and Tips - Free Personal Support for 2 Rounds
https://www.youtube.com/watch?v=24xrOEhstAc
19
MARKSTRAT GUIDE - FREE Winning Guides and Tips To Win Markstrat 2022 - Period 1
https://www.youtube.com/watch?v=qLQ8o5omwXI
20
Quick Guide to Win MarkStart 1 - The Best Free Guide with Helpful Tips to Win Markstrat
https://markstratguide.blogspot.com/
21
StratX Simulation - Markstrat 7 - Top 10 Tips to WIN MARKSTRAT - Round 2 (Win with 4 new products)
https://www.youtube.com/watch?v=M1mxUqO8Ls8
Markstrat 150
— —
StratxSimulation,
MarkStrat,
Marketing,
Simulations,
Sonites,
Vodites,
Free guide,
Markstrat Guide,
Markstrat Tips,
Markstrat Help,
2023,
2024,
2025
------
Markstrat 500
Markstrat,
StratX,
Tips,
Guide,
Guides,
How to Win,
How to Win Period 1,
Period 1,
Period 2,
Markstrat 2024,
Markstrat 2025,
Markstrat 2026,
2024,
2025,
2026,
Markstrat Guide,
Markstrat tips,
Markstrat help,
How to win Markstrat,
Markstrat,
R&D,
Price,
Markstrat tips,
Win Markstrat,
Processing power,
Display size,
Design index,
Battery life,
Features,
Connectivity,
Sonites,
Vodites,
Winning guide,
Explorers,
Shoppers,
Professionals,
High Earners,
Savers,
Sales forecast,
Marketing mix,
Sales force,
------
1.
Focus on the ideal points.
This is probably the most basic
but important Marketing Strategy Game tip. In our Semantic Scales market
research report, we will see each target segment’s “ideal point” on positioning
maps laid out by price and each other physical attribute. We will also see
where each brand on the market lands on this map. This is showing we what each
segment wants and how well they perceive each brand at delivering it. Unless we
have no competitors on a segment (meaning we can charge higher prices or not
deliver a perfect product and still get sales), we want each of our brands to
stay as close to its target segment’s ideal point as possible. These points
will move each period, typically in a pretty linear trajectory (click “access
additional charts” at the bottom of our Semantic Scales report), so make sure
to track this and forecast ahead when building new base projects in R&D.
2.
Find out what is most important to our segment.
Segments place higher value on
certain product attributes than others. Typically this is Power and Price for
Sonite segments, Connectivity and Price for Vodite segments (we can see this in
the Conjoint Analysis report). When trying to hit a segment’s ideal point,
focus on the positioning map that plots those two most important characteristics.
Every period when we advertise our brands, set perceptual objectives for these
two characteristics to try and bring our brand closer to that point.
3.
Don’t underproduce in the beginning periods.
The beginning periods are all
about gaining market share. There is much more harm in selling out (losing
potential sales and share) early on than incurring inventory costs, especially
if our budget is fixed for the next period (i.e. EI costs won’t be deducted
from our next period budget).
4.
Use our market research reports.
We want to make this as little
of a guessing game as possible. Use our market research reports to learn what our
competitors are doing: how much they’re spending on advertising and commercial
team per brand, which segments they are or will be targeting, when they’re
investing in R&D, and so forth. You’ll also need market research to learn
about our segments and measure the results of our decisions. There’s a lot of
data, so spend the first period or so familiarizing yourself with each report so
we know what to look for moving forward.
5.
Don’t be afraid to drop under-performing brands
Should do it as early as possible. If we have a brand that comes in far off the ideal point and is not
being received well by our target segment, it will be very hard (and take lots
of money) to change those perceptions and gain market share with that brand. It
is much easier to drop the brand and launch a new one; if we give the new brand
lots of advertising money, market share can be gained relatively quickly in the
early rounds. One of the best decisions our team made was to drop one of our
beginning brands very early on in the game (LOCKER) and focus on the higher end
segments where we had a good product (LOOPEA) to base new brands off of.
6.
First impressions matter.
As mentioned in the previous
point, it can be hard to change the initial perception that a brand receives on
the market. If the brands that we start with are far off the ideal point of the
segments we wish to target, it may be better to wait until we have new base
projects created before we launch new brands. If we launch a brand and it is
far off the ideal point, take it off the market and try again with different
perceptual objectives or wait until we have a better base project. Brands that
come on the market earlier than others, but are far from the ideal point, will
capture much less market share (both short-term and long-term) than brands
which come in a period later and hit the ideal point perfectly.
7.
Use perceptual objectives.
The “base project” of a brand
determines its physical attributes; a perceptual objective determines what we want
our target segment to perceive each physical attribute as. Because segments’
ideal points are always moving, we base project will not always deliver exactly
what they are asking for. Use perceptual objectives to bring our brand closer
to the ideal point each period. For example, if our brand is perceived as a 3.0
in power on the Semantic Scales chart and the segment’s ideal point for power
will be a 3.2, we can set our perceptual objective to 3.4 to land directly on
the ideal point. As a note, never use perceptual objectives to make a segment
perceive our price as higher (some teams made the mistake of doing this); if
the ideal point is moving towards higher prices, just raise our actual prices
so we can increase our margins.
8.
Don’t skimp on advertising research.
In order for our perceptual
objectives to work, we need to spend at least 10–15% of our advertising budget
per brand on advertising research.
9.
Tip: Again, Out-spend our competitors in advertising and
commercial team.
If our brand is perceived as
being close to a segment’s ideal point, this is the biggest determinant of
market share. Throughout my simulation, it was common to see teams leapfrog
others in market share based on one round of outspending them in advertising.
In the early periods (when brand awareness is low) advertising seemed to be a
little more important, but as the game moved forward it became evident that
having a higher commercial team helped to increase our sales and net
contribution. Early on we gave our commercial team about 20% of our marketing
spend (ads + commercial); in later rounds as budget increased we made it 50/50.
Pay attention to our Experiments report to see where we should be spending more
money.
10.
Give heavier advertising to our high-performing brands.
Look at which brands are
generating the most unit sales and the highest per unit contribution margins.
Brands with high unit sales have a good opportunity to become the market leaders
in their segments, support them with lots of advertising power to keep them on
top of the competition (if they have slim margins, we can focus on improving
these later by minimizing costs through R&D or increasing prices through
price setting and perceptual objectives). For brands with good unit
contributions margins, focus on trying to maximize their sales, as each dollar
spent here will go a longer way for our overall net marketing contribution. In
the first period, we split our budget in terms of how much net contribution
each brand gave us (LOOPEA generated 75% of our net contribution, so it got 75%
of our budget).
11.
Tip: Try to target maximum 2 (maybe 3) segments in Sonites.
We can launch a maximum of 5
Sonite brands and 5 Vodite brands. In Markstrat, think of a “brand” as the
packaging of a product, and the “base project” as what is actually inside. We will
typically need a different base project to target different segments, but
multiple brands can use the same base project. Limiting yourself to two
segments means that we can limit yourself to two base projects, which will save
costs. This is because the more units we sell of each base project, the lower our
“transfer costs” (cost of production). This is also because it will cost we a
good amount of money each time we want to create a new base project through
R&D, therefore we don’t want to have too many. With those two base
projects, we can then launch 5 brands in the Sonites market. This will spread our
advertising, but allow we to capture as much market share in each target
segment as possible
12.
Plan our long-term strategy (Sonites and Vodites) in Period
1.
Decide where we want to be by
the final period, and then set a period-by-period strategy to get there.
Knowing when we plan to invest in R&D and when (if) we plan to enter the
Vodite market will help we organize our spending each period. Spend a good
amount of time looking at the data we have in Period 1 to do this, and choose
target segments wisely (based on size, price-sensitivity, competition, etc.).
13.
Win Marketing Strategy Game - Period 1
This includes for example deciding which
segments we want to target with our existing brands. If we change
the segments we target with our brands in the course of the simulation, we will
always have to invest much more in order to gain market share in the new
segment. So put in some effort right in the beginning and setting up a
long-term plan.
i. Explore the Marketing Strategy Game interface and study
all information available
This is a crucial necessity: We have to go into every
corner of the Marketing Strategy Game interface and get to know what is
available there. Furthermore, study all the reports that
are available and see which information they give we about our industry, the
competitors, the consumers, etc! Especially the report Consumer
Survey & Panel and the Market
forecast are very interesting and necessary to base our long-term
strategy on their data.
ii. Marketing Strategy Game period 1 strategy
·
Portfolio
management: On which segements are we focusing? High-value segments
with little volume or low-value with big volumes? It’s best to chose just 1
segment for each brand and then rather create new brands to target others.
·
Vodite
market entry: This point is
actually still portfolio management, but it has such a high importance and
popularity that I want to list it separately here. Plan when and how we want to
enter the Vodite market already in the beginning!
·
Price
Management: High or low prices? Suggest to chose to have a
slightly higher price than the segment’s ideal price for the high-value
segments, and the opposite for the low-value segments. The reason behind this
was their perception of the price: For high-value seeking customers it sends
the signal of high quality, whereas the low-value segments often decide simply
on the price if the product is allright.
·
Advertising
objectives: Through chosing the advertisement objectives we can
influence the perception of our brand. If our actual product characteristics
are not ideal for the segments’ preferences, we can still make them believe
that our brand is exactly what they want! This we can do through setting the
the advertising objectives to the characteristics we want to have.
·
Commercial
team: The advertisement is
slightly more valuable but neglecting the sales team is a huge mistake, because
with advertising product will be popular, but not widely available in the shops
(commercial team can do this).
iii. Gain market share (key to Win)
Number 1 goal
in period 1: gain market share
iv. Advertisement
In order to win Marketing Strategy Game period 1 we have
to gain market share. To achieve that, we need to focus a huge chunk of each
brand’s expenditures on ONE segment and only a tiny bit on maximum one more
segment (I’d say 70/30 split is reasonable for the first period). We should put
at least 70% of all the advertising expenditures into our main segment and then
maximum 30% into the second segment. This will help we gain a lot more market
share than if we split up the advertising spendings 50/50 between two segments
or even target more segments.
Furthermore, we need to put 10-15% (I’d rather opt for
15%) of our total advertising expenditures into the so called Advertising Research, which
helps to actually get the right message to our target segment and make our advertisements
more effective.
Please note: Latest
after period 1 I would recommend we to focus on only 1 segment. Choose the segment which our brand can suit well (–>
it’s perceived well and known to the segment) and furthermore has the lowest
competition! Then we need far less investment to gaina bigger piece of the
cake.
v. Sales Team
Next, we need to focus on where we send our sales team.
In the market research report Consumer Survey & Panel we
can see which distribution channels our target segment prefers for their shopping.
For example: 60% in specialty stores, 20% in mass merchandisers and 20% in
online stores.
Then we apply this ratio to the division of our sales
team. If we have 50 sales people for the brand X we put 30 (=60%) to focus on
the specialty stores and 10 each (=20%) on the mass merchandisers and online
stores.
vi. Market studies
Market studies provide we with valuable
information. Without them we just see our company and brand results
(e.g. financial performance, etc.). So we need market studies to
be able to analize and evaluate the market environment and
our competitors. This is especially valuable in the beginning to
get an understanding about the market and make informed
decisions.
vii. R&D projects
As already stated in the upper part we usually don’t have
much information about the brand perceptions in the consumer’s mind in terms of
positioning and what the different segments actually want from our Sonites. So
it’s impossible to create a good project for an improved product. At least
not in the first round (when you’re making our first decision). Lateron, when we
buy the respective market reports to acquire the information we need we can
start R&D projects to improve the characteristics of our existing brands or
launch new brands. We need information from the semantic scales or multidimensional
scaling to be able to know what product characteristics would be
good. So that’s something we can do from the second decision on.
viii. Production
Marketing Strategy Game is interdependent just like the
real world. That means the actions of each market player (= our competitors +
you) affect each other and influence the results we get. Let’s say we decide to
produce 100 units. This can be successful when our competitors do “A” and could
be a total failure if our competitors do “B”. Without we doing anything
different. I guess we get where I am going with this. That’s why we need to
analyze and read our competitors!
ix. Considerations for determining the production size
The production planning in the first decision round take
this into consideration:
·
Market size and size
of the segments (in units) + projected growth of market & segments (if
available). This will be the number we take into consideration for our production
planning, because that indicates the market size in the next round.
·
our current market
share (in total or better: per segment).
·
sold units last
period. The unit sales of last period are a good indicator where our sales the
next period will be approximately. Adjust this number by the expected market
growth to have a basis to decide upon.
·
the segments we target
with our brand. If we target a specific segment, then look especially at this
segment (size and growth)
·
competitors and
their products
·
price changes we make
to our brand. According to basic economic theory lower prices lead to higher
demand – if the competitor actions remain the same. Be sure that this will
never be the case in Markstrat.
·
The cost of lost
sales is higher than inventory costs. Should plan to produce too much than too
little. When we don’t produce enough (and I mean even after Marketing Strategy
Game increased our production size), we don’t only lose sales (which already
hurts enough, doesn’t it?). Lost sales = lost money. PLUS: The customers that
couldn’t buy our product went to our competitor and increased their sales! So we
lose in two ways. And the cost of inventory is usually not too high (20% of
production cost) PLUS we can sell the inventory units next period! That only
doesn’t work if we change the brand (–> allocate a new research project).
But that will not bother we in the first period.
·
Make use of the 20%
automatic adjustment: Marketing Strategy Game will adjust our production plan
automatically by up to 20% no matter whether increase or decrease. This is
another factor to make Marketing Strategy Game more realistic because in real
life we could adjust the production as well if we see that we have lessor more
demand than planned. So if we plan to produce 100 units, but can only sell 90
in the end, then Marketing Strategy Game will adjust our production to 90. Same
would work in the other direction, if the demand was 110. If the demand
deviation is more than 20% from our original production plan, then Marketing
Strategy Game will only adjust 20%. Say our demand was 130 units, we could only
sell 120 and 10 units will be bought at a competitor of you. Or if the demand
was 70, we would still produce 80 and had 10 units in inventory.
14.
Strategy in MarkStrat
Applying our theoretical knowledge about strategy in Marketing
Strategy Game is harder than one might think! It’s best to do the planning of our
strategy even before we start the Marketing Strategy Game competition. First we
need to get an overview what Marketing Strategy Game is and how it works.
Again, read the manual!
Important remark: Each strategy is only as good as the information
it’s based on. Each period the situation will change and we will have a
different basis to decide upon. Therefore, each strategy can (and should)
always be adapted! Look at our strategy and consider whether it still makes
sense and is the best way to go. If not, change it and set out a new path for
the next periods.
i. A quick story to exemplify how strategies work
So stay flexible in our approach and analyse our position /situation every
period.
Let’s clarify what’s the definition of a strategy. Business
dictionary defines it as:
“1. A method or
plan chosen to bring about a desired future, such as achievement of a goal or
solution to a problem.
2. The art and science of planning and marshalling resources for their most efficient and effective use. The term is derived from the Greek word for generalship or leading an army.”
So at first the strategy in Marketing Strategy
Game is about setting up a plan to achieve our long-term goal, which is most
likely to be at the top of our industry in the last period. Secondly, strategy
is also about using our available resources most effectively and efficiently.
As our budget will be limited, we can’t do EVERYTHING, we need to focus our investments
on the most profitable actions.
2. The art and science of planning and marshalling resources for their most efficient and effective use. The term is derived from the Greek word for generalship or leading an army.”
· Define how we plan to reach our long-term goal
–> To win Marketing
Strategy Game we need to have the highest SPI in
the last period.
To achieve this we need to build strong brands, that lead
the industry in terms of volume and sales. But also the contribution or net
profit is important for the SPI, so decreasing the cost is highly important,
too. Therefore we should plan in our strategy which segments we want to target
and when we want to enter them. Vodite is a big factor here for sure, but also
the other segments have the potential to drive our success. It all depends on
what our competitors are doing and where the market offers attractive
opportunities.
Ask yourself which segments we will want to dominate at
which point of time – maybe some are attractive now and others in the future?
And then plan backwards: When we need to do what in order to become the
industry leader. This includes R&D projects we need to initiate and
finance, Marketing campaigns, etc.
ii. Define
how we will use our resources
That means how we want to
spend our budget.
Is advertising more important than the sales team?
Which importance do we give to R&D or the market
reports?
Define how we will allocate the budget, what we will
prioritize over other things.
We will have to make trade-off decisions – either A or B
– in each period of Markstrat. It makes it a lot easier if we define which type
of spending our budget we prioritize and also how we determine which brands are
more important than the others: Is it the sales volume, the sales value, the
net contribution, the market share, etc. Thinking about this upfront makes it a
whole lot easier lateron!
iii. Define key segments to target (KEY TO WIN)
In order to be successful, we need to think about which
segments will determine about winning Markstrat.
Here, the volume and sales of a segment play a key role,
but also other factors like competition and required investment are not to be
ignored.
To find out which segments will play a key role, we need
to conduct a segment attractiveness analysis.
It is not unusual, that we will want to target different
segments in the beginning than in the end. Segment attractiveness develops
ovver time and also our options vary. Where our options in the beginning are
more limited and will probably focus on the segments our exisiting brands are
closest to right now already, later on we can target more segments when we increase
our budget.
When we identified which segments we want to target, then
plan WHEN we want to enter them and what we need to do today in order to become
succcessful in the future.
iv. Decreasing costs to increase profitability
In order to win Marketing Strategy Game we need to have
the highest SPI in the end, right? One important factor of the SPI is our contribution or net profit, which is
directly influenced by the unit costs a product has. Therefore, think about how
we can lower the costs per unit of each brand as much as possible!
The more we produce, the lower the costs will become. So
in segments with high volume (which are usually lower in value / price) our unit
cost will typically drop over time.
But be aware of this: Segment preferences change over
time, that means having the perfect product for segment A today is not
guaranteeing a perfect product in the next period or in 3 periods.
So we need to adapt our product and make new R&D
projects. Only negative aspect about that: Our cost curve will start from the
beginning again and our cost advantage will be gone. So consider well, whether we
want to switch to a new base project.
v. Some tips on strategy from me:
·
Intend to always
create the best product for the segments we are targeting. That means: Invest
in R&D – in almost every period! However, sometimes it makes sense to make
a compromise, but that’s an advanced strategy for absolut highly
competitive Marketing Strategy Game competitions.
·
It’s essential to be
as cost efficient as possible. There is a limit to what we can charge the
customers, but we can reduce the costs almost unlimited. We reduce the costs
for example through R&D projects, but the far more effective way is by
economies of scale and experience. Economies of scale mean: Produce a lot of a
brand and the costs per piece decrease. The longer we have a brand, the more
produced units will accumulate and thus, the costs are decreasing. If we commercialize
a new brand with a new project, it will have much higher costs compared to
that. So consider that we want to establish a brand as early as possible,
especially in low-value segments in order to be most profitable.
·
Don’t focus on too
many segments. Should NOT launch too many new brands at once, because this
means less budget for the other ones. Especially if we don’t have strong
positions with our existing brands, it’s risky to launch new brands. Why?
Because we split our budget even more – and we would need our available budget
to improve the situation of our exisiting brands.
·
Which segments in
Sonite and Vodite will be the most valuable, both in the last period and during
the simulation. In the end, we want to be the leading brand in the most
valuable segments in Vodite and Sonite. But these don’t have to be the most
valuable segments from the beginning (Hint: They are not). So estimate the
value of each segment in the present and in every period until the last. How?
Use the expected growth from the market forecast report!
15.
Vodite Strategy
Vodite is a key to lead the game because of good sales and net profit.
So, we need to plan for the followings:
·
How to anticipate our
competitors Vodite launch
·
When to launch
Vodites
·
Ideal Vodite
characteristics
·
Which Vodite segment
to target
·
How to determine
Vodite production
·
Which Vodite price
to claim
·
Vodite market
research reports
i. Vodite
has without doubt a huge importance in Markstrat
Best
strategy for Vodite in Markstrat
We should have a plan for the Vodite market right away
from the beginning. That includes a few questions we need to answer for our Vodite
strategy. How to anticipate the first
Vodite launch (if it isn’t our company that launches
first)
To anticipate when our competitors will launch their
first Vodite, we have to keep a close eye on the R&D expenditure of our competitors
in the Vodite market. We can see that in the market research report “Industry Benchmarking“. If the R&D
investment in the Vodite market of any competitor adds up to 6-8 Million $ in total (in all previous periods), we need to
expect this competitor to launch their Vodite in the coming period.
It’s essential that we know when our competitors launch
their first Vodite and it’s fairly easy to see this in Markstrat.
Now read carefully what else I recommend for our Marketing
Strategy Game Vodite Strategy.
ii. When
to launch Vodite
When to launch our first Vodite in Marketing Strategy
Game is a good question many participants ask themselves. In my experience I
have always tried to be the first company to launch a Vodite, but I think there
are two more valid Vodite strategies to succeed in Markstrat: Marketing
Strategy Game Strategy Vodite: Be the first company to enter the Vodite market
The benefits of being the first company to enter the
Vodite market are obvious: We enjoy a monopoly and therefore 100% market share!
This also allows we to claim a higher price compared to a competition situation.
Naturally, there are some negative sides to this
strategy:
We need to invest a higher share of our budget into the
Vodite R&D project than our competitors in the periods prior to our Vodite
launch. That means, that our position in the Sonite market will be weaker,
because we can’t spend as much as we could in order to strengthen our position.
We need to start investing into our Vodite project right
away after the first period. And we won’t know whether we will actually manage
to be the first one to launch our Vodite, because we can’t influence what our competitors
do. Just keep an eye on their moves and R&D expenditures.
The secret to this strategy: We need to try to build a solid position in the
Sonite market and at the same time invest as much as we can in the Vodite
project. So our first priority should be to maintain a good position in the
Sonite market, otherwise we sacrifice our profits and will end up with less
budget in future periods to spend on our R&D.
I don’t think it would be worth to totally neglect our Sonite
position just to be the first one to launch our Vodite. Our Vodite
entry should base on a solid Sonite position.
In the beginning, the Vodite market is still developing
and growing a lot. Thus the profits to be gained in the beginning are small
compared to the profits later on. The most important segment is the Followers
segment, which will grow immensely after 2-3 periods after the first Vodite has
been launched. Therefore we can still dominate the Vodite market even though we
haven’t been the first one to enter.
And besides, we can finance our Vodite entry and the
R&D projects necessary to develop a strong position through our strong
position in Sonites.
Another valid strategy is to focus completely on the
Sonite market at first and ideally dominate this market, because our competitors
already split their budget to invest in Vodite R&D projects. Therefore, we have
an advantage over them in the Sonite market, because we can spend our budget
completely on our Sonite brands. More investment usually goes along with higher
market share, sales and profits (if done right).
For this strategy to work out, we need to invest into
better Sonite brands (–> new R&D projects) and then market our brands
with heavy Marketing expenditures (advertisements and sales team).
However, if we just create our Vodite project once the
first competitor has launched their Vodite, we can discover the right
characteristics easily by buying the market reports Semantic Scales or
Multidimensional Scaling and then creating a much better product than
our competitors (because they couldn’t know the characteristics when they
created their first project). However, our competitors will probably try to
create an improved Vodite immediately after they have these information.
So we still
need to be fast and get our project finished within 1 or maximum 2 periods.
iii.
Ideal Vodite characteristics
A problem we face when we want to launch the R&D
project to develop our first Vodite is how to set the ideal Vodite
characteristics.
There is no Vodite available yet.
So we don’t have any other choice than guessing the characteristics
we should set.
Following strategy we wait with the creation of a
Vodite R&D project until another competitor has already entered the market
and we can copy their characteristics and the ideal characteristics of each
segment.
Tips: We
launched a Vodite that is somewhat medium in many characteristics. Our plan was
to launch the Vodite and then after the market entry, once we had some
information on the segment preferences
Consider two things:
The carbon footprint of our product can become subject to
fines from the government (in later periods), if the emissions are too high.
Thus, I would recommend to go for rather low carbon characteristics.
The segments in Vodite are more volatile than the Sonite
segments and the ideal characteristics will change more and faster. Therefore we
will need to change our brand through subsequent R&D projects anyway.
Therefore it’s not as important to find the ideal
characteristics already for the first Vodite when we enter the market.
iv. Which
Vodite segment to target
Vodite has three
segments. As
in the Sonite market we can’t serve all segments perfectly with just one brand.
Thus, we need to create several brands anyway, if we want to target more than
one segments (which I would recommend if we enter the Vodite market early).
Consider which segment will be the best to target at the moment when we enter.
In the beginning the Innovators are the
biggest segment, but the Early Adaptors catch
up soon. In the end, these segments are rather small compared to the Followers, which
will be the biggest segment by far in the end.
We can target the Innovators and Early Adaptors first and
then the Followers later on with a new brand.
Following strategy we should buy the market forecast
report and see which segment to target first (but I think it makes most sense
to target the Followers directly).
v. Production
volume Vodite
Once we finished our Vodite project and are about to
launch, we ask yourself how much we should produce. This is a fairly normal
question and we won’t know that for sure.
In general, I would recommend we to rather produce too
much than too litte, because lost sales hurt more than inventory.
The demand for our Vodite product will depend on 2
things:
- Our price. The higher, the less demand (usually).
However, the Innovators and Early Adaptors are rather price insensitive, that means they really want to have our product
and don’t care too much about whether it costs 100$ more or less.
- The second important factor is, whether we enjoy a
monopoly situation (= we are the only brand available) or whether our competitors
have already entered or will enter the market in this period. As described
above, keep an eye on our competitor’s moves and estimate, whether they will
enter the market together with we as well.
Usually, the total demand for Vodites when they become
first available is between 50.000 and 150.000 units (depending on the quality
of our product and the price). The subsequent periods we can see how the demand
develops approximately through the market forecast report.
vi. Marketing
Strategy Game Vodite launch price
After setting the production volume, we ask yourself
which price to determine.
It depends on whether we are the only company that is on
the Vodite market or not. If we are the only brand on the market we can
fix higher prices, because we don’t compete with other brands. If not, we need
to take into account how high our competitors will fix their price.
The first customers for Vodite (Innovators and Early Adaptors) are not price sensitive. Therefore we
can rather fix a high price, but of course depending on the quality of our product.
A good guideline for setting the price is roughly the
cost of our Vodite R&D project divided by 5.000. So if our project costed 6
Million $, my advice would be a price around 1.200$. This
depends on the possible competition. Having a monopoly, we could claim a lot more!
vii.. Vodite
market research
The same market research reports that are available for the Sonite
market we can also buy for the Vodite market. It doesn’t make sense to buy any
in the beginning when there has not yet been any brand launched, because we won’t
get any information.
Just when the
first Vodite has been launched, it makes sense to buy the Vodite market
reports. And we want to know quite
exactly when the first product will be launched, because we need to anticipate
the market entry in order to have the report available. The reason: To have the
report available in the right period, we need to purchase it before we even
know for sure whether a competitor will launch or not. So, as described in the
beginning of this article, we need to monitor our competitors! (Check report in
round 3-4 to see any competitor launch Vodite)
16.
Best Marketing Strategy Game Tips
There is not THE ONE answer or trick to win all games but
we should make the right decisions. Marketing Strategy Game is a very realistic
business simulation and therefore everything in Marketing Strategy Game is
interrelated and connected. Our results do not only depend on our actions but
also on the actions of our competitors. This adds complexity.
So see it as a chance to learn a lot for real-life later!
There are some advice what to do (almost regardless of
the competition, of course not 100% regardless).
Here follow my 5 best Marketing Strategy Game tips:
i. Best Marketing Strategy Game Tips – 1: Set up a strategy
and think in the long-term before the short-term
This is actually a good advice for life in general. Make
sure we always have the long-term goal in mind and check each decision we make
whether it contributes in the long run. Short-term wins are nice, but what are
they really worth if we can’t sustain them in the long run?
We are playing many periods. What maters most is where our
company stands at the end of the competition. So apply long-term thinking to
everything we consider. Rather miss out on success in the first periods by
spending not so much on advertising or the sales team. The simple reason: We need
to invest in Research & Development (R&D) projects! Of course, this
budget is missing when it comes to advertising or to grow our sales team and We
know it hurts in the short term. But, it’s worth it long-term!
Apply this mindset to develop a strategy for the whole
competition. It’s crucial to think ahead and determine what we want to achieve
by when and what we need to do today in order to achieve it. Think for example
about which segments we want to target and when we want to enter them. This
relates directly to the R&D efforts we need to put in. If we want to enter
the Professional segment in two periods,
we need to start to think about where to get the budget for the R&D
projects from.
PS: To stress
the importance of long-term thinking even more, the next two tips are also
related to the maxim of longterm thinking
ii. Best Marketing Strategy Game Tips – 2: Invest in R&D
The brands we start
with are not well targeted at any segment.
Therefore it’s certain that we need R&D projects to improve them or to
create new brands. And also in order to conquer the mysterious Vodite market, we
need to invest (heavily) in R&D! So start investing right in the beginning.
Perhaps we want to penetrate the Sonite market with one or two more brands, or we
want to focus our R&D investments directly on the Vodite market. Both are
valid strategies, but as mentioned above, make sure to always use a good part
of our budget to invest in an improvement of our portfolio.
iii. Best Marketing Strategy Game Tips – 3: Choose the most
profitable segments
Be the first and strong in one segment. Sometimes it’s
too late to enter a segment if the competition has got already too strong. If
so, be strong in other segments (This is one of the best marketing strategy).
Select the segment is important.
The market reports can be very useful for that, too. Use
the growth rates there to predict the market sizes for each period. Then you’ll
probably notice which fight we have to win.
Hint: It’s not the fight who
dominates the Explorer segment!
Another thing when it comes to segmentation: Calculate a
good amount of time to become successful with our new brand when entering a new
segment. First, we need to create the right product, sure. So, depending on our
budget allocation and the project costs, this already takes at least 1 period.
But even from the time we have finished the project and we commercialize it, we have to
calculate 2-3 extra periods to make our brand successful.
Why? Well, 1st no one knows about our product and 2nd our
brand isn’t available in any shop. The effects of our investments in advertising
and sales team take time to fully sell.
iv. Best Marketing Strategy Game Tips – 4: Have a plan for
the Vodite market from the first round on
We already know, that we will have the opportunity to
enter the Vodite market if we create a product through an R&D project. My
advice is that we plan when and how we want to enter the Vodite market already
in the beginning. This market is highly important and we need to decide
strategically when we want to enter, because it affects our decisions from the
period 1 on (typically it doesn’t affect the first decision round though). One
reason for that is the huge costs that come with entering the Vodite market –
the R&D project costs around 6-8 Million $!
We need to get clear right away how we want to finance
this investment.
v. Enter Vodite as the first company
If we are the first company and thus open the market
“alone”, we can establish extremely high prices. That’s how it works in a
monopoly This also means that we have 100% market share (being the first
and only one in the market). We will never have it that easy to gain such
significant amount of market share. The second one enjoys little competition
and thus can grab much market share quite easily, too. But by far not as easy
as the first one. So if we can manage to be the first into Vodites, it’s
usually really powerful! But be aware, that others might try the same and then
it’s not as beneficial anymore! (Again, other competitors may know this and can
do the same, so, we will not be the only one to enter Vodite, should check
competitors strategies in report).
vi. Enter as a fast second company
If we see a competitor enters Vodite. We can move fast. This
strategic move – quite common in reality – lets we have some knowledge upfront
about the before unknown market. You’ll know the price point our competitor
located at, the market size and segment locations. To achieve the knowledge we need
to buy some of the Vodite market research reports in the period that we expect our
competitor to enter. Keep an eye on the sum of their investment into Vodite R&D – if it adds up to 6-8 Million $, we need to
expect them to launch their Vodite any time!
It’s also valid to try to pursue strategy A, but if we notice
that a competitor will probably launch their Vodite earlier than we (because of
the sum of their investments in Vodite R&D), we can switch to strategy B.
vii. Enter Vodites much later
We can also enter the Vodite market quite late, so we can
focus our whole expenditures on dominating the Sonite market first and also
might be able to sneak peak the best product characteristics for our Vodite
project. This includes, that we use our budget to build a very strong position
in the Sonite market and then once one competitor opened the Vodite market,
pursue like in strategy B.
In my experience, Vodite is one of the main deciding
factors which company wins in Markstrat.
Winning teams were among the first to enter Vodite and
dominated this market. However, we don’t need to be the 1st to enter
necessarily.
viii. Best Marketing Strategy Game Tips 5: Target segments
with low competition
It’s the dream of every CEO and Marketer: Applying the
classical Blue
Ocean Strategy. This means competing in a market where there is either no
competitor or only very few. This makes the market actually very attractive
because to be successful we need to spend much less compared to markets with
high competition. Also, the chance to grab a high market share in low
competitive markets is very high.
This means big profits for little money!
Typically the “Explorers” segment gets neglected in many Marketing Strategy Game competitions
because the segment is shrinking and not really attractive. But this exact
thing can make it attractive! What if no one targets the explorers? Then the competition is 0
and we can easily gain a massive piece of the cake without a big investment. We
just need to develop a good brand for the Explorers through a fairly cheap
R&D project and invest some Marketing expenditures – easy profit!
But – and this is the nice thing about Marketing Strategy
Game – if another company has the same idea, the plan doesn’t work. So our actions
must highly depend on what our competitors do! (Again, need to read report to
see if any competitors focus on Explorer).
17.
Blue Ocean Strategy in Markstrat
Avoid the busy segments, where we compete against many
competitors for a limited market – the so called Red Oceans – and look for
unoccupied spots to settle with our company / brand. Like this we have to
compete with less others and therefore enjoy much more effective investments
(relatively low investment leads to relatively high rewards) and more market
share in the segment. Yet when many
students get to play Marketing Strategy Game they seem to forget about this!
Red Oceans seem more attractive at first
sight
The reason for that – I think so at least – is that many focus
only the attractiveness of a segment, be it segment size (volume)
or value (sales). And because this is quite easy to find out,
many teams focus on the same segments.
This in turn makes these segments much less attractive
than they might seem at first. We need a lot of investment to get a piece of
the cake and even to maintain the market share once we gained it. The rewards
can sometimes not justify these efforts. Or we would simply be more effective
in another market, meaning less investment needed to achieve similar outcomes.
Tips: In Marketing Strategy Game it is so easy to
identify the Blue Oceans!
TAKE ACTION: Take a quick look at the Semantic
Scale report and count the brands that are close to each segment. The
segment with the fewest brands around could be the first Blue Ocean, right?
Tip: Typically a Blue
Ocean: The Explorers segment
One classical example of a Blue Ocean in Marketing
Strategy Game is the Explorers segment. Typically, the participants tend to
neglect it as it doesn’t seem attractive
on first sight. Relatively small
volumes and the growth forecast prognosticating slight decrease over the years
really are not that tempting for investment.
If we don’t have competitors in that segment on the other
hand, then you’ll quickly grab a huge part of the segment. Which
makes it quite attractive again. Find the segments that have low
competition, because our investment can have a greater impact there. (Again, be aware of competitors having
the same plan!). One or two competitors
would decrease the attractiveness of the Explorers segment significantly. But
it might be worth a try.
Conquering a segment that no one else is targeting is
usually a good idea, but check for the
viability of our investment. That means, whether we can generate enough profit
to justify our investment.
A segment of 1.000
highly specialised customers paying double the price than usually does not
necessarily have to be profitable for you. So, do some simple calculatioon first!
18.
Identifying Blue Oceans: Evaluating segment
attractivity
It seems like the two prominently used variables
(sales volume and sales value) are not enough to evaluate the attractiveness of
a segment.
We have to take into account other factors, like the
competition for example (measured in competing brands). The more
competing brands, the higher is competition and thus, the less attractive gets
the segment. Also take into account the expected
segment growth to evaluate the segment’s attractiveness.
If we plan to enter a segment it’s also important to
consider the entry barriers. Entry barriers would be strong competitors with a lot of
market share or high Marketing & Sales spendings (make sure to check how much the brands are investing
through Advertisement and Sales Team with the Market research reports).
Also keep in mind that we have to calculate at least 2-3
periods after market entry to make our product known and available in the
shops. Another entry barrier is the approximate cost for the R&D project to
develop a suitable product to target the segment.
19.
R&D in Marketing Strategy Game
Master R&D
and we are on a good way to master Marketing Strategy Game
·
R&D strategy
·
Importance of
R&D in Markstrat
·
How to do R&D in
Markstrat
·
Expert advice
i. R&D Strategy
Our R&D strategy has to fit into our overall
strategy!
R&D in Marketing Strategy Game consists of research
projects, which we have to finance with our budget. As our budget is limited, we
need to prioritise what is most important to we (advertising and sales team for
each brand, market reports or R&D projects)
R&D is one of the most important factors in
Markstrat.
ii. Importance of R&D in Markstrat
Do R&D wrong and we can never win Markstrat!
With successfully finished R&D projects we can launch
new brands or adapt and improve old brands.
Improving our existing products (for example so they
serve the customer needs better or in terms of production costs) and creating
new products to serve the needs of our customers better and target new customer
segments.
We want to grow our company as much as possible. What do we need to do to achieve that?
·
Serve as many
customers as we can –> increase our customer base by launching
new brands and targeting new segments
·
Create the
ideal product for the customers, so
they choose to buy our brand over our competitor’s brand
·
Decrease our costs
as much as possible
TIP: Invest into R&D projects in every period!
The SPI is like the “stock value in Markstrat”. The more SPI
points we have, the more successful we are and win in the end
An SPI increase “cannot be accomplished without high
level of R&D activities.
So make sure to invest continously and develop the best
products targeted at the segments.
The best product wins
(next come price, promotion and place).
Well, maybe it’s more complex than that. Neither in Marketing
Strategy Game nor the real business world a good product is the only thing we need.
There are plenty of examples that show we need more than a great product in
order to be successful. But good roducts are still
important! Again, most important.
What means best
product
A product serves a need, thus it symbolises a benefit for
the user.
Net value = product benefit minus costs
For Marketing Strategy Game, best product is evaluated by: perception.
Benefits, values and costs don’t come absolute (even one
might think so), they depends on one’s perception. So neither in reality nor in
Marketing Strategy Game we should think in absolute terms but always in
relative terms according to the consumer’s perception.
So, check report to find our Perception about products.
iii. How to do R&D in Markstrat
In Marketing Strategy Game we are doing R&D by
creating Research
Projects, which we can use as a base
project for any existing or new brand we have – once the project has been
finished successfully.
So there are 2 questions:
·
Question 1: Which
projects should we do?
·
Question 2: How
should we set up the projects?
Answer 1: Figure
out, which segments we want to target.
We want to serve the most profitable segments, right? The
ones where we can make the most money and ideally don’t have to invest a
fortune? Well, then we have to figure out which segments fulfil these criteria
and are most attractive for you!
Answer 2: What
are the primary goals of our brands (or better: what should they be)? To
ideally serve the consumer needs! GIVE THE CUSTOMER WHAT THEY WANT!
This is much harder to determine in reality than in
Markstrat, because in Marketing Strategy Game we can buy the Semantic
Scales or Multidimensional Scaling market reports
With the help of these market reports we can easily see
what kind of product the consumer segment wants in terms of each
characteristic.
Then we just need to transfer this information into the
research project we are creating and BOOM - we just created the next
star product that the targeted segment will LOVE!
iv. How to determine the right project characteristics
We have to find out which product the targeted segment
wants to have = Their ideal product.
Once we found this out, we just need to create a project
that entails exactly these ideal characteristics!
Many teams fail to do this, so it’s not that easy after
all.
We can use the “tools” in the Marketing Strategy Game interface
(once they are available – typically they are not available in the first
periods so we don’t get overwhelmed by all the possibilities in Markstrat)
Consider this:
1.
The ideal
characteristics change over time. We can see the movement of the ideal product
of a segment in the market reports and we want to anticipate where the ideal
characteristic will move in the future periods! I have always tried to develop
new projects so it has the ideal characteristics of a segment in 2-3 periods
(depending on whether we plan to create another project and improve our product
or not). Because we will need at least 1 period to develop the product and then
we don’t want to be outdated already! So plan ahead and estimate what the
consumers of a segment will want in the future periods!
v. Expert-Tips regarding R&D in Markstrat
Some tips for R&D:
·
When we are planning
to launch a new, important brand with a new project we are just developing,
think about launching the brand name itself already one period before our project
is finished (using another project, which should be the most similar we have
available)
·
Why? Building brand awareness and distribution coverage
takes time and is crucial to our success! Therefore we can kickstart our new
brand in these two areas by investing already a bit of advertisement and sales
team before we actually launch the real product.This strategy is not always
clever, but if we can afford it and we have another project, that is somewhat
similar to the one we want to launch, then I would recommend it!
20.
Marketing Strategy Game Reports
Marketing
Strategy Game Market Reports are one of our primary sources of information.General
usefulness of Marketing Strategy Game Market Reports
There are a number of free reports, that we get
every period automatically and which give we several insights into our company’s
performance.
Other reports, the market research reports, we
need to buy in the period before in order to have the information in this
period.
Free Marketing
Strategy Game market reports
In every period, we get free Marketing
Strategy Game market reports automatically. We find these in the sections
Company Results and Market & Competitive news in the menu on the top.
Company Results
In the company results we find several
reports about the performance of our company.
Company dashboard
In this report we find information about the
development of our SPI, revenues, earnings as well as market shares.
Additionally, we see the revenues and contribution of each of our brands.
Financial report
This report gives we – we might guess it –
financial information about our company in total, the our financial performance
split up by Sonite / Vodite market and also split up for each of our brands. We
can see how our company’s performance has developed in the last periods and how
each of our brands has performed in terms of revenue and contribution.
- Like that we can determine which
distribution channel is most important for each brand.
The financial report also includes the
distribution coverage of each brand in each distribution channel.
- This helps we determine how good our sales
team has pushed the brand into the market. We can have the best product, but if
it’s not available in the stores, the customers can’t buy it. So we can see
which brand might need more sales people!
A distribution coverage of 40% can already be
considered quite decent, more than 50% is splendid. It’s very hard and probably
not worth the effort to try to reach more than 60% coverage (I think me and my
team never had 60% coverage in any market).
The financial report furthermore shows we how
much we effectively get for each unit sold. We might know already, but
depending on the channel, the shops get discounts on the sales price we determine
(5 or 10%) and also they of course take a margin of the sales price of 30 – 40
%. So be aware if we fix our prices in the decision interface, that we get much
less than the price we determine.
Production report
This report shows we in a nice graphic how
many units we have produced last period and how many we have sold – leaving we with
an inventory in case of overproduction. We can also see in a note below the
graphic if we haven’t produced enough of a brand à lost sales!
- Consider this information for our next
decision round. Especially lost sales are annoying and hurt we more than we might
think because the customers buy a competitor’s brand instead!
R&D reports
These reports – one for Sonite and one for
Vodite if we have a vodite product already – show we which projects we have
finished in the last period as well as our already existing projects.
We see the physical characteristics of each
project, the current and minimum base cost and also how much the project has
cost you. Furthermore, we see which brand we have associated to a project.
- This information can be helpful when we want
to determine the characteristics of a new project, because we can check where
on the perception map (semantic scales or Multidimensional scaling – I’ll
explain these reports further down) our current brands are. Then it’s easier to
determine good characteristics for our new project. I have a special article
about how we can determine the ideal project characteristics, check it out!
Decision review
These reports show – split up by market – how
we have allocated our budget in the last period – in case we forget or want to
check it in future periods (the reports of each period are all available throughout
the whole competition). So we can see which amount of our budget we have allocated
for what exactly.
Market &
Competitive news
In these reports, we get information about our
industry and the Sonite and Vodite market.
Industry dashboard
We will open this report immediately once the
period has been simulated and the results are available because here we can see
how our company has performed in the last period in comparison to our competitors!
First, we see each company’s SPI, revenue,
net contribution and the cumulated net contribution. Then we also see the SPI
evolution in a graphic.
- Use this market report to determine where we
are standing in our industry compared to our competitors. We can’t see much
detailed information but it gives we a quick overview of the overall situation.
Industry
information
This report gives we some less important
information about the average growth and inflation rate, the cost for hiring,
and firing sales people as well as what the market reports cost (this can
change – but not by much)
IMPORTANT: This report can entail information
about government fees for too high Carbon Footprint of our Vodite product! The
limit is likely to decrease with every period played, so make sure our brands
are below it or we will pay fines (which are not super high, to be honest).
Market reports Sonite and Vodite
Here we will see the important information
about each brand in the respective market (Sonite or Vodite). We see the market
share and absolute numbers in terms of value and sold units and also the
variation to the previous period. We can also see whether a brand has been
launched new in the last period or whether it has been modified (= a new
project has been associated with the brand, thus the brand characteristics have
changed).
In the bottom of this report we see the
physical characteristics of each brand as well as the price the company has
fixed for the brand and the base cost (not the actual costs). We can calculate
the current, actual cost of each brand, which I will show in another article.
Marketing Strategy Game Market Research Reports we have to
buy
These reports we have to buy and we have to
decide the period before which reports we will need in the next period. So we need
to plan ahead!
Knowing what each market report entails and
what it can be useful for is essential, so read in the following my
explanations about each report.
❗️ =
Always buy these reports if we can somehow manage to invest the budget
❓ =
Buy selectively – Nice to have but if we are really tight on the budget we can
save here
❗️
Industry benchmarking
I think it’s one of the most important market
reports in Markstrat. I bought this report every period I played, because the
information is especially valuable if we want to foresee our competitors next
moves and cut their plans. The report displays various kinds of information,
which I will explain we now and show we how we can use this information.
Which information is shown
First the report shows the overall revenues
and expenditures of each company. We don’t see how our competitor’s revenues
come together, but we can estimate that with the free market reports I showed
above.
- More interestingly, the Industry
Benchmarking report gives a very good overview which expenditures our competitors
have – even for each market! Using the information on their production
expenditures we can check and improve our calculations on the costs per unit of
each brand. This information gives we deep insight into our competitors and
allows we to plan our next steps strategically. In this article I show we how
and why we should do that!
- The Industry Benchmarking report further
shows we the Marketing expenditures as well as sales team costs of our competitors.
These are interesting but the information overlaps with another report we can
buy, the competitive intelligence. The difference is, that the competitive
intelligence report shows we an estimation of how the total expenditures of the
competitors divide among their brands and even the segments / channels. This
information is more powerful than the one from the Industry Benchmarking.
So in this regard, the competitive
intelligence report is much better.
Unique insights from Industry benchmarking report
In another area however, the Industry
Benchmarking report is gold:
We see our competitors’ expenditures for
market reports, which tells we approximately how much information they have for
the next period. We don’t see exactly which reports they bought, but if one
competitor only spend 200.000$ he must know much less than another competitor
who spend 600.000 on market research.
Here comes the extreme value of the industry
benchmark report:
- The report also shows our competitors’
R&D expenditures. That’s very interesting information right here!! This
information alone makes it worth buying this report.
In the report we even see whether the R&D
investments are for the Sonite market or Vodite – or both. It tells we in which
area our competitor is investing, thus gives we an impression of their
strategy.
Foresee competitors’ strategic moves
Is our competitor heavily investing into
Vodites? Surely, they want to launch a Vodite brand soon. To enter the Vodite
market we need to spend around 6-7 Million $ on the first project, but we can
split it over a few periods. Does the R&D expenditure of one competitor
over the last periods add up to approximately 6 or 7 Million $? Then we must
assume that they will launch their Vodite in this period!
With investments in Sonites it’s a bit more
difficult to foresee the moves. In general, the more sophisticated projects
cost more. Costs of around 2 Million will bring out a project for the high-end
market (Professionals / High Earners), around 1 Million R&D projects are
for the low-end market (Savers / Shoppers).
The tricky thing is, that we could see an
expenditure of 1 Million in the Sonite market, but this competitor is barely
dividing the costs for a high-end Sonite on two periods.. Or 2 Million in
Sonite R&D expenditure come out with two projects in the low-end sector. So
we can’t be as sure here, but the information is still very valuable to make
assumptions and foresee our competitors moves.
Why is it so valuable
to know what our competitor will do?
Well, there are many areas this information
helps you! For instance to determine the production of our brands, whether our brand
will be growing because we have the best product or does our competitor launch
another brand / better brand that will compete with our brand? In the article
on competitor intelligence I explain much more of these scenarios!
How much money do our
competitors have this period?
But the Industry Benchmarking report gets
even better: It shows we exactly our competitors’ budget for the next period.
This information becomes very valuable if we think
about the next possible moves our competitors will do. In the article
Competitive Intelligence I explain in which directions we have to think and how
we beat our competitors easily by foreseeing their next steps.
❗️❓
Consumer Survey & Panel
This market research report consists of two
reports (which we have to buy separately).
❗️
Consumer Survey
In the section of consumer survey, we see the
brand awareness of each brand on the market (Sonite / Vodite – it’s two reports
we have to buy if we want either information), both on average including all
segments (not so important) and also the awareness in each segment.
- The higher the awareness for a brand, the
more people could potentially buy the product! If one doesn’t know about a
brand, we can’t buy it. Makes sense? Good. It’s not so important to look at the
overall awareness, because we usually don’t target all segments with a brand.
It’s more important that the brand has a high awareness in the targeted
segment.
- Compare our brand’s awareness to the
awareness of competing brands in that segment. To dominate the segment we want
to have the highest awareness. Usually, an awareness above 65% is already
really good, if the brand has been long in the market (for instance our starting
brands) the awareness can also build up above 70% and up to 80%! I noticed that
the high-value segments tend to have a higher awareness than the low-value
segments.
- To increase the awareness we have to
advertise – classic, right?
Further down, we see the purchase intentions,
again in average including all segments and further down for each segment.
This information is very important!
The purchase intentions state, how many
percent of the segment bought this brand in this period (if it was available
and they were aware about it). So the purchase intentions are closely related
to the market share. Be aware that this information was for the current period
and not for the following one.
- If the purchase intentions are higher than
the brand awareness, than we have to invest more into advertising, because we could
have had higher sales if more people were aware of the brand.
- The purchase intentions tell we a lot about
how well this brand suits the needs of the segment. If the brand entails
exactly the characteristics the consumers of the segment are looking for, then
the purchase intentions are high. Of course this also depends on the competitor
products, because if there are two quite similar brands, the consumers split
up.
- Having high purchase intentions means that we
have a really good product for this segment and also that there are not many
good competitor’s products in this segment.
The last thing the consumer survey reveals
are the shopping behaviors of each segment. Which distribution channel do the
consumers in each segment tend to use?
- This information is valuable to determine
how to allocate the sales team of our brand that targets the segment. A good
approach is to take the share of shopping behavior and match it in our sales
team allocation.
But be aware, that the shopping behavior also
changes towards the next period. So, if we can even recognize a trend how the
shopping behavior will probably shift, then apply it to our sales team
allocation.
❓ Consumer Panel
This report tells we the market shares of
each brand for each segment.
- This information is nice, because we can
determine exactly how much each brand has sold in each segment by combining
this information with the free market report telling we the sales & volume
of each brand. Use an excel sheet to calculate this easily by exporting both
data sets and then calculating the sales per segment per brand with a
multiplication formula.
The consumer panel further shows the size of
each segment in percentage of the whole industry volume. So we can easily see
which segments are the biggest ones and thus most important for the industry.
However, we can also get this information
through the market forecast report (which I will explain further down), so we don’t
need the consumer panel for this information.
❓ Distribution panel
This report shows we the market share of each
brand for each of the three distribution channels.
Furthermore, it shows we the distribution
coverage of each brand in each store. That means, how many stores offer this
brand. We have this information about our brands from the free report as
explained above, but it’s important to have this information also about our competitors’
brands.
- Compare the distribution coverage of our brands
with the coverage of the competing brands (only relevant brands that target the
same segment). This information can help we for our competitive strategy,
meaning how we want to fight our competitors.
Stores only have a limited space and if we increase
our sales team to push in our products, the stores will carry less of the
competitors’ products. So, we can see whether we have to invest more in a sales
team of one of our brands. Awesome!
❗️
Semantic Scales
One of the most important reports, because it
shows we several awesome information.
First the report shows we how the consumers
perceive each brand in their physical characteristics. This does not mean that
the brand has exactly these characteristics, but the perception is far more
important than that.
The reason? Well, if we think this product
has an awesome power, than we will buy it, no matter whether this is actually
true or not.
Perceptions can be changed through
advertisements. In the decision on advertisement spending, we can choose which
characteristics we want to advertise. By doing that we can change the
perception. But be aware, that we can’t fool the consumers too much, just a
bit: We can’t make them believe our brand has a huge display if it’s actually
quite small.
I cover how we can change the perceptions of
a brand in another article.
The semantic scale report further shows we which
characteristics the segment wants, the ideal characteristics. These change over
the course of periods and the ideal value “moves” across the perception map. At
the bottom of this report we see how the ideal value has developed over the
last three periods.
- That’s why we have to revise our brands
from time to time and adapt them to the new requirements of our segment.
- These ideal characteristics are very
important when we create a new project, because of course we want to create
exactly the product the consumers want, right? I cover how to do this in
another article.
Further down we see how important each
characteristic is for the consumers, so their relative importance so to speak.
Price is usually very important, but also other characteristics play an
important role when consumers decide for a brand.
- This information helps we to focus our advertisement
on the most important characteristics. It’s awesome if our product has exactly
the battery life the segment wants, but advertising on this might not be
valuable, because it is not one of the deciding factors for them. Or would we buy
our next smartphone by only looking which device has the best battery? Exactly,
and the Marketing Strategy Game consumers are similar.
Then, the semantic scale report shows a
perceptual map for each characteristic. On the X-scale there is the most
important characteristic (in Sonites usually the price) and on the Y-scale for
each perceptual map, there is another characteristic.
- Like that we can see how well our brand suits
a segments’ needs for the respective characteristic and which other brands we compete
with. Useful, isn’t it?
❗️❓ Multidimensional Scaling
This report contains similar information like
the semantic scales, only that the Multidimension scaling several segments are
combined into a category.
That’s why I would recommend to either buy
the semantic scales report or the Multidimensional scaling.
I always bought the semantic scales report
because it is more detailed and thus more valuable. But the MDS is also valuable.
I am not 100% sure about this, but I will
make a guess:
When we base our advertisement on the
Multidimensional Scaling, we are not just telling the customers that our brand
is awesome atthis characteristic, but on this category (including several
characteristics). That’s why I could imagine, that we can change the perception
of our brand faster and in more than one characteristic at a time.
But I don’t have proof for that and as I
didn’t buy the MDS report, I am not so experienced how to interpret it
properly.
❓
Competitive Intelligence
This report shows we the advertisement
spending of each brand and per segment as well as on which characteristics they
focus their advertisements. We also see the size of our competitors sales team
and even in which channels they send their sales representatives-
- We gain powerful knowledge about where our competitors
invest the most. This makes it possible for we to make assumptions about their
strategy and focus!
- Take note of the competing brands for our targeted
segment and compare the investments. Our competitor is heavily investing in
advertisement for a segment in which we are the market leader? Well, better be
prepared for loosing market share then or stock up our investments, too!
The competitive intelligence report contains
powerful and valuable information, no question about that! So why do I put a ❓
here?
We only need to buy it if we want to use the
information entailed to make different decisions.
We should only spend our budget on the most
important reports and this one is nice to have, but maybe we rather want to
invest that budget elsewhere if we don’t plan to use this information.
❓ Market forecast
The market forecast report does exactly what
it says: It shows we how the market is (probably) going to develop. It is based
on the current development and a different behavior of the market participants
can cause the market to develop differently.
We see the market size of the industry right
now, for the next period and in 5 periods- for the market in total and per
segment. We also see how the segments are expected to develop.
- The reason that I rated this report with
just a ❓ is, that we don’t need to buy it every period. Me and my team sometimes
skipped to buy it for one period (not in the beginning though!), because we
just took the average growth rate and extrapolated it to the future. So we had
a “good enough” information and didn’t need to buy it in every period!
This can be a bit risky, because as I said
the market can change unexpectedly, but we didn’t have any problems with that.
21.
Marketing Strategy Game Decisions Making
1. Start entering our Marketing Strategy Game decisions by deciding
on the market reports
The reason for that is that the market
reports deliver crucial information that we need in order to be successful.
It’s an investment into our success in the next period, as we buy valuable
information. And also, the market report spendings are not insanely huge, but
it’s good to put aside the necessary budget right away.
- The market reports are our eyes in
Markstrat!
However, depending on what we are planning to
do in the next period, we don’t need to always buy all the reports. Some
include overlapping information with others, some we only need when we want to
decide on specific things or have enough budget to spend on “nice to have
information”.
2. Second Marketing
Strategy Game decision making step: R&D projects
The next
thing I would recommend we to decide on are the R&D projects. Like the
market reports, they are essential for our longterm success.
Without R&D, every company fails
eventually – in Marketing Strategy Game and in reality
We could blast all of our budget into
advertising and make our brand awareness huge. But without having a decent
product, the consumers won’t buy from we even though they know our brand.
In Marketing Strategy Game this is expressed
by the Purchase Intentions, which we can see in the Customer Survey report. The
purchase intentions are not connected to our brand awareness. They express how
well our product fits the consumers necessities.
The consumers intent to buy our product only
if it suits their needs à our product should have the characteristics the
segment we are targeting requires.
Try to meet the ideal physical
characteristics with our brand can only be achieved by developing new projects!
I wrote a detailed article about how to set
up a successful R&D project in Markstrat. Check it out if we want to see
how we make our R&D a success story.
So the second step in the decision process
are the R&D projects. But as I noted earlier, we can’t spend too much here,
because we need enough remaining budget to advertise and pay our sales team.
Try to only develop the most needed
project(s), that will advance our company the most.
We should go back and forth in the decision
process, therefore we might come back later to the R&D projects and a)
invest more in R&D (if we have excess budget) or b) cut the R&D
expenditures in order to invest more into Marketing and Sales of our brands.
Just remember that R&D is crucial and we must
develop our products in order to be successful in the long-run.
Rather suffer in the short-run by having less
budget for Marketing and Sales, but you’ll profit in the long-run because we have
awesome products that the consumers want.
3. Third Marketing Strategy Game decision step: Decide on
the Advertising and Sales Team
After buying the market reports & setting
up our R&D projects we can finally move to the advertisement and sales team
spending. These two go together, as I can’t say generally which one is more
important – it depends on the situation:
If our distribution coverage in the shops is
poor (compared to our competitors), we need to invest more heavily than before
into our sales team.
If our purchase intentions are much higher
than our brand awareness (in the targeted segment), we need to invest more in
advertisements.
And if both of is the case for you, we need
to find a middle path and make a trade-off decision.
I would recommend that we start with our most
important brand and then move on to the second most important, third, and so
on.
Important is usually the contribution the
brand brings our company, but in specific situations other factors can be
considered more important (e.g. to acquire market share in a segment with huge
potential –> Vodite).
The reason for that is, that we have to
prioritize and give the most important brands the budget they need. Another
learning, that is also helpful in real life.
Take into account all the information we have
(from the market reports) and consider our long-term strategy in order to make
the right decisions.
Some examples what we need to think about:
What is our most important market (segment)?
Which segment do we want to dominate?
Which brand awareness do our brands have in
their most important segments?
What is our distribution coverage in the most
important channel?
How much do the competing brands spend on
advertisement and sales team and how much do we have to spend in order to be
successful?
Which moves do we expect from our competitors
in the next period and how can we cut their plan?
What do the experiments (market research
report) say about our advertising and sales spending?
Answering these questions will undoubtfully
help we making the perfect decision!
4. Fourth Marketing Strategy Game decision making step:
Decide on the price
In my opinion, the pricing in Marketing
Strategy Game is easier than in real life. The reason for that is, that we know
exactly the ideal price point for the segment through the market reports
(Semantic scales and Multidimensional Scaling). So it’s not that hard to
determine a price that our target customers will like.
A few tips from me:
The price requirements of the customers will
change. As any other characteristic, also the price each segment expects
changes / can change.
Some segments want a lower price over the
course of the simulation (that makes perfect sense to me), some want a higher
price (that doesn’t really make sense to me). Try to foresee the ideal price!
I don’t have proof for the following, but
here comes my assumption (which has been supported by my experience). We can
send valuable signals with our price.
Setting our price slightly higher than the
ideal price can be good, not only to make more profit, but also to send the
message to the customers that our brand has a high value. The high-value and
well-off segments like that (just like in reality).
For the low-value and price sensitive
segments, the logic works the other way round. Being a few $ cheaper than our competitors
can send these segments a good incentive to choose our brand.
We can charge a higher price than our competitors
and still make the customers perceive our brand as cheaper through the
advertising objectives. Just set the ideal price as a advertising target and
voila, they think our price is perfect (if it isn’t too far away from their
actual preferred price).
5. Fifth Marketing
Strategy Game decision making step: Decide on the production size
First confession right away: We will never
exactly know how much we have to produce to cover the demand while at the same
time not overproducing!
It always contains a good amount of
uncertainty and guessing around and nobody can give we a definite advice.
As I already said above and I can’t stress
this enough:
Marketing Strategy Game is interdependent and
relative just like the real world. The actions of each market participant (= we
and our competitors) affect each other and influence the results we get.
An example:
Let’s say we decide to produce 100 units.
This can be successful when our competitors do “A” and could be a total failure
if our competitors do “B”. Without we doing anything different.
But I can give we some advice what to consider
for determining the production size.
Start by looking at what you’ve sold last
period with our brands per segment and considering our current market share for
the key segments.
Multiply our sold units per segment with the
expected growth for these segments (information we find in the market
forecast).
Now consider which changes we have made to our
products and our spending on advertisement and sales people. How could those
effect the demand?
Which actions do we expect from our competitors?
How could their actions affect the demand for our products?
Two more tips
regarding production:
1) Make use of the
20% automatic adjustment.
Marketing Strategy Game will adjust our production
plan automatically by up to 20% no matter whether increase or decrease. This is
another factor to make Marketing Strategy Game more realistic because in real
life we could adjust the production as well if we see that we have less or more
demand than planned.
So if we plan to produce 100 units, but can
only sell 90 in the end, then Marketing Strategy Game will adjust our production
to 90. Same would work in the other direction, if the demand was 110. If the
demand deviation is more than 20% from our original production plan, then Marketing
Strategy Game will only adjust 20%. Say our demand was 130 units, we could only
sell 120 and the customers would buy 10 units from one of our competitors. Or
if the demand was 70, we would still produce 80 and had 10 units in inventory.
2) Be aware, that the cost of lost sales is higher than
inventory costs. What I mean by that is:
Rather plan to produce too much than too
little!
When we don’t produce enough (and I mean even
after Marketing Strategy Game increased our production size), we don’t only
lose sales – which already hurts enough, doesn’t it?). Lost sales = lost money.
PLUS: The customers that couldn’t buy our product went to our competitor and
increased their sales! So we lose in two ways. And the cost of inventory is
usually not too high (20% of production cost) PLUS we can sell the inventory
units next period! That only doesn’t work if we change the brand (–>
allocate a new research project).
6. Sixth step: Adapt our decisions and tweak our spending
here and there until we found the perfect budget distribution
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Really It is very much information about B2B lead generation! kindly I also would like to share my views about B2B lead Check out “ how much should your budget for marketing”
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