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StratSim Marketing

StratSim Marketing. Firm Keys to Success. Firm A: Starting Situation. High volume producer, but losing market share Small, lower feature vehicles at aggressive price In Economy, Family and Utility Classes Serves Segments 1-3 (strong in family) Broad distribution of medium quality

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StratSim Marketing

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  1. StratSimMarketing Firm Keys to Success

  2. Firm A: Starting Situation • High volume producer, but losing market share • Small, lower feature vehicles at aggressive price • In Economy, Family and Utility Classes • Serves Segments 1-3 (strong in family) • Broad distribution of medium quality • Medium quality technology profile • Competes primarily with Firm D

  3. Firm A: Keys to Success • Improve products while maintaining margin. Reposition on “value” rather than cheap. • Win Family class through Alfa upgrades • Develop new class to serve your strong segments Truck (1T) and/or Minivan (2M) • Take advantage of B2B opportunities, especially where distribution requirements keeps competition out • Watch cost to carry debt (stock / l-t bonds)

  4. Firm B: Starting Situation • High end supplier with premium pricing • In Family, Sports and Luxury Classes • Has monopoly position in Sports Class • Exclusive distribution w/ great service, but doesn’t have the coverage. • Excellent quality technology profile • Competes primarily with Firm C

  5. Firm B: Keys to Success • Maintain premium price strategy by leveraging tech capability advantage (product innovation) and advertising • Grow sports class through upgrades (major) and marketing. Be prepared to defend against new entrants. • Enter other high end markets (4M, 4U, 5U, 5T) and/or new platforms within existing classes • Improve dealer satisfaction and perhaps expand dealership coverage

  6. Firm C: Starting Situation • Positioned on the higher end with mid-premium pricing • In Family, Minivan and Luxury Classes • Good distribution w/ good service • Good quality technology profile • Competes primarily with Firm B

  7. Firm C: Keys to Success • Premium strategy – take over technology and distribution quality leadership • Expand into 4M, 5U, 2 Luxury (4L/5L), 3S • Value strategy – increase capacity, expand into other family segment and enter utility class • Expand into 2F, 2E, Utility • Innovate through the downturn • Being conservative will lead to early profit, but long-term problems.

  8. Firm D: Starting Situation • Positioned in the largest volume segments / classes • In Economy, Family, and Truck Classes • Unbalanced distribution of poor quality • Medium quality technology profile • Competes with Firm A + E

  9. Firm D: Keys to Success • Don’t lose leadership in family class (>50% margin) while exploring new opportunities. • Two platforms for 1T and 3T • Two platforms for 1E and 2E • Improve distribution coverage and quality • Use cost reduction in product development to improve COGS% • B2B after expanding distribution coverage • Watch cost to carry debt (stock / l-t bonds)

  10. Firm E: Starting Situation • Large size / value producer – “Truck Guys” • Good position in higher growth, higher margin markets, but not high volume • Poor technology profile • Lower “quality” products • Competes with A, C, and D

  11. Firm E: Keys to Success • Successfully defend position in utility through product improvement and new products for 3U and/or 4U • New product for 3T and reposition for 1T • Invest in technology for cost and innovation as products are improved • Explore opportunities in B2B, especially Delivery, and expand distribution to qualify • Watch cost to carry debt (stock / l-t bonds)

  12. Manage the Performance Dynamic Profit = Unit Sales x Unit Margin - FC (Demand x Share) x (Sell. Price – COGS) - FC - Economy - Industry Dynamics (products, adv$,etc.) - “Quality” - Relative $Ad - Price • - Distribution • - Preference - R&D - Capacity -Tech - Distrib. - Adv (MSRP - %) - Value - Price Sensitivity -“Quality” - Tech Cap. • Volume • Upgrade

  13. Past Comments from Participants • This is hard!!! • All the information is inter-related (and changing) • Clear strategy is very important • Tough to stay on strategy • Concentrate on what we do best • Decision-making easier once we had a basic direction on where we wanted to go • It starts with the customer • Understanding customer preferences and needs must be a key decision driver • No one ever went broke spending money on market research

  14. Past Comments from Participants • You Are Not Alone • Never underestimate your competition • Watch competitor’s moves and anticipate their actions and potential impacts to your business • Relative inattention to competitor pricing and positioning strategy gets you in trouble • Remember the Profit Dynamic • Limited Resources impact ability to make progress (dealers, technical competency, …) • Manage Your Margin / Pricing Decisions • Importance of Teamwork and Organization

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