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3 rd edition. Charlotte H. Mason • William D. Perreault, Jr. The Marketing Game: What is It?. A “living” case , where you learn about a situation, evaluate opportunities, develop a strategy, and make marketing plan decisions.

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Slide1 l.jpg

3rd edition

Charlotte H. Mason • William D. Perreault, Jr.

1


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The Marketing Game: What is It?

  • A “living” case, where you learn about a situation, evaluate opportunities, develop a strategy, and make marketing plan decisions.

  • In which you get regular feedback, in a report that summarizes your marketing outcomes and related financial results, based on both your plan and competitors’ decisions.

  • Where you analyze what you’ve learned by doing … to figure out answers to what you do not know (and could not know!) at the beginning.

  • That challenges you to improveyour strategy in light of the learning...

2


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A Little Background

  • Originally developed as the first PC-based marketing strategy simulation in 1985 …

    • Routinely revised and updated since that time.

  • Now one of the most widely used teaching simulations in the world.

    • Used in hundreds of universities, exec programs and companies, international competitions, etc.

  • We’ll be using the third edition

    • You’ll need the student manual and accompanying CD-Rom (which has Windows software):

      The Marketing Game!, by Charlotte H. Mason and William D. Perreault, Jr., 3rd edition, published by McGraw-Hill/Irwin, Burr Ridge, Illinois, 2001.

3


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Special Objectives Served by TMG

  • To develop skills in identifying marketing opportunities. This encompasses knowledge of and the ability to apply key marketing frameworks and tools for analyzing customers, competition, and marketing strengths and weaknesses.

  • To develop insights about creative selection of target markets and making integrative strategy decisions concerning product, price, promotion, place and the needs of a target market.

  • To develop skills in marketing analysis.

  • To provide meaningful, practical experience in translating qualitative and quantitative analysis into conclusions about profitable marketing strategies and programs.

4


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The Role of the Marketing Game

The Game offers unique learning advantages, compared to other learning approaches (like reading texts and articles, lectures, guest speakers, case analysis and presentation, projects) because it:

  • Is dynamic, like most business situations.

  • Brings the competitive aspects of marketing to life.

  • Highlights the need for integrative planning based on qualitative and quantitative analysis of the market environment.

5


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The Marketing Game is Integrative … and Covers All Aspects of the Marketing Strategy Planning Process

Narrowing down to focused strategy with quantitative and qualitativescreening criteria

Customers

Needs and other

Segmenting

Dimensions

Targeting &

Segmentation

Product

Price

S.

W.

O.

T.

Target

Market

Company

Mission, Objectives, & Resources

Positioning &

Differentiation

Promotion

Place

Competitors

Current &

Prospective

External Market Environment

Technology Political & Legal Social & Cultural Economic

6


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Overview of the

  • You take over marketing management responsibilities for your firm.

    • Must satisfy customers and earn profits

  • Focus is on marketing strategy planning.

  • Requires integration of all strategy decisions.

  • Requires attention to competitive environment.

  • Considers short term and long term perspectives.

  • Features ongoing, rapid feedback.

7


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The Process of the

Analysis of market situation/opportunities

Planning and budgeting

Make marketing plan DECISIONS!!!

Submit plan decisions

The marketing game! simulation

Company reports returned to firms

Next

Decision

period

8


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Industry Environment of the

  • Market growth

  • Technological environment

    • No major innovations expected

    • Yearly revision cycle

  • Competitive environment

    • Type of competition depends on firms’ decisions

9


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High-tech of the

Managers

Modern

Students

Concerned

Parents

Professional

Creators

Harried

Assistants

Home

Users

Segments have different needs, preferences,

situations, sizes, growth rates.

Six Key Product-Market Segments

10


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Past Sales By Market Segment of the

For Voice Recognition Device

11


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High-tech of the

Managers

Modern

Students

Concerned

Parents

Professional

Creators

Harried

Assistants

Home

Users

Distribution Channels

Firm 1

Firm 2

Firm 3

Firm 4

Firms reach customers

through full-service

dealers and Internet/mail-order discount dealers.

Channel 1

Traditional

Dealers

Channel 2

Discount

Dealers

Different segments have different shopping preferences.

12


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Product 1: Voice Recognition Device (VRD) of the

Number of Special Commands (5-20)

Key

Product

Features

Error Protection (1-10)

Ability to Customize (1-10)

13


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R&D for Product Modifications: of the Computing Costs

Note: R&D for product changes is more expensive

if you have to make big changes in a short period of time…

14


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Level 3 of the

Product 2: Digital Vocal Communicator (DVC)

Number of Tasks (1-10)

Key

Product

Features

Similarity of Commands (1-10)

Ease of Learning (1-10)

15


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Types of Advertising of the

  • Pioneering

  • Direct competitive

  • Indirect competitive

  • Reminder

  • Corporate (Institutional)

16


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Marketing Decision Responsibilities of the (Level 1)

PRODUCT Features

(and R&D for product modifications)

PRICE Wholesale price

PLACE Distribution intensity in each channel

PROMOTION

-Advertising $ Spending

-Personal selling Number of sales reps in each channel

CUSTOMER SERVICE $ Spending

MARKET RESEARCH 6 reports may be purchased

Demand forecast/

production order Number of units

17


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Expanded Marketing Responsibilities of the (Level 2)

PRODUCT Features (and R&D for product modifications)

PRICE Wholesale price in each channel

PLACE Distribution intensity in each channel

PROMOTION

-Advertising $ Spending

Type

-Personal selling Number of sales reps in each channel

Percent non-selling time

Commission rate

-Sales promotion $ Spending per Channel

CUSTOMER SERVICE $ Spending

MARKET RESEARCH 7 Reports May be Purchased

Demand Forecast/

Production order Number of Units

18


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Expanded Marketing Responsibilities of the (Level 3)

2 PRODUCTs Features (and R&D for product modifications)

PRICE Wholesale price in each channel

for each product

PLACE Distribution intensity by channel, product

PROMOTION

-Advertising $ Spending for each product

Type for each product

-Personal selling Number of sales reps in each channel

Percent non-selling time in each channel

Commission rate

-Sales promotion $ Spending per channel, product

CUSTOMER SERVICE $ Spending

MARKET RESEARCH 7 reports may be purchased

Demand forecast/

production order Number of units for each product

19


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Production Economies of Scale of the

If the president decides to invest in new equipment,

unit production costs will decline as cumulative production increases:

20


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Sales of the

Saturation

Level

Threshold

Level

Marketing Spending

Response Functions and Marketing Spending

Spending too little may have little effect, but spending too much just increases costs and reduces profit.

21


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Marketing Budget Items of the (Level 1)

  • R&D product modification costs

  • Sales force salaries and severance pay

  • Advertising expense

  • Customer service expense

  • Market research reports expense

    BUDGET FOR FIRST PERIOD: $984k

22


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Marketing Budget Items of the (Level 2 and 3)

  • R&D product modification costs

  • Sales force salaries and severance pay

  • Advertising expense

  • Customer service expense

  • Sales Promotion Expense

  • Market research reports expense

    BUDGET FOR FIRST PERIOD: $984k

23


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Discretionary Budget of the

  • Policy on initial discretionary budget.

  • Unspent money carries to future periods and earns interest.

  • “When it’s gone, it’s gone.”

  • Policy on special budget requests.

24


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Computing Prices of the

Computing Retail Prices from Wholesale Prices:

Expected Retail Price = Wholesale price/(1-% Markup)

Example: Wholesale price = $105

Channel 1 Retail Price = ($105/(1-.50)) = $210

Channel 2 Retail Price = ($105)/(1-.35) = $161.54

Computing Wholesale Prices from Desired Retail Prices:

Wholesale Price = Retail Price (1 - % Markup)

Example: Desired Retail Price = $190

Channel 1 Wholesale Price = $190/(1-.50) = $95.00

Channel 2 Wholesale Price = $190/(1-.35) = $123.50

25


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Retail Prices Charged Final Consumers of the

The retail price set by a dealer depends on:

  • The wholesale price in the dealer’s channel.

  • The customary markup used in the channel.

  • The portion of any sales promotion “deals” that the dealer passes along to consumers as a price reduction.

26


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A “Good” Wholesale Price of the

  • Should cover the unit cost of the product (given its features).

  • Should result in a retail price that will appeal to target consumers.

  • Should result in a profit margin that will contribute to other expenses and profit.

27


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Competitor Analysis of the

  • Estimate competitor’s net contribution

  • Analyze past strategies & likely changes.

  • Evaluate positioning and target segments.

Firms

1 2 3 4

1

2

3

4

5

6

X

?

X

X

Segments

?

X

?

28



Product features and prices report l.jpg
Product Features and Prices Report of the

Error

protect-

ion

3

3

3

3

Ease

of

learning

3

3

3

3

Retail

price

channel

1

$190.00

$190.00

$190.00

$190.00

Retail

price

channel

2

$146.15

$146.15

$146.15

$146.15

Brand

of

VRD

Firm 1

Firm 2

Firm 3

Firm 4

Special

commands

8

8

8

8

30


Market activity report level 2 l.jpg
Market Activity Report of the (Level 2)

Adv. Dollars

Adv. Type

Sales Promotion

Channel 1

Channel 2

No. Sales Reps

Channel 1

Channel 2

Commission

Customer Service

Firm 1

$250,000

$0

$0

10

10

5%

$92,500

Firm 2

$250,000

$0

$0

10

10

5%

$92,500

Firm 3

$250,000

$0

$0

10

10

5%

$92,500

Firm 4

$250,000

$0

$0

10

10

5%

$92,500

31


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Market Research Reports of the (Level 1)

  • 1. Market share by segment (all brands)

  • 2. Market share by channel (all brands)

  • 3. Consumer preference study

  • 4. Marketing effectiveness report

  • 5. Sales by segment by channel (own brand)

  • 6. Consumer shopping habits study

32


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Market Research Reports of the (Level 2)

  • 1. Market share by segment (all brands)

  • 2. Market share by channel (all brands)

  • 3. Consumer preference study

  • 4. Marketing effectiveness report

  • 5. Sales by segment by channel (own brand)

  • 6. Consumer shopping habits study

  • 7. Product positioning report

33


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Market Research Reports of the (Level 3)

  • 1. Market share by segment (all brands)

  • 2. Market share by channel (all brands)

  • 3. Consumer preference study

  • 4. Marketing effectiveness report

  • 5. Sales by segment by channel (own brand)

  • 6. Consumer shopping habits study

  • 7. Product positioning report

Note: separate reports are available for each product,

Except for the consumer shopping habits study

34


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Easy to use for preparing and evaluating plans, managing reports

TMGPlan Software

View, print, and manage password protected reports

Select directory

Enter Plan Decisions

Evaluate spending and profit forecast

35


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Submitting Marketing Plans reports

  • Submitting marketing plans decisions

    • Policy on paper form

    • Policy on electronic file

  • Each firm has a distinct industry and firm identification

    • Need to keep it straight!

  • Passwords and the TMGPlan software

    • Remember password used to create Plan

    • It is case sensitive (upper and lower case make a difference)

    • Best to stick to one password!

36


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Overview of Market Research Reports reports

  • Market share by segment (all brands)

  • Market share by channel (all brands)

  • Consumer preference study

  • Marketing effectiveness report

  • Sales by segment by channel (own brand)

  • Consumer shopping habits study

  • Product positioning report (Level 2 & 3)

37


Market share by segment report l.jpg
Market Share by Segment Report reports

Segment

4

0.250

0.250

0.250

0.250

10,240

Brand

Firm 1

Firm 2

Firm 3

Firm 4

Total

Sales

(units)

1

0.250

0.250

0.250

0.250

20,028

2

0.250

0.250

0.250

0.250

15,084

3

0.250

0.250

0.250

0.250

25,104

5

0.250

0.250

0.250

0.250

22,056

6

0.250

0.250

0.250

0.250

8,092

Who’s selling to whom?

Who’s buying what?

What is each firm achieving?

Which segments are buying?

38


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Market Share by Channel Report reports

Brand

Firm 1

Firm 2

Firm 3

Firm 4

Total Sales

(units)

Channel 1

0.250

0.250

0.250

0.250

56,296

Channel 2

0.250

0.250

0.250

0.250

44,308

What’s selling where?

Who’s buying what?

39


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Consumer Preference Study reports

Price

Range

low

low

high

high

high

low

Special

Commands

10-13

7-10

10-13

12-15

13-16

5-8

Error

Protection

2-4

2-4

6-8

2-4

6-8

2-4

Ease of

Learning

1-3

6-8

6-8

4-6

2-4

7-9

Segment

Students

Home

Assistants

Creators

Managers

Parents

What kind of product would a segment prefer?

What reference price seems typical for the segment?

How are segments similar and different?

40


Marketing effectiveness report l.jpg

Competitors reports

with lower

Index

0

0

0

0

0

Competitors

with equal or

higher Index

3

3

3

3

3

Marketing Effectiveness Report

Brand Awareness

Customer Service

Consumer Group Rating

Industry Average Rating

Channel 1:

Sales Rep Workload

Dealer Satisfaction

Channel Strength

(“Push”)

Channel 2:

Sales Rep Workload

Dealer Satisfaction

Channel Strength

(“Push”)

Index

0.550

100%

100%

100%

1.00

.500

100%

1.00

.500

41


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Detailed Sales Analysis reports

Segment

Firm

Channel 1

Channel 2

1

896

5,269

2

1,109

3,337

3

5,602

1,396

4

1,808

1,196

5

4,363

1,865

6

1,086

1,074

Unit sales by segment and channel

Are you reaching your target?

42


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Customer Shopping Habits reports

Segment

Students

Home

Assistants

Creators

Managers

Parents

Percent of Shopping

in Channel 2

?

?

?

?

?

?

Percent of Shopping

in Channel 1

?

?

?

?

?

?

Who shops where?

How do shopping patterns match distribution focus?

43


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Product Positioning Report reports

Segment

3

?

?

?

?

5

?

?

?

?

6

?

?

?

?

Brand

Firm 1

Firm 2

Firm 3

Firm 4

1

?

?

?

?

2

?

?

?

?

4

?

?

?

?

Which brands are closest to which segments?

Which segments have no close brands?

44


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Recommendations reports

  • Analyze the reports as you would analyze a case.

  • Make intentional changes.

  • Find a balance in marketing research spending.

  • Be integrative--think carefully about how each decision impacts each of the others.

  • Have some fun!

45


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46 reports


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List of All Slides reports(with Hyperlinks)

1. Title slide

2. The Marketing Game: What Is It

3. A Little Background

4. Special Objectives Served by TMG

The Role of the Marketing Game

6. Integrative Marketing Strategy Planning Process

7. Overview

8. The Process

9. Industry Environment

10. Six Key Product-Market Segments

11. Past Sales by Market Segment (VRD)

12. Distribution Channels

13. Product Features – Voice Recognition Device

14. Computing Costs of R&D for Product Mods

15. Product Features – Digital Vocal Communicator

16. Types of Advertising

17. Marketing Decision Responsibilities – Level 1

18. Expanded Marketing Responsibilities – Level 2

19. Expanded Marketing Responsibilities – Level 3

20. Production Economies of Scale

21. Response Functions

22. Budget Items – Level 1

23. Budget Items – Levels 2 and 3

24. Discretionary Budget

25. Computing Prices

26. Retail Prices Charged Final Consumers

27. A “Good” Wholesale Price

28. Competitor Analysis

29. Industry Sales Report

30. Product Features and Prices Report

31. Marketing Activity Report (Sample)

32. Market Research Reports – Level 1

33. Market Research Reports – Level 2

34. Market Research Reports – Level 3

35. TMG Software

36. Submitting Marketing Plans / Policies

37. Overview of Market Research Reports

38. Market Share by Segment

39. Market Share by Channel

40. Average Customer Preferences

41. Marketing Effectiveness Report

42. Detailed Sales Analysis

43. Customer Shopping Habits

44. Product Positioning Report

45. Recommendations

46. Blank side (end of show)

47. This list

47