MKT 440: Markstrat Presentation

Class project using markstrat simulation software to compete against other groups in the class.

1. Target Segments ‹#› ROUND 1 ROUND 7

2. RICH: Singles Originally targeted low income (and singles) Rationale: largest segments, unaware customers in low income By period 3, realized that private brands would always have low income Switched to Median Income and Singles Supreme made a perfect product for median income Immediately switched to focus solely on singles with both R&D and advertising ‹#›

3. RISE: 50/50 Affluent and High Earners We decided early on to drop its price, drop its advertising, and relatively ignore it. Assumed the high margin competition would be too strong. False assumption Split segment expenses 50/50 between affluent and high earners Minimized promotion ‹#›

4. RUNWAY: Health Conscious Targeted health conscious because they were early adopters and we expected to be first to market Did not expect to capture every segment Only product in industry took all sales (first mover advantage) This was crucial, because we knew that early sales would fund more R&D and expansion ‹#›

5. RUMBLE: Families Family segment in Nutrites grew to twice the size of health conscious or elderly by round 6 We knew this represented a threat from Supreme We decided to preempt the competition and develop a product that would target families in order to prevent entrants from gaining market share ‹#›

6. RICH (Clinite) PRODUCT: Usability (69) Pleasure (60) Packaging (51) PRICE: $12 PLACE: Specialized Mass (47%) Mass Merchandise (33%) PROMOTION: Advertising Media: $7,500K Advertising Research: $800K ‹#›

7. RICH (Clinite) ‹#› IDEAL VALUES BRAND PERCEPTIONS

8. RICH (Clinite) ‹#›

9. RISE (Clinite) PRODUCT: Safety (78) Efficacy (69) Pleasure (49) PRICE: $19 PLACE: Department stores (33%) Specialized mass (33%) PROMOTION: Advertising Media: $100K Advertising Research: $50K ‹#›

10. RISE (Clinite) ‹#› IDEAL VALUES BRAND PERCEPTIONS

11. RUMBLE (Nutrite) Product: Clinical Benefits (72) Packaging (69) Variety (60) Price: $26 Place: Specialized mass (40%) Department Stores (37%) Promotion: Advertising Media: $2,357K Advertising Research: $800K ‹#›

12. RUMBLE (Nutrite) ‹#› IDEAL VALUES BRAND PERCEPTIONS

13. RUNWAY (Nutrite) Product: Clinical Benefits (63) Flavor (57) Price: $25 Place: Specialized Mass (42%) Department Stores (42%) Promotion: Advertising Media: $3,150K Advertising Research: $500K ‹#›

14. RUNWAY (Nutrite) ‹#› IDEAL VALUES BRAND PERCEPTIONS

15. Period 1: Clinites ‹#›

16. Game theoretical decision to launch Nutrite ‹#› Our Prediction Expected Opponent Prediction Refresh Opp. Opp. Refresh 10m, 10m 12m, 20m 20m, 12m 10m, 10m 10m, 10m 25m, 20m Enter Don’t Don’t Don’t Don’t Enter Enter Enter 20m, 25m 10m, 10m

17. Period 2: R&D Into The Nutrie Market ‹#›

18. Period 3: Continuation of R&D ‹#›

19. Period 4: Nutrite Initial Launch ‹#›

20. Period 5: Further R&D Into Families ‹#›

21. Period 6: Clinite Advertising ‹#›

22. Overall Industry Trends Price sensitive customers entering market at faster pace Profit margin trade off ‹#›

23. Overall Industry Trends ‹#›

24. Successes and Failures SUCCESSES: First mover advantage in the Nutrite market Targeting singles with Rich and lots of advertising Underfunding Rise Preempting competitors entrance into Nutrite market and their strategies FAILURES: Not anticipating Supreme targeting singles in Period 1 Not anticipating Supreme would target median income in Period 4 Targeting low income with Rich in Period 1 ‹#›

25. Key Learning Experiences 1. Focused on Semantic Elements that had most importance Advertising and pricing 2. Bold choices paid off, but required trade-offs 3. Paid close attention to competitor’s maneuvers Eg. Noticed the amount of money Supreme spent on R&D 4. Short and long term goals - stayed consistent with our plan 5. Competitive Advertising and Commercial experiment study a. Avoided diminishing marginal returns (most people were overspending) ‹#›