Henry Hu, Week 7, Marketplace Simulation Reflection Paper, Lecture notes of Marketing

Download Henry Hu, Week 7, Marketplace Simulation Reflection Paper and more Lecture notes Marketing in PDF only on Docsity! Henry Hu, Week 7, Marketplace Simulation Reflection Paper 1 Student Name: Henry Hu Course: MGT-610-Z1 Core Topics in Management Title: Marketplace Simulation Reflection Paper A.0: Executive Summary My name is Henry Hu, and I am the Chief Executive Officer of SolidTech Corp. Welcome to the first six quarters of results from our Marketplace Live Simulation Game. This white paper will reflect on the first six quarters of activities and endeavors that have occurred at our company SolidTech Corp. This report will essentially provide insight into the results of marketing researches that we have conducted, what we have learned about our customers, and how we applied what we have learned to the branding, marketing and improvement of our products, and the marketing strategies we used to promote our products during each quarter. A.1: Objectives Our goal is to be the global leader in manufacturing and selling of microcomputers. Our target is to be the best-known brand in all three market segments, Workhorse, Traveler and Mercedes. A.2: Mission Statement SolidTech Corp's mission is to deliver solid, efficient, innovative, stylish, and cost- competitive technology products to communities around the world. A.3: Keys to Success SolidTech Corp has been in business for six quarters. During these six quarters, we have neither ran into cash flow issue that required the need of an emergency business loan, nor did we face with low demand for our products. As depicted in Figure 49 below, the players’ standings for quarter 6, that we were the best and top global performer in our industry. As depicted in Figure 2 below, SolidTech’s income statement, our revenue kept increasing over the quarters. Also, as depicted in Figure 4 below, SolidTech has generated more than $19 million in sales in quarter 6. We have survived because we remained committed to the key principles listed below. Henry Hu, Week 7, Marketplace Simulation Reflection Paper 2 Target Segments 1. Traveler 2. Workhorse 3. Mercedes Market size • focus on smaller, high margin segments • focus on large, highly competitive segments • focus on fringe segments that are out of the mainstream Geographic market • focus on smaller, less costly geographic markets • focus on the largest geographic markets, even if they are more expensive • focus on geographic markets which are in middle of the cost/size continuum • focus on geographic markets which minimize distribution costs Competitive posture • build a market position and defend it • take the lead and keep it • be first to market • be the leader in all things • be a fast follower, imitate smart competitive moves • attack the competition on their home ground • sidestep the competition whenever possible • expend resources which distract the competition Distinctive competencies • be the low-price provider in the market • be the market share leader • be the profit margin leader • be the technology leader • be the high service provider in the market Henry Hu, Week 7, Marketplace Simulation Reflection Paper 5 we established the sales team, product pricing strategy, marketing strategy, media placements, manufacturing fixed capacity, manufacturing operating capacity, demand projection, inventory control, and production line control. Since we had only $496,750 of cash on hand, we were able to bring the most 260 items to market. However, the actual demand was 684 items. Therefore, we had a total stock-outs of 424 items. Among our competitors, we had the largest total market share of 37%, which is depict in Figure 40 below. Financially, we ended up with $742,500 revenue, -$627,871 net income, and $719,911 cash on hand, which was okay given the fact that we were only testing the market. As depicted in Figure 45 below, because of the negative net income, we received a balance scorecard total of 0.0. If we have the chance to redo quarter 1 and quarter 2, I would have chosen to market the products to market segments Mercedes as priority 1 and Traveler as priority 2. The reason is because during startup, the company is in a cash crunch. Therefore, to quickly find additional capitals to expand the business without depending on bank loans, it is wise to focus on marketing the products to market segments which have high returns. A10: Quarter 3 Refection In quarter 3, we increased our media inserts from a total of 5 to 10, modified the advertisements so the claims would be more in line with the customer needs, hired an additional 5 salesmen to be placed at the Paris office, purchased additional fixed capacity, and expanded production from 250 units to 1,700 units. Everything else was left the same as in quarter 2. However, as depicted in Figure 41 below, at the end of the quarter, we went from being the 1st largest market share among our competitors to the 3rd largest market share. The reason was because some competitors have both brought additional new products to market and entered new market segments. Also, some competitors have many more media inserts and salesmen than we did. However, as indicated in Figure 2 below, in this quarter we started to have positive net income, which meant that our balance scorecard total was greater than 0.0. Also, as indicated in Figure 45 below, for the quarter, we stood at second place on the balance scorecard. If we have the chance to redo quarter 2, we would have taken out a bank loan to pay for both the design, marketing and production of additional new products, added more media Henry Hu, Week 7, Marketplace Simulation Reflection Paper 6 inserts for all the products, and expanded the business into additional market segment such as the Mercedes market. That I think could have drastically increased our market share. A11: Quarter 4 Reflection In quarter 4, we expanded our business to include the Mercedes market segment. As depicted in Figure 22, Figure 29, Figure 30, and Figure 37 below, we marketed two additional products, SolidTech D1 and SolidTech L2 that we have designed in quarter 1. Our target market segment for SolidTech D1 was Workhorse and SolidTech L2 was Mercedes. Since according to the marketing research result, similar model from competitors was selling at a much higher price, we decided to increase the price of our Stallion T1 by $150. This quarter we hired an additional 10 salesmen. For the demand projection, we increased it from 1,284 in the prior quarter to 2,560. It was because we had entered new market segment, marketed additional products, and doubled the size of our sales team. Also, we spent $836,607 in R&D to add the Slim stylish case feature to our laptops. This R&D will not be completed till quarter 6. As depicted in Figure 42 below, at the end of the quarter, we went from being the 3rd largest market share among our competitors back to the 1st largest market share. Also, as indicated in Figure 47 below, for the quarter, we stood at second place on the balance scorecard. If we have the chance to redo quarter 4, I would have taken out a bank loan to added more media inserts for all the products, and redesigned the product that targeted the new market segment Mercedes. The reason that Synergy Technologies stood as the 1st top performer on the balance scorecard was because it racked in a lot of revenue from its high-end model which was sold in the Mercedes market, and it had the most media inserts among all competitors. A12: Quarter 5 Reflection In quarter 5, we hired an additional 4 salesmen. Also, this quarter we started to participate in the sales force programs. The programs were designed to help stimulate sales across all of the brands that you have on the market. These programs offered professional training to sales people so they could develop skills related to teamwork, interpersonal relations, and selling tactics and strategies. Also, these programs offered a company-wide sales Henry Hu, Week 7, Marketplace Simulation Reflection Paper 7 contest. In this case, the contest is for a special vacation trip for the top performers among all of our sales staff. We created a demonstration kit that contains a professional presentation of our products and services. The presentation was standardized across sales people, regions, and products. Also, our company started to participate in sales force promotions. The purpose of this program was to motivate the sales people by financial incentives. We channeled their energies toward a specific brand by offering either a cash bonus or a gift to the top sellers of the brand. The incentives were to encourage them to sell more of a particular brand. Also, as depicted in Figure 51 below, we started an additional three R&D's. They were the desktop stylish case, ultra-capacity hard drive, and ultra-fast processor, for a total of $6,659,696. All these R&D's were to be completed in quarter 6. Also, since we did not increase our fixed manufacturing capacity in the last quarter, we increased it by 100 units per day. As a depicted in Figure 43 below, our market share dropped back to second place. The reason was because while competitor like Synergy Technologies had a Mercedes market share of 68.65%, we had only 1.30%. The competitors were selling many more attractive products in this market segment. Also, we starting to lose market share in the Workhorse segment. As depicted in Figure 50 below, the reason was because the competitors were upgrading their models with new product features, and they had drastically increased their numbers of media inserts. Also, they provided higher incentives to their salesmen and better sales force promotions. If we have the chance to redo quarter 4 and quarter 5, we would have taken out a bank loan in quarter 4 to speed up our R&D’s, and in quarter 5 when those R&D’s were ready, we added them to our products. Also, we would have drastically increased our media inserts, and be more aggressive with both of our sales force programs and sales force promotions. A13: Quarter 6 Refection In quarter 6, we decommissioned two old products, Traveler T1 and SolidTech L2, and created two new products, Traveler T2 and Elite M2. We added all the new features created by our R&D’s to all these products. Also, we decommissioned two old advertisements and created three new ones. Therefore, we ended up with four products to market. The target market for Traveler T2 was for Traveler, Stallion T1 and SolidTech D1 were for Workhorse, and Elite M2 was for Mercedes. This quarter, we increased the total media inserts from 18 to 34. We hired Henry Hu, Week 7, Marketplace Simulation Reflection Paper 10 Income Statement Figure 2: SolidTech’s Income Statement for all six quarters Henry Hu, Week 7, Marketplace Simulation Reflection Paper 11 Balacne Sheet Figure 3: SolidTech’s Balance Sheet for all six quarters Henry Hu, Week 7, Marketplace Simulation Reflection Paper 12 Quarter 6 Sales Total Figure 4: SolidTech’s Quarter 6 Sales Performance Henry Hu, Week 7, Marketplace Simulation Reflection Paper 15 Figure 8: SolidTech D1 Figure 9: SolidTech D2 Henry Hu, Week 7, Marketplace Simulation Reflection Paper 16 Quarter 2 to Quarter 3 Figure 10: Traveler T1 Figure 12: Stallion T1 Henry Hu, Week 7, Marketplace Simulation Reflection Paper 17 Quarter 4 to Quarter 5 Figure 13: Traveler T1 Figure 14: Stallion T1 Henry Hu, Week 7, Marketplace Simulation Reflection Paper 20 Figure 19: SolidTech D1 Figure 20: Elite M2 Henry Hu, Week 7, Marketplace Simulation Reflection Paper 21 Product Pricing Quarter 2 to Quarter 3 Figure 21: Pricing Quarter 4 Figure 22: Pricing Henry Hu, Week 7, Marketplace Simulation Reflection Paper 22 Quarter 5 Figure 23: Pricing Henry Hu, Week 7, Marketplace Simulation Reflection Paper 25 Quarter 4 to Quarter 5 Figure 27: Traveler T1 Figure 28: Stallion T1 Henry Hu, Week 7, Marketplace Simulation Reflection Paper 26 Figure 29: SolidTech L2 Figure 30: SolidTech D1 Henry Hu, Week 7, Marketplace Simulation Reflection Paper 27 Quarter 6 Figure 31: Traveler T2 Figure 32: Stallion T1 Henry Hu, Week 7, Marketplace Simulation Reflection Paper 30 Quarter 3 Figure 36: Media Henry Hu, Week 7, Marketplace Simulation Reflection Paper 31 Quarter 4 to Quarter 5 Figure 37: Media Quarter 6 Figure 38: Media Henry Hu, Week 7, Marketplace Simulation Reflection Paper 32 Market share Quarter 2 Figure 40: Market share Henry Hu, Week 7, Marketplace Simulation Reflection Paper 35 Figure 43: Market share Quarter 6 Henry Hu, Week 7, Marketplace Simulation Reflection Paper 36 Figure 44: Market share Balance Scorecard Quarter 2 Figure 45: Q2 Total Performance Henry Hu, Week 7, Marketplace Simulation Reflection Paper 37 Quarter 3 Figure 46: Q3 Total Performance Quarter 4 Figure 47: Q4 Total Performance Quarter 5 Figure 48: Q5 Total Performance Quarter 6 Figure 49: Q6 Total Performance