marketing game final

8/7/2019 Marketing Game Final

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B2B Marketing

Marketing Game:

Team-5 Orange: The Underdog

Athens, June 2010

Professor: S. Gounaris

Team: Katakis Thomas,

Mourouti Ioanna,Papakonstantinou Sotiris,

Spyridakis Markos,

Vagiokas Nikolaos



Marketing Mix

Product

Innovative: launch new products with new technology

Price

Use of products with high market share and same technology as benchmarks

-> Parity pricing or lower compared to them due to our

a) Penetration strategy (as our products had weak market share)

b) Products characteristics were considered average vs benchmarks

Promotion

Defend market share with same levels of promotional intensity and depthIncrease of promotion and advertisement only when product news became available

Place

Keep our firm set on a geographical critirion via consulting a market research



Products

Products Tech Resistance SuspensionConductiv.

Density BaseCost

List Price

KUST 1 4000 30 750 388 630

KUZZ 1 3500 40 550 362 550

KUTE 3 3000 75 600 323 400

KURE 3 3000 50 650 375 500



Period 1 Decisions

Production

Same Prices (no inflation readjustment)

Same Production

Macro-Segmentation

Focus on Central (40%) and West (35%), due to better market shares in these regions

Focus on Large (60%) and Medium (25%) Clients, as per the 80/20 Pareto logic

Focus on Communication (40%) & Consumer Goods (35%), as per the Industrat tool depiction

DMU Sales Force

Eng. 40%, Prod. 20% Purch. 20% Gen. 10

DMU Technical Force

50% Prod., 50% Purch.

Other:

Hiring of 2 Salesmen

Lack of hard facts for mostparameters due to purchase of

1-2 researches each year



Period-1 Results

Stock Price

26$ -> 15$. Huge drop and last player on the block

Net Mktg Contribution

8,338$

Inventory Holding Costs

1,622$. Huge inventories

3 Products with high Inventory -> minor production quantities forecasted

KUTE sold out



Period-2 Decisions

Production

Increased KUTE production (40->45)

Inventory depleted to the rest. Small reduction forecasted

Decrease Promotion for: KUZZ(200->80), KURE(150->110)

Pricing

Adjustment of prices according to competitive product characteristics

KUST (630->545), KUTE(400->425)

Macro-Segmentation

Improvement of focus in terms of size due to market research

Large (60->50%) and Medium (25->30%) ClientsDMU Sales Force

Absence of research. Fine-tuning in the dark as the MS in testing and primary source were very low

Eng. (40->35%), Prod. (20->25%) Purch. (20->30%) Gen. 10

Lack of hard facts for

most parameters due

to purchase of 1-2

researches each year



Period-2 Results

Stock Price

15 $ ->10 $

Net Mktg Contribtion

8,338m->846


1,622m->3,138m



Period-3 Decisions

Production

Increase KUTE production (45->50)

Big reduction to the rest products (due to promotion?)

R&D

Decided to invest in Technology-4 KOREX (no competition)

Investment - 2700000

Prices

KUST (545->500), KUZZ(550->550), KUTE(425->450), KURE(500->500)

Macro-Segmentation

Focus on Large (36%) and Small (38%) Clients

DMU Sales Force

Eng. (40%), Prod. (25%) Purch. (30->25%) Gen. (10->15%)

Market Research

Demand Analysis - Geographic Segmentation


most parameters due

to purchase of 1-2




Period-3 Results

Stock Price

10->5$


846-> -2,435m


3,138m->1,411m



Period-4 Decisions

Production

Increase KUTE production (45->50)

Big reduction to the rest products

R&D

Investment in Technology-4 > 5,500,000!

Prices

KUST (500), KUZZ(550), KUTE(450), KURE(500)

Macro-Segmentation

Large (60%) Clients

DMU Sales ForceEng. (40%), Prod. (25%) Purch. (30->25%) Gen. (10->15%)

Market Research

Supplier Survey - Geographic Segmentation

Awareness Intentions - Geographic Segmentation


most parameters due

to purchase of 1-2




Period-4 Results

Stock Price

5$->1$


-2,435m$ -> -7,633m$


1,411m$ -> 247k $



Period-5 Decisions

Low Awareness and Preference in the GM was identified and solved -> Increased focus on General Manager (25%)Prices were increased by ~25% to reach profitability again

KUST (500->670), KUZZ (550->700), KUTE (450->570), KURE (500->635)

New product was released KUAA (technology 4) with exceptional characteristics

Top price in the portfolio was set for the new product (710) due to new technology

Bulk promotion (200) was invested in the new product

30% of the technical support was allocated to the new product

Sales force was increased (62->70)

Increase technicians 30->35 to support the new product

Sales training was increased

Focus on Consumer Goods (45%)

Market Research in several areas:

Awareness Intentions - Aggregate Information

Demand Analysis - End Use Segmentation

Market shares - Geographic Segmentation

Org. Buying Process - Size Account Segmentation

Market Forecast - Size Account Segmentation



Period-5 Results

Stock Price

1 $ ->9 $

Net Mktg Contribution

-7,633m->-346k (close to positive)


1,446m mainly due to the new product.

Only 4,4k out of 25k KUAA were sold



Period-6 Decisions

Increase prices according to InflationNo Production of the KUAA in order to sell the stock

Increase Promotion of KUAA from 200->400$ (!!!)

Increase Advertisement of KUAA to 70$ (!!!)

Increase Sales training (90$)

Macro-Segmentation

Focus on Central (45%) and West (26%), due to better market shares

in these regions derived from the market research

Focus on Large (40%) and Small (35%) Clients, triggered from the

marketing research results

Focus on Instrumentation (43%) & Consumer Goods (34%) according

to the demand revealed by the market research

DMU Sales Force

Focus on Purch. Managers (22%) and Gen. Managers (20%) in order to

shift our clients from Supplementary to Primary



Period-6 Results

Stock Price boom

9$ ->19$ (!!!)

Net Mktg Contribution -> extremely positive results

-346k$ -> 9,407$

Very low Inventory Holding Costs (115k $) due to precise f orecast

New product KUAA sold out!!! -> sales increase f rom 4,4$->24$

Our Firm reached the 2nd place in sales



Period-7 Results

� Stock Price boom

19$->25$

� Net Mktg Contribution:

extremely positive results

9,407$->15,801$

� Zero Inventory Holding Costs

�All products sold out!!!

� Our Firm reached the 1st place in sales and stock price



Lessons Learned

Market Research is extremely important in order to take the correct decisions

Inf lation was NOT taken into account in the beginning

Up to period-4 we only f ocused on Market Share and not on the prof itability of the

company.

Investment in new Technology (4) which no other Firm possessed, boosted our sales and

stock price.



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Net

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Big increase after correction in prices and

introduction of new technology -> Fist Place

among all Firms

High Inventory Costs in the beginning and after

the first launch of the new product (P5).

Negative Contribution in the early phases due to

wrong pricing policy and high inventories.

Corrective actions boosted the contribution



Over view Charts 2

Big increase in prices in

period-4. Follow inflation

in next periods

Big increase in sales after

introducing the new

innovative product KUAA



Over view Charts 3

Big increase in sales after

introducing the new

innovative product KUAA

Boosted contribution after

prices correction and

introduction of KUAA



Team: Katakis Thomas,Mourouti Ioanna,

Papakonstantinou Sotiris,

Spyridakis Markos,

Vagiokas Nikolaos

Thank you!!!Thank you!!!

marketing game final

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