Required : response to the discussion then reply to two class mate responses. I post the class mates response below
Interactive Marketing Simulation: Managing Segments and Customers V2
How did you develop your overall strategy for this round of decisions for MM?
What were your objectives with respect to the 4 KPIs â€“sales revenues, market share, pre-tax profit and customer satisfaction?
Word limit for posts is 300 and 150 for responses.
class mates response :
I have run the Interactive Marketing Simulation program around seven times. The first time I ran the program I did not realize the concept until half way through the quarters ending up with a poor score. After reading the module and understanding the concept at hand, I decided to write out on a piece of paper the categories and fiscal quarter dates for all 13 runs. Each time when I would run the simulation for the categories per quarter I would write down the numbers I entered and hit submit. Once I submitted the inputs, I would review the graphs and movements I would see against list price, total budget, sales force, manufacturing efficiency etc. and watch the trend line move as I entered higher or lower numbers. By my third attempt I realized by keeping the list price put only adjusting the sales force and the discounts to segments A-D allowed me to stay constant and provide customer satisfaction while still achieving profit, revenue and market share. My best run as of yet is 84 points. This results in the following KPIs â€“sales revenues:$80M, market share: 10.5%, pre-tax profit: $8.8M and customer satisfaction which is different per segment. Segment A: 3 stars, Segment B: 1 Star, Segment C: 3 stars, Segment D: 2 stars, with small customers having a rating of 3 stars. These KPI’s are due to the way I played the gain and segmented the market with shares and discounts to provide the profit and revenues for Minnesota Micromotors, Inc.
2) The strategy I was using up to this week was focusing on customer satisfaction. I had raised the price of the product but offered very generous discounts to customer segments and added on as many salesforce resources as possible. I notice the general trend of satisfied customers – those who receive discounts and an engaging sale representative- led to increased market share in half of the segments and a steady increase in revenue. However, not all market segments valued the price and the service. The segments I was having issues with gaining market share were more concerned with the product features itself.
I was satisfied with my sales revenues as I increased sales each quarter by going in with a high list price and offering discounts to identified target segments. I also saw positive feedback for customer satisfaction. I did not pay attention to pre-tax profit before this module so for this week I focused more on this KPI and gaining market share for customer segments B and D. I had to compromise salesforce resource in order to allocate budget toward product development. I chose to begin investing more into product development around midway through the decision simulation in order to simulate a growth stage (of the Product Life Cycle). This is where I saw the profits were at a high point so my strategy was to put more money into advertising to ‘stress brand differences and benefits’ and took on the marketing objective of maximizing profit while defending market share. This strategy helped me gain market share in segments B and D but I lost some market share in segment A. I will continue the objective of allocating my budget between product development, to increase customer satisfaction, and the advertising budget to help grow the market share of each segment.