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MARKSTRATIndustry 1Team U
Erica Kreer
Jeremy Fletcher
Joseph Avila
Francis Marantal
Final Numbers
Cumulative Net Contribution = $661,056 (1st place)
Total Market Share (SUSI, SULI, & VURT) in Period 10 = 25.4%.
Market Share of Sonite = 30.3% and Vodite = 19.3%
Table of Contents Overview
Goals Target Segments R&D Timelines
Analysis Weighted Delta’s Advertising Sales Force
Conclusion SWOT Marketing Objectives Takeaways
Goals
Focus on two (Others and Pros) and possibly three (Vodite) target segments plus maintain at least 40% market share.
Meet ideal characteristics of target segments as defined by overall weighted deltas.
Leverage production economies of scale and optimize Advertising / Sales Force spending.
Target Markets
Others: largest Sonite in P1 with a 5-period growth rate at 135%.
Pros: high margin Sonite and P1 weighted delta of 6.94 requiring less R&D for modification.
Hi-Earners: unsuccessful, reactionary move resulted in 1.6% market share (discontinued product).
Adopters: high margin Vodite exploited by fast follower strategy (R&D spread over P6-8).
R&D Timelines
Weighted Delta – SUSI / Others
19.55 20.1612.74
6.97 5.25 5.82 6.87 6.42 6.67 6.28
19.55 18.98
16.50
16.4915.91
10.82 9.815.50 5.19 2.83
19.55 19.36
9.26
6.976.07
6.41 7.92
8.39 8.929.06
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.000.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1 2 3 4 5 6 7 8 9 10
Delta WeightsM
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Market: Sonite Others
SUSI delta SEMI delta SEMY delta SIRO delta SUSI % SEMI % SEMY % SIRO %
P3 modification resulted in a 6.97 weighted delta and market share of 43%.
Weighted Delta – SULI / ProsP2 & P5 modification resulted in a 2.55 weighted delta and market share of 30%.
6.945.10
3.00 3.25 2.55 2.79 2.72 2.05 3.18 2.82
6.94
6.77
2.42 2.31 2.67 3.105.13 6.45
8.737.31
6.94
6.98
4.482.97
5.87 4.11
5.807.41
0.00
5.00
10.00
15.00
20.00
25.000.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
1 2 3 4 5 6 7 8 9 10
Delta WeightsM
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Market: Sonite Pros
SULI delta SELF delta SALT delta SULI % SELF % SALT %
Weighted Delta – VURT / Adopters
9.944.65 2.63
44.61
31.71
29.76
24.2220.22
25.28
28.79
28.09
0
10
20
30
40
50
60
700.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
1 2 3 4 5 6 7 8 9 10
Delta WeightsM
arke
t Sha
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Market: Vodite Adopters
VURT delta VOLT delta VACA delta VURT % VOLT % VACA %
P8 launch for Adopters resulted in 9.94 weighted delta and market share of 48%.
Advertising – SUSI / Others
0
500
1000
1500
2000
2500
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1 2 3 4 5 6 7 8 9 10
Mar
ket S
hare
Ad Spending: Sonite Others
SUSI ad SEMI ad SEMY ad SIRO ad SUSI % SEMI % SEMY % SIRO %
Spent $1.25M in order to maintain 40% market share.
Advertising – SULI / Pros
0
200
400
600
800
1000
1200
1400
1600
1800
2000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
1 2 3 4 5 6 7 8 9 10
Mar
ket S
hare
Ad Spending: Sonite Pros
SULI ad SELF ad SALT ad SULI % SELF % SALT %
Spent $1.25M in order to maintain 30% market share versus 3 competitors.
Advertising – VURT / Adopters
0
500
1000
1500
2000
2500
3000
3500
4000
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
1 2 3 4 5 6 7 8 9 10
Mar
ket S
hare
Ad Spending: Vodite Adopters
VURT ad VOLT ad VACA ad VURT % VOLT % VACA %
Spent $2.8M to only adopters resulted in 48% market (fast follower strategy).
Optimal Sales Force Size – Sonite
R² = 0.9263
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
0 5 10 15 20 25 30 35
Mass Merch Coverage %
Mass Merch Coverage % Poly. (Mass Merch Coverage %)
R² = 0.8592
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0 5 10 15 20 25 30
Dept Stores Coverage %
Dept Stores Coverage % Poly. (Dept Stores Coverage %)
R² = 0.9292
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
0 5 10 15 20 25 30 35 40
Specialty Stores Coverage %
Specialty Stores Coverage % Poly. (Specialty Stores Coverage %)
Sales Force – SUSI / Others
0
10
20
30
40
50
60
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
1 2 3 4 5 6 7 8 9 10
Sales ForceM
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Sales Force: Sonite Others
SUSI sales SEMI sales SEMY sales SIRO sales SUSI % SEMI % SEMY % SIRO %
40 sales people to maintain 40% market share.
Sales Force – SULI / Pros
0
10
20
30
40
50
60
70
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
1 2 3 4 5 6 7 8 9 10
Sales ForceM
arke
t Sha
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Sales Force: Sonite Pros
SULI sales SELF sales SALT sales SULI % SELF % SALT %
50 sales people to maintain 50% market share.
R² = 0.8044
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
0 5 10 15 20 25 30 35 40
Mass Merch Coverage %
Mass Merch Coverage % Poly. (Mass Merch Coverage %)
R² = 0.5688
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0 5 10 15 20 25 30
Dept Stores Coverage %
Dept Stores Coverage % Poly. (Dept Stores Coverage %)
R² = 0.7813
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0 10 20 30 40 50 60
Specialty Stores Coverage %
Specialty Stores Coverage % Poly. (Specialty Stores Coverage %)
Optimal Sales Force Size – Vodite
Sales Force – VURT / Adopters
0
10
20
30
40
50
60
70
80
90
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
1 2 3 4 5 6 7 8 9 10
Sales ForceM
arke
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Sales Force: Vodite Adopters
VURT sales VOLT sales VACA sales VURT % VOLT % VACA %
50 sales people to maintain 40% market share (fast follower strategy).
Economies of Scale – All Teams
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
1 2 3 4 5 6 7 8 9 10
COGS as % Sales
A E I O U
Cost of Goods Sold was 5-7% less versus all competitors over time.
COGS – 15% Reduction
-200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 2,000,000 2,200,000 2,400,000 2,600,000 2,800,000 3,000,000 3,200,000 3,400,000
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
1 2 3 4 5 6 7 8 9 10
Economies of Scale
SUS2 SUL3 VURT U
15% decrease in transfer cost with every doubling of production.
Economies of Scale – Team U
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
1 2 3 4 5 6 7 8 9 10
COGS vs. Profit (% Sales)
U Net Contribution
Maintained fairly flat COGS which led to increasing profit.
Strengths
Dominated target segments of Others (45%), Pros (72%), and Adopters (60%).
Constructed a R&D timeline that allowed us to follow a specific plan of action for Sonite and Vodite products.
Achieved economies of scale (low transfer cost) and matched shopping habits to channels (i.e. SULI consumers shopped primarily in Specialty Stores).
Weaknesses
Consistent under production limited sales and profit.
Manufacturing of SURF led to 1.6% of total market (Advertising and Sales Force resources spread too thin).
Confusion on Sales Force spending until Period 8.
Opportunities
Forecasted growth of Singles (33%) and Followers (95%) in the next 5 periods.
Modification of SUSI, SULI, and VURT to maintain single digit weighted delta.
Increase budget for Advertising and Sales Force spending.
Threats
Team O’s Advertising Spend of $11,250 and Sale Force Size of 110 in Vodite market.
Team E’s Advertising Spend of $9,300 and Sale Force Size of 180 in Sonite market.
Trade off of modifications to current products in exchange for economies of scale.
Marketing Objectives
Purchase Team A (Market Cap of $543M) for $600M because of SAKI / Hi Earners and VACA / Followers products
Allocate 20% of budget over the next 3 periods of SUSI, SULI, and VURT feasibility studies and modification to meet needs as ideal values shift.
Match 2nd highest competitor Advertising and Sale Force spend for each target segment.
Takeaways
Joey: utilization of weighted deltas
Francis: prioritization of spending
Jeremy: product quality vs. marketing
Erica: unpredictability of competitors
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