Markstrat report.doc

8/13/2019 Markstrat report.doc

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MarkStrat Group Report

Section A – Group 2

Shahan Arshad 20130026

Saad Jamil 20130023

Fahad Zafar Sobani 20130008

Tuba Javed20130030

Bilal Salim 20130014



Team: Rockets

Market: Germany

Period 0

ecisions:

After doin! a fe" #ractice rounds "e thou!ht "e had a #lan of attack on ho" to tar!et our customers$ %urteam set out several ob&ectives in the be!innin!:

• Be first mover in 'utrites

• Tar!et Medium (ncome and )i!h (ncome se!ments for *linites market initially$

• +ook closely at market forecast to fi!ure out se!ment !ro"th

• ,tili-e R. and re!ression tools e/tensively$

After vie"in! market research re#orts0 "e decided that "e "ould increase #roduction levels by utili-in! marketshares of brands !iven by consumer survey and se!ment !ro"th rates !iven by market forecasts$ Advertisin!

"ould be increased #er #eriod usin! the formula 123 avera!e Brand A"areness #ercenta!e !iven by consumersurveys4 / #revious #eriod advertisin!$ The reason for this "as because this "ould be #ercenta!e of #eo#le

"ho "ere not a"are of our brand and therefore "e "ould "ant them to become a"are by advertisin!Advertisin! allocation "as ke#t in accordance "ith the se!ments "e "anted to tar!et$

5e also decided to increase commercial team si-e and merchandisin! by #urchase intention #ercenta!e !ivenby consumer surveys i$e$ #urchase intention 6 / #revious commercial team si-e$ Same formula "as used formerchandisin! e/#enditure$ *hannel allocation "as selected accordin! to sho##in! habits as #rovided byconsumer surveys$

5e "ould order re#orts for each #eriod es#ecially consumer surveys0 distribution #anel0 market forecast

semantic scales and MS$ Semantic scales "ere used for R. and MS "as used for strate!y$ %ur decisionson advertisin! and commercial team "ere fle/ible de#endin! u#on circumstances e$!$ leftover inventory1decrease #roduction ne/t #eriod40 "hether a #roduct "as a cash co" or star or 7uestion mark1decrease8increase advertisin! accordin!ly40 #ricin! issues and other factors as the situation demanded$

%ur #ricin! #olicies "ere setusin! ideal values fromsemantic scales andre!ression tools$ The #hysicalattributes assi!ned to R.#ro&ects "ere also derivedfrom semantic scales and

converted to out of 299 usin!re!ression tools$ 5e "ouldalso kee# a close eye oncom#etitor #rices in case they!ot into #rice "ars for #ricesensitive se!ments$ This is asna#shot of re!ression toolssection "e used to convert#rice and #hysical attributesfrom out of to out of 299$

;



5e started off "ith ; brands R(*) and R(S< and a bud!et of =299>$ +ookin! at the #ricin! and R. base ofthese brands0 "e decided to tar!et )i!h (ncome se!ment "ith R(S< and the medium income se!ment "ithR(*)$ 5e set the #rices of R(S< and R(*) at =;; and =2? res#ectively and #roduction #lans at @9> unitsand 29> units res#ectively$ Advertisin! costs for brand R(*) "as ke#t at =2C> and for R(S< at =2;>$

5e increased and reallocated *ommercial Team si-e of R(*) and R(S< accordin! to the se!mentsD sho##in!habits$

5e ordered the follo"in! research re#orts:

(ndustry benchmark0 *onsumer survey and #anel0 istribution #anel0 Semantic scales and MS0 *on&ointAnalysis0 Market forecast0 Semantic scales for 'utrites$

5e also invested in R. #ro&ect E(3R(M< to modify brand R(*) and ordered a feasibility re#ort for it durin!#eriod 9$ 5e in#ut the values for E(3R(M< after !ettin! the ideal values from semantic scales$

Result:

%ur revenues increased to =C0C??> and "e made a #rofit of =220?9>$ %ur SE( "ent u# to 29CC$ 5e came in?th at the be!innin! of Eeriod 2$

Period 1

ecisions:

%ur R(S< and R(*) "ere flyin! off the shelf$ %ur endin! inventory for R(*) and R(S< "ere 22 and C

res#ectively "hich "as a !ood si!n$ 5e #ossessed 2$;6 of the market share of *linites$

%ur decisions this round varied a little in #roduction0 advertisin!0 salesforce and R.$ 5e ke#t the #rices atthe same level and increased #roduction #lan of R(*) and R(S< to ;0;> and 20C9> res#ectivelyAdvertisin! costs "ere increased to =;@@>$

5e increased the salesforce to ? for R(*) focusin! on mass merchandisin! and s#eciali-ed mass and C forR(S< focusin! on de#artment stores and s#eciali-ed mass channels because "e "ere caterin! R(*) formedium income se!ment and R(S< for hi!h income se!ment$

C



5e ordered the follo"in! research re#orts durin! Eeriod 2: *onsumer Eanel0 istribution Eanel0 Semanticscales0 Market forecast for *linites and *onsumer Eanel and Semantic scales for 'utrites

5e invested in 2 R. #ro&ect E,3R,)+ durin! this #eriod aimed at the health conscious se!ment of the'utrite market and 2 R. #ro&ect E(3R(M< for modifyin! R(*) to tar!et Medium (ncome se!ment$

Results:

%ur SE( rose mar!inally to 29C "hile the leaders "ere at 2C$ 5e held ? th #osition durin! this #eriod$ %u

R(S< brand sold 2?99 units and R(*) sold 22 units "ith C9 units left$ %ur inventory mana!ement "as!oin! e/cellent$ R(S< made a contribution of =2@@C and R(*) contributed =20$ 5e "ere risin! slo"ly butsteadily$

Period 2:

ecisions:

5e launched t"o R. #ro&ects0 E(3R(S' for sin!les se!ment and E,3R,)+ for the health conscious se!ment$5e had ordered semantic scales and market forecasts for 'utrites durin! the #revious #eriod and feasibilityre#ort as "ell so "e had a !ood idea of the ideal #hysical attributes and bud!et to allocate to our 'utrite R.#ro&ect$

Accordin! to our estimations0 "e decided to #roduce the follo"in! units:

RISE RICH

20C9 ;0;

Eroduction levels "ere calculated usin! market shares from consumer survey and se!ment !ro"th rates frommarket forecast usin! the formula market share 6 / !ro"th rate 6 / #revious #roduction$ 5e did not chan!eour #rices in this #eriod$ 5e decreased advertisin! e/#enditure by around 29991from C229 to ;2@C4 in order tokee# costs lo"$

*ommercial team si-e "as:

RISE RICH

#eriod ; ? C#revious C ?

chan!e ; 32

5e ordered the follo"in! re#orts for *+('(T<S: consumer #anel0 distribution #anel0 semantic scales andmarket forecast$ For ',TR(T<S: semantic scales$

Results:

As a result of our decisions0 "e rose to Crd #osition at the be!innin! of #eriod C "ith an SE( of 2C2$ %ur

endin! inventory for R(*) 1C94 and R(S< 1C4 "as very lo"0 sho"in! that our #roduction #lan "as nearly

accurate$ %ur total market share 1in dollars4 dro##ed from 26 to 226 due to decreased advertisin!e/#enditure$ %ur market share in *linites also fell from 26 to 2;6$ %ur revenue decreased by about ;999

resultin! in our #rofit !oin! do"n by ;99$

Period 3:

ecisions:



5e entered the 'utrites market in this#eriod$ 5e tar!eted the )ealth consciousse!ment "ith R,>$ 5e had ordered the#ro#er research re#orts and tailored the#roduct and advertisin! to s#ecifically tar!etthis se!ment$ 5e decided to make a #ro&ectE,3R,FAM to tar!et families se!ment$ %urattributes for this se!ment tar!etin! camefrom ideal values !iven by semantic scales$

*onsumer #anel0 *onsumer survey0istribution #anel0 Multidimensional scalin!0Market forecast "ere ordered at a cost of=C@k$

Eroduction units RIOV RUKD RUZL RUXX

Erices "ere ke#t at the follo"in! levels usin! ideal #rice values from semantic scales:

Advertisin! "as ke#t at these levels usin! Brand A"areness ratios from consumer surveys:

R,> R(S< R(*) R(%

3209 3@2 320C? 3202C

*ommercial e/#enditure "as ke#t at the follo"in! levels usin! Eurchase (ntentions #ercenta!e from consumersurveys:

R,> R(S< R(*) R(%

3?C 320??@ 3@ 3;@?

Results:

%ur SE( rose to 2C? as a result of our decisions$ 5e held onto th #osition and distanced ourselves from ?th

R,> became our cash co"$ %ur other #roducts "ere risin! very slo"ly in market share$ R,> had beenlaunched #recisely to cater to )ealth *onscious se!ment and it fit their re7uirements #erfectly$ That is "hy "e

"ere able to ca#ture the leadin! market share in this se!ment$

Period 4:

ecisions:

5e introduced R,HH to tar!et Families

se!ment in the 'utrites market$ 5e alsostarted an R. #ro&ect called E,3R,MB tomake a #roduct for <lderly se!ment$ 5eordered ? R. re#orts namely consumersurvey and #anel0 semantic scales0multidimensional scalin! and marketforecast for both *linites and 'utrites$ ForR,> "e #roduced 2> units "hile forR,HH "e #roduced 299> units and the

?

;099 20? 20;? 99

R(*) R(S< R,> R(%

2$99 ;2$99 C9$99 22$?9



#rices "e set for them "ere =C and =C res#ectively$ 5e increased the #roduction #lans of each brand bytheir res#ective market shares$

Results:

%ur SE( increased to 2C? as a result$ %ur revenues increased to =09 and our <BT "as =2@0$ Themarket share value of our com#any as a "hole "as 2C$?60 a decrease from 2?$C6 in last #eriod$ R,> "asour leadin! brand and "as tar!eted to health conscious #eo#le "hile R,HH "as for families "hich had notsho"n the level of success "hat "e e/#ected from it$

Period 5:

ecisions:

The ne/t day "e reconvened afterrevie"in! "hat "e had done so far$ Afterlookin! at our com#etitorsD advertisin! andcommercial team e/#enditures0 "edecided to increase our advertisin! andcommercial e/#enditure as "ell$ 5e tooka look at our !ro"th3share matri/ to seeho" our brands "ere doin!$ %ur theoryhad told us that cash co"s should be ke#tand more money should be invested instars$ o!s ou!ht to be sold off as theyde#ress Return on Assets$ >ee#in! this inmind0 "e decided to sell off our brandsR(*) and R(S< since they "ere clearly inthe do!s 7uadrant and to kee# R,>since it "as in the cash co" 7uadrant$ 5ealso had to im#rove R,Z+ since it "as in the 7uestion mark 7uadrant$

%ur #roduction units "ere:

RIOV RUKD RUZL RUXX?0?9 ? 20? 2?

Erices "ere obtained from ideal values usin! semantic scales and re!ression tools:

R,> R(% R,HH R,Z+

C$99 22$?9 ;$C9 C9$C9

Advertisin! "as calculated usin! the brand a"areness #ercenta!e !iven in customer surveys and increasin!the #revious amount by 123 brand a"areness4:

*linites 'utrites

3C0;9 30;CC

*ommercial Team "as increased by Eurchase (ntentions #ercenta!e !iven in customer surveys$ 5e increasedthe #revious amount by Eurchase (ntentions #ercenta!e to !et the ne" #eriodDs amount:

3;0@; 30C?

5e introduced a ne" R. #ro&ect E,3R,II to modify R,Z+ for the <lderly se!ment and E(3R( to start a#roduct to tar!et the Affluent se!ment$ Ehysical attributes values "ere derived from semantic scales andre!ression tools$

Results:



%ur SE( fell to 2;9C$ This "as une/#ected since our reasonin! to sell off our brands in the do!sD 7uadrant "asto increase our SE( but instead it fell$ 5e still held onto th #osition$ R,Z+ for <lderly "ent into #roduction anddid mildly "ell$ %ur share for R(% for sin!les increased to $?6 "hich "as a !ood si!n$

Period 6:

ecisions:

5e used re!ression analysis to fi!ure out future ideal values for each se!ment and decided to modify our

#roducts accordin!ly for the ne/t #eriod$

5e launched a ne" brand R(+ tar!eted at the affluent se!ment$ 5e also started an R. #ro&ect E,3R,SZ toa!ain modify R,Z+ in order to meet the chan!in! demands of the elderly se!ment as sho"n by the semanticscales and re!ression$

Accordin! to our calculations i$e$ market share 6 / se!ment !ro"th 6 / #revious #roduction levels0 "edecided to kee# #roduction units at the follo"in! levels:

RUXX RUZL RUKD RIOV RILV

99 209; 20;?9 ;09? 20999

5e decreased R(% and R,Z+ #roduction substantially from 9? units in the #revious #eriod because "e

had leftover inventory for these t"o brands$ The #roduction for R,> and R,HH "as increased since these#roducts "ere flyin! off the shelf$ 5e ad&usted our #rices as sho"n belo":

R<*%MM<'< R<TA(+ ER(*<

RUKD RIOV RUXX RUZL RILV

C?$@ @$99 C?$99 CC$99 ;2$99

These #rices "ere obtained usin! ideal values from semantic scales and re!ression$ 5e increased advertisin!e/#enditure from around 290999 to 20;$ Advertisin! e/#enditure "as increased by 123 Brand A"areness64$ *ommercial team si-e and merchandisin! "ere increased by Eurchase (ntentions #ercenta!e$

*ommercial team si-e

RUXX RUZL RUKD RIOV RILV

#eriod 2 2 ;29 229#revious 299 299 9 229 229

chan!e 299 9

5e ordered the follo"in! re#orts for *+('(T<S: consumer survey0 consumer #anel0 semantic scales0 MS andmarket forecast$

For ',TR(T<S: *onsumer survey0 consumer #anel0 semantic scales0 MS and market forecast$

Result:

<ndin! inventory for R(+ 1;4 and R,> 124 "ere hi!h "hich meant that our #roduct did not meetcustomer e/#ectations$ *onversely0 our other three brands R,HH0 R,Z+ and R(% "ere si!nificantly under#roduced "ith a total of ?2k units of #otential sales bein! lost$ %ur #roduction calculations "ere insufficientbecause our #roducts #erfectly met the ideal values of the se!ments "e "ere tar!etin!$ R,Z+ ca#tured asi!nificant #ortion of market share u#on its introduction$ %ur cash co"0 R,> shrank due to shrinkin! !ro"thof )ealth conscious se!ment$ R,HH for Families se!ment also sho"ed si!nificant im#rovement as it "entfrom do!s to cash co" as sho"n "hen com#ared to #revious #eriodDs !ro"th3share matri/$ R(+ for Affluense!ment failed to !ain si!nificant market share and ended u# as a do!$



%ur total market share 1in dollars4dro##ed very sli!htly from 226 to 296$%ur share in *linites s#lit from 6 toC6 and in 'utrites0 dro##ed sli!htlyfrom ;6 to ;?6$

Althou!h our revenue increased from02; to @;00 our #rofit dro##ed

shar#ly from 29C to ; due to lost#otential sales$ As a result0 our SE( alsodro##ed to 29 from 2;9C and "eended u# in ?th #osition$

Period 7:

ecisions:

(n #eriod Brand R(+ "as shelved since "e "ere unable to !rab sufficient market share and the costsout"ei!hed the benefits of #roducin! that brand$

%ur #roduction #er brand "asRUZL RIOV RUXX RUKD

2?02; 099 20CC? 299

,sin! re!ression analysis0 "e "ere able to !et the ideal values for #rice$ 5e converted the ideal value #riceout of to that out of 299 by usin! re!ression based tools3 Semantic$ Erices "ere set at:

RUKD RIOV RUXX RUZL

C$@9 @$99 C$ C$@9

Advertisin! e/#enditure "as ke#t as follo"s:

RUZL RIOV RUXX RUKD

3@0CC 3029 3?0@ 320

Result:

(n #eriod 0 SE( of Rockets increased to 2;90 the revenues increased by =;C0;?C$ The 'et *ontribution "asas follo"s:

Ci!i"e# $%"ri"e#

&6'6(1 4'367

The market share "as 29$6$ Salesincreased by ;?6 to =2209C2$ *ommerciale/#enditure for 'utrites and *linites

increased by ??6 1=$ million4 and 261=;$2 million4$There "as an increase of6 1= million4 and ;;6 1=2$ million4 ofadvertisin! e/#enditures in 'utrites and*linites as com#are to #eriod $ Seein! the!ro"th3share matri/0 R(% for sin!lesim#roved in #erformance since it moved outof do!sD 7uadrant and into 7uestion mark7uadrant as its market share and market



!ro"th im#roved si!nificantly$ Althou!h the simulation ended after this0 "e "ould have #referred if it had run acou#le of more #eriods so that "e could see "hat our strate!y "ould brin! about in the fast !ro"in! <lderlyse!ment$

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