Markstrat Simulation Game - using Segmentation, Targeting, and Positioning

Editor's Notes

• #12: The company has negligible competition in Vodites market as REWINNING is fulfilling demand of the targeted segment(Followers) The segment size is 911000 units of which 816000 is met by REWINNING. ROB is one of the top selling brands with only SONY1 as a potential competitor in the segment.
• #13: PLC ROCK (Sonite) is in the declining phase due to fall in the size of total segment size whereas ROB (Sonite) is declining due to the company’s decision to channelize majority of it’s resources towards REWINNING in order to lift SPI. REWINNING has almost reached maturity stage whereas RETOLDYOU (Vodite) is in the introductory phase. RETOLDYOU has a great potential for growth during the coming year a it perfectly targets the followers market according to semantics. REWILLWIN is a dead product as it is not a targeted product. The company introduced REWILLWIN to the Vodites market, which was first to enter the market. As there was no likelihood of competition, the product was designed with basic characteristics and at the same time invested on R&D for developing REWINNING (perfectly targeting followers). Critical assessment of the firm’s performance – Period 8: (SWOT) Strengths: REWINNING is making a huge profit for the company. 90% market share in Vodites market Weakness: REWILLWIN is a dead product Lower market share in the Sonites market Opportunity: Constant growth in the Savers and followers segment size RETOLD you is a good substitute for REWINNING according to semantics Threats: Decline in the size of High earners and professionals Fall in the sales of RETOLDYOU
• #14: In order to gain high SPI in Markstrat, we have allocated a huge proportion of our resources on REWINNING as it was the highest selling product in Vodite market and the followers market (target for REWINNING) was growing tremendously. We forecasted a huge demand from the segment referring to the market size. The previous year production of our competitors were comparatively negligible. We found this to be an excellent opportunity to generate profit and the production from our competitors wouldn’t fulfill the demand. We decided to produce huge number of REWINNING and allocated majority of our resources on REWINNING. This decision was focused solely on increasing revenue and thereby shoot SPI. This can’t be followed in the following periods. The company would loose sales of all other products and when REWINNING goes to the declining phase according to PLC, company’s SPI will fall. In order to maintain a strong portfolio, it is necessary to generate profit from multiple sources rather than from one single product. ROB and RETOLDYOU are targeted towards Savers and Followers respectively. According to Semantics, these products are almost in line with needs of the target market. Due to the transfer of resources other products to REWINNING and competitors thereby having superior competitive advantage(Period 8), the sales figures have dropped for these products. These products will take over its competitors if the allocation for advertisement and R&D is made fairly higher than that of competitors. Even though ROCK is in the declining phase and it’s target segment (High earners and professionals) is declining, the product still contributes fairly higher than other products of the company in sonites market. In order to sell excess inventory and to make maximum profit out of the product before it die, it is necessary to allocate fair amount of resources to the product. REWILLWIN is a dead product which doesn’t suit the needs of consumers. The product will not sustain in the market due to competition. Allocating further resources to the product will be an unnecessary an expense and if channelized in a more productive way, will generate revenue. The primary policy for the next couple of periods will be to stabilize existing product.
• #15: Savers market is one of the fastest growing markets and ROB is perfectly on target with characteristics, which is a competitive advantage for the product. Still SONY 1 is the segment leader as they advertise more on the segment when compared to ROB. The total forecasted potential of the market according to report is 1022 k units for next year while SONY 1 and ROB together produce 369 k units less than the demand. Hence, allocating more resources on ROB (almost double of competitors) will be productive. Current advertisement expenses on ROB is .9 million whereas SONY1 spend 1.8 million. Hence we recommend our next year’s allocation for ROB to be 3 million (1.2 million over SONY 1). ROCK is likely to die in the following years and still contributing a lot to the revenue from Sonites market. The reason for ROCK’s decline is the decline in total segment size of High Earners and shoppers. Still this is a productive market for at least two to three following years. Demand of the segment is met collectively by ROCK, SOLD and TONE. Still, the competitors are not fully focused on segmentation. In order to gain maximum return on the investment made by ROCKIT on ROCK, we recommend an additional budget of 1.15 million to allocated for ROCK, which will be 1 million more than the amount spent by competitor(TONE). REWINNING is currently allocated with 13 million for advertisement, which is exceptionally high whereas competitors are spending only 2.4. According to Semantics, the price of REWINNING is much higher than that demanded by followers (targeted segment). Therefore, RETOLDYOU is likely to grow in the upcoming years as it is perfectly targeted in terms of features and price. The currently allocated budget for REWINNING is 13 million and 0.1 million for RETOLDYOU. We recommend distributing the 13 million as 6 for REWINNING and & 7 for RETOLD you. (REWINNING Has high brand awareness).