The Using Perceptual Maps in Marketing Simulation - Essay Example

? The Using Perceptual Maps in Marketing Simulation involved a company called Thorr Motorcycles. The company is dedicated to the sales of luxury motorcycles. In this industry firms have been highly dependent on using image to attract customers. The motorcycle industry began back at the turn of the 20th century. The first motorcycles cost approximately $200, today motorcycles can cost upwards of $25,000. Thorr Motorcycles generates over $5 billion in revenues yearly with a total production of over 200,000 units. The company controls a 40% market share in the 651 + cc motorcycle marketplace. The purpose of the simulation is to construct a perceptual map for a marketing plan of Thorr Motorcycles. During the first round of the simulation the first step was to create a perceptual map of the company to attract customers due to the fact that the firm was facing declining sales from its existing product, the Cruise Thorr. “A perceptual map is a visual representation of what the customer thinks of a brand” (Using Perceptual Maps in Marketing Simulation, 2013). The student had to choose four parameters among the following nine parameters: lifestyle image, product design and styling, cool, product uniqueness, service offerings, price, engine capacity, safety, quality engineering. The parameters selected were lifestyle image, service offering, price, and quality engineering. According to the simulation the four parameters selected were the fundamental parameters for Cruise Thorr perceptual map. Lifestyle image was chosen because image plays a fundamental and critical role in the buying decisions of customers in this industry. Price is a no-brainer because people purchasing any type of product evaluate its price to determine whether the price is justified for the good or service a person is acquiring. The high price Thorr Motorcycles charge for the Cruise Thorr is obtained due to the brand image of the company and the perception of the customers that they are acquiring a superior product than the competition. The use of a branding strategy enables companies to charge a premium for its products or services (Kotler, 2003). Quality engineering was selected on the fact that this parameter is a good indicator of the quality of the product the firm offers. Service offering was chosen because motorcycle enthusiasts are attracted by companies that offer a wide variety of services. During the second round of the simulation the player was faced with the dilemma of the market position of the Cruise Thorr not being able to target customers adequately to achieve the desired sales output. The simulation gave the option to either reposition the Cruise Thorr or to introduce a new product geared towards the economical market. The idea of introducing a new product to target young customers by making the motorcycle less expensive is a bad strategy that the company should not pursue. The firm since its inception has worked hard to create a brand value and corporate image beyond what anybody in the industry holds. Introducing an economical model is not aligned with the mission of the company and would be counterproductive because it would deteriorate the sales of the Cruise Thorr and anger the customer base of the company. The decision taken was to reposition the Cruise Thorr. The positioning strategy selected was to provide financing options and increase services. Providing financing options increases the potential customer base of the company because it allows people that cannot afford to purchase the bike by paying cash the ability to acquire the motorcycle by virtue of their credit. Increasing services is a smart move because it increases the value of the product for the customers. The simulation forced the player to choose a marketing mix for the new repositioning strategy. The price of the motorcycle was maintained without any changes. Decreasing the price would hurt the profitability of the company, while an increase in price will create customer dissatisfaction. The following three promotional options were selected: organize parties for Cruise Thorr owners, offer insurance and protection plans, and hire celebrities for endorsements. Providing parties for owners creates value for the customers and it is an effective and inexpensive way of creating a community atmosphere among the customers of the firm. Offering insurance and protection plans can provide added income streams for the company. Celebrity endorsements are an effective way to attract the masses towards a firm. The selling method used was to sell motorcycles at the dealers and through the internet. Three services that the firm will offer are training to dealers, financial services, and service to owner groups. The final stage of the simulation involved giving a score of each of the parameters of the perceptual map chosen. The perceptual map was scored in the following manner: Lifestyle image = 10 Price = 7 Quality engineering = 9 Service offerings = 9 The results obtained for lifestyle image and quality engineering were correct, but price and service offering were overestimated. The simulation provided the constraint of a company entering the early phases of the maturity stage of the product lifecycle. The sales of the company began to decline. The marketing intervention allowed the company to accomplish the goal of extending the maturity stage of the product life cycle. By repositioning the product the firm was able to obtain new interest in the Cruise Thorr. A year after the implementation of the marketing plan the sales of the company declined slightly during the first three quarters of the year, but there was a large increase in sales during the 4th quarter. Since the firm entered the maturity stage it was important to increase investment in marketing. The marketing plan that was implemented had a budget of $13 million. The plan chosen ended up costing the firm $12,626,000. The plan was implement $374,000 under budget. During the maturity stage it is critical for a company to maintain the market share they have built during the earlier two stages of the product lifecycle (Productlifecyclestages, 2013). The simulation was a very good learning experience. It teaches students the importance and positive impact that marketing initiatives can have on the success of a company. The students were exposed to the concept of perceptual maps. The concept of perceptual maps is very useful for marketers. One of the greatest aspects of the simulation was that it gave students feedback on their decisions so that they could learn from their mistakes. References Kotler, P. (2003). Managerial Marketing (11th ed.). New Jersey: Prentice Hall. Productlifecyclestages.com (2013). Product Life Cycle Stages. Retrieved March 17, 2013 from http://productlifecyclestages.com/ Using Perceptual Maps in Marketing Simulation (2013). University of Phoenix. Retrieved March 17, 2013 from https://ecampus.phoenix.edu/secure/aapd/vendors/tata/UBAMsims/general_marketing/general_marketing_perceptual_maps_simulation.html Read More