Decision-Making in Stratsim Game - Coursework Example

Marketing: Executive Summary The purpose of this paper is to talk about making of decisions in Stratsim game, having 5 branches assembling automobiles. Thus strategy and objectives are drawn by Firm C initially utilising the status of their firm in Period 1 in the competing market. Making use of the hints as well as manual cited in the course will assist us in taking decisions regarding place, promotion, production and promotion of the product, which will be discussed in the paper. Finally, as the game ends, our Firm C accomplishes the best results compared to other firms. This was possible because of the consistent meetings of the members as well as effective analysis of the market. 2. Introduction For any successful organization, making of the decisions is a very important task. Nevertheless, one of the key challenges faced by modern day managers is how they can effectively compete as well as generate competitive advantage via proper position of their companies in the best position by having a market share that is high. This is a big challenge because organizations are functioning in an environment that is complicated and influenced by globalization as well as fast technological changes. This impacts business in two ways such that opportunities are created for managers who are proactive, with those unable to cope disappearing. The position that a given company will occupy in the market place will be dependent on how good strategic choices were made together with their implementation. Stratism-which is in the dynamic automobile industry appointed us as managers. We coped well, inspite of the task being challenging as well as enjoyable. So as to arrive at good strategies as managers, we usually considered the environmental issues because they have close relationship with the strategies of our firm. We were able to create a strategic fit via aligning the strategies of the company with those of the business environment. In return, our firm became very efficient in production, sales; marketing decisions something that positioned our firm amongst the leaders. Statsim as mentioned earlier is in the automobile industry and has 5 firms. Originally, all firms had similar strategic potential which implies having similar competencies and resources such as technological capabilities and capital. The number of vehicles from respective managers was anticipated to set out those capabilities so as to properly position their firm brands in the market. This is because each firm has its own weaknesses as well as strengths that position it in a unique manner in the market. Competition in entering the market segments and developing new products is a technique of accomplishing competitive advantage at the Stratsim industry. Even though the industry is extremely competitive, it is also attractive because demand for vehicles is rising world over, hence promising huge returns in terms of profit and capital invested. Industry 1 Firm C:This firm has 3 cars Luxury(Climax),minivan (Camini) and (Cafav).We began our campaign by coming up with our market strategy, efficient advertisements and enhancing technology which gives us a high rating in safety, interior, quality and style. So as to compete effectively with others in the same period, as a firm we focused on how to serve our target markets the best way via a total offering on product, marketing, service in addition to price. The main reasons that lead to the rise in our stock price are product developments and upgrades. Firm B was our closest competitor in the luxury car market. We used this clue to create key upgrades in addition to increasing our promotions. Because of our dominating the minivan, we managed to increase the prices so as to cater for the good quality. http://www.ukessays.com/essays/management/study-on-automobile-company-stratsim-management-essay.php#ixzz3Sx9Arsd6 3. Product introduction We discovered numerous opportunities through environmental analysis; In Period 1: We identified a new customer through market research (4m).In addition; we had the monopoly of the minivan car. Our customers for the minivan class car(Camini) are (2M) and lack much disposable income compared to other segments and are thus much sensitive to price. This made us think of launching a new car (Cobra) for the new customer (4M) that satisfies their needs. We used tools technique to be able to determine the features of the new idea and came up with rational price. We managed to launch Cobra in Period 6 with an advertising budget of $90 million. In Period 3: Market research managed to get another new customer (5A).Thus, AEV being a new segment car (was not available in the industry).Our idea was to launch a new car (Cooper) for the new customer (5A) that satisfies their requirements. We again referred to tools technique so as to establish the features of the new idea and set up a practical price. We successfully launched Cooper in period 6 with an advertising budget of $90m million. 4. Segmentation Targeting Positioning First establish which types of customer exist; then secondly select which ones are the best off trying to serve and eventually implement our segmentation through maximising our products/services for that particular segment and communicating what we have decided to differentiate ourselves in that manner. http://www.consumerpsychologist.com/cb_Segmentation.html Established Existing Customers We established 5 consumer segments in Stratsim; 1. Value seekers This group has basic transportation requirements and uses their car for commuting to work, or maybe as a primary multi-purpose vehicle. Nevertheless, they do not have as much disposable income compared to other segments and are, thus, more sensitive to price. Safety and quality are particularly crucial to these consumers. Other vehicle categories that may be of keen interest to these customers comprise of truck and economy. 2. Families These have flexible but somehow primary transportation requirements. They require a combination of people as well as cargo-carrying abilities with maybe a fragment of family fun built in. Nevertheless, they do not have much disposable income compared to other segments and are thus sensitive to prices. Quality and prices are particularly significant to these consumers. Categories of vehicles that perhaps are of keen interest to families comprise of economy, minivan and family. (3)Singles This market is young having more disposable income to use on transportation as well as a broad variety of transportation requirements. Performance and styling are the most crucial to this segment. Categories of vehicles that may be of keen interest in this segment include truck and sports. (4)High Income This comprises of individuals with high incomes and more sophisticated transportation requirements. This segment comprises of retirees, professionals and families. They view their vehicle as a sign of their success in life. Because they have more income to dispose on transportation, they most likely are to buy vehicles having additional features as well as excellent performance. Categories of vehicles that may be of keen interest to this segment comprise of luxury and family. (5)Enterprisers This segment sees their vehicle as an expansion of their individual and business ambitions. Enterprisers utilise their vehicles for business transport in addition to impressing possible clients. Their vehicles may company or privately-owned. Some careers such as investments, sales and real estate are most likely to be in this category. Categories of vehicles that may be of keen interest to this segment include luxury/sports utility as well as other high-end vehicles which is dependent on their business requirements (The StratSim Case-Page 23-25). Select which ones we are best off trying to serve 1. High income who are interested in Luxury class (Climax) ( 4L) 2. Enterprisers who are interested in Luxury class (Climax) (5L) 3. Family who are interested in family class (Cafav) (2F) 4. Family who are interested in minivan class (Camini) (2M) New Customers: 1. High income who are interested inminivan class, so we Launched a new car(Cobra) (4M) 2. Enterprisers who are interested in AEV class, so we Launched a new car (Cooper) ( 5A) Implement our segmentation by optimizing our products/services for that segment and communicating that we have made the choice to distinguish ourselves that way. Products: The automobile industry is in the stage of growth where opportunities usually reduce. With this in mind, the firm consistently continues to frequently make small upgrades on every attribute at various times so as to differentiate our products and be more modern, so as to maximise and transform the existing attributes which have become old with the passage of time. We also increased technological capabilities so as to enhance products to satisfy our customer requirements. Incomes that are high require vehicles with extra features and good performance.Interests to the high-income segment include family and luxury.Thus we enhanced Cafav & Climax.Moreover we launched a new product sfor new clients(Cobra minivan for 4M). Families require a combination of vehicles that can carry people and cargo with maybe a little family fun built in. Categories of cars that may be of keen interest to families comprise of economy, minivan and family. Quality and safety are particularly crucial to this category and thus we decided to upgrade our minivan car Camini. Enterprisers-these take their car as an expansion of their business as well as personal ambitions. They make use of their cars for business transportation in addition to impressing their customers. Categories of vehicles that may be of keen interest to these people are sports, luxury, utility and other high-end vehicles, according to their business requirements. We upgraded Climax. When we realize that there is a new customer seeking for the new class car AEV, we launched our Cooper AEV for 5A. We focused on the features that were required by clients, for instance interior and style for high income and families’ safety. This assisted in acquiring reputation and developing a customer base that is loyal. Price: High income (4L) (4F) (4M): This category takes their vehicles as a sign of success in life. Because they have more income to dispose and spend on transportation, they are most likely to buy vehicles with additional characteristics and good performance. We decided to come up with a strategy in pricing that was stable prices since our prices are higher than our rivals, however increased after upgrading the product. Since our product was targeting high income families (4F), so we did not decrease the price of our family class (Cafav), and we did a slight increase in price after upgrading the product. We have used tools techniques for pricing the new product ( Cobra) Families (2M) :Vehicle categories that may be of keen interest to families comprise of economy, family and minivan. Nevertheless, they lack much disposable income compared to other segments and are in addition sensitive to price. Since our product Camini was targeting (2M), so we did not increase our price, but we did a slight increase in price after upgrading the product. Enterprisers (5L) (5A)-Enterprisers as earlier mentioned view their vehicle as an expansion of their business and individual ambitions. They utilise their vehicles for business transportation and impressing potential customers. We have used tools techniques (concept research) for pricing the new product( Cooper) Promotion So as to sustain our leading edge in the minivan and luxury categories and enlarge the shares of other categories we were forced to adjust the marketing technique. We Increase advertisement budget to increase awareness percentage, increased promotion budget to attract & retain our customers as well as attracting new customers such as 2F, 1AEV. Increase direct mail budget to reach our targeted customers. Increasepublic relation budget to enhance our company identity brand. Advertising campaign for launching new products. Place We increased dealerships and the training budget in order to establish supporting services. We increased dealers in different distribution regions to widen our coverage areas and increase the coverage percentage and market share. Market Mix: Market mix comprises of 4Ps –Product, Place, Price and Promotion. Nevertheless, the marketing mix presently includes other numerous Ps like Positioning, Packaging, Politics and People as important mix components. To build the correct marketing mix, businesses have to fulfill the following; The product must have the correct attributes, for instance it must look good and function well. It must have the right price. This is because consumers will have to purchase in big quantities to make a healthy profit. The products must be in the precise place and at the precise time. Ensuring that goods arrive when and where they should when they are required is a significant operation. The targeted group should be made aware of the availability and existence of the product via promotion. Effective promotion assists a firm in spreading costs over a bigger output. http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html 5. Market Mix-Promotion (Regional corp.adv. public relation, direct mail, Adv., Pro.) Promotion basically refers to communicating with consumers. It offers information that assists in making decisions to buy a service or a product. Thus the pace, razzmatazz and creativity of some promotional activities are strange to usual business operations. The cost related with advertising products frequently represents a big proportion of the entire cost of item production. Nevertheless, effective promotion leads to an increase in sales such that promotion and other costs are spread over a big output. Whereas increased promotion is usually an indication of a reaction to an issue such as competitive activity, it makes an organization to build and develop up a sequence of messages and can be highly cost-effective. http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html In our firm; Strategy ; Was to increase the promotions for the products that we had competitors in similar category. 2) Increase the promotion in launch of new cars 3) Reduce the advertisement and raise the promotion after making sure that there is adequate awareness amongst consumers. 4) Increase the promotion for those products that had low demand. 6. Market Mix-Price Price is the one, of all the other aspects of the marketing mix that builds sales revenue. All the others are expenses. An item’s price is obviously a significant determinant of the value of sales that a firm makes. Theoretically, price is established by the recognition of what consumers see as the value of the item being sold. Conducting a research on the opinions of consumers in regard to pricing is critical as it shows how the value they attach to what they are looking for and what they are willing to pay. The pricing policy of an organization usually varies due to circumstances and time. Thus for instance, Lake District’s water value will be significantly different from that of the desert. http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html In our firm: Luxury Class : Begging with high price comparing with competitor B Family Class: begging with high price comparing with other firms except firm B. Tools: It is specialized analysis method to assist in understanding the customer needs well. It is used in the following periods; In period 1, we use the tools (Concept tests) to determine the attributes of our new concept (Cobra) minivan car. In period 1, we use the tools (Concept tests) to determine the attributes of our new concept (Cooper) AEV car. In period 3, we use the tools (Consumer Customer) to expect the price range of our customers 4F and 5L. In period 4, we use the tools (Consumer Customer) to expect the price range of our customers 2M and 4M. In period 5, we use the tools (Consumer Customer) to expect the price range of our customers 2L and 5L. Strategy: Having prices that are stable tom prevent loss of customers.Nevertheless,prices were raised only after product upgrade(Cafav, Camini and Climax).Before the new products(Cobra and Copper) were priced, concept study was made. 7. Marketing Mix-Place Even though figures differ broadly from one product to another, approximately one fifth of the product’s cost goes on taking it to the consumer. Normally, ‘Place’ is interested in different techniques of storage and transportation of goods, in addition to availing them to the consumer. The distribution system comprises of getting the precise product to the precise place and at the precise time. Choosing a distribution system method is dependent on a number of situations. Normally, it is quite suitable for some manufacturers to sell to wholesalers who in turn sell to respective retailers. There are those who will prefer selling directly to customers or retailers. http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html In our firm; In Period 1,we increased the number of dealers so as to raise our percentage of coverage. We also raised the planned openings to 10 in south region and 5 in every other region. Strategy: Raising the number of dealers to raise the percentage of coverage, hence assuring the rise in dealers ranking. This is illustrated in both the table and the graph. 8. Market Mix-Product Product: The concept of marketing mix began in the 1950s.However, the US corporate marketing world as well as the marketing practice has clearly grown tremendously from the time the term was invented. For instance, nowadays there are several more services currently that are available like those found online. In addition, the variation between service and product has turned out to be more obscure (for example, a service, product or a web-base software application?).Nonetheless, the term product here implies services or products. Thus, the service or product offered is supposed to fulfill particular, existing market demand. Otherwise you should build a market niche via creation of a strong brand. http://virtualaccuracy.com/2007/10/definition-of-marketing-mix-product-price-place-promotion/ In our firm: Starting with three cars (Cafav-Family Class)+(Camini-Minivan Class) + (Climax-Luxury Class).We have monopoly in the manufacture Minivan Class car. In Period 3, Cobra (Minivan Class) was initiated so as to endear high income consumers searching for a family car. Manufacturing a car from a class that is available is cheaper than manufacturing a car with a class that is new. We differentiated this vehicle from Camini by reducing the size and increasing the styling and interior to satisfy the customer requirements. Cooper (AEV Class) was launched in period 6,to satisfy the Customers in Enterprisers category. Again, our firm had the monopoly of launching a car in this category. Cafav(Family Class) All the competitors have similar class (5 firms in the industry).We attempted to lead in this category. Due to that, we decided to; 1. Increase promotion and advertisement in Period 2.Sales rose from 191 to 218. 2. Do minor upgrade in the technological abilities that families are searching for in Period 4, leading to a sales increase of 66. 3) Do another minute upgrade to the car technology abilities made in period 5 in all technological abilities and price MSRP is raised by $638. Even though our intentional decisions in this type of category could not make us leaders, it nevertheless facilitated us to raise the share from 4.5% to 7.4% in addition to increasing our market share of this category from 13.3% to 21.7%.Eventually we managed to lead the 4F customer. Climax (Luxury Class) This category had a single competitor from firm B. Even though we were leaders in this category, this did not stop us to upgrading the technology abilities in period 3,4,as well as 5 to maintain the lead. There was an also sales increase in the first 2 upgrades and a reduction after the last upgrade. There was also an increase of the market share from 40.8% to 71.7% Camini (Minivan Class) Being the single manufacturer of this type of car(100% market share),we maximised our advertisement and promotion slowly starting in Period 2 together with having a single upgrade in Period 6 that comprises of upgrading the interior ,style, safe and quality. Cobra (Minivan Class) So as to attract more new customers, we launched a new car, though in the minivan category that our manufacturer has which would cost cheaper than initiating a new car from unavailable category. The new customer was none other than 4M9High income).In addition, the technological abilities has been carefully chosen so as to fulfill their requirements. There was no upgrade that has been initiated except some small changes in promotion and advertisement which were adequate to raise the sales slowly from 106 to 154. Cooper (AEV Class) There was a new customer 5A who was waiting our launching of a new car, AEV. Even though this was expensive, nevertheless our company adopted for this car a concept study, initiated a center as well as budgeted so as to produce this type of vehicle. Thus, this car was launched in Period 7 and from first period the sale rose from 275 to 430. Enterprisers (AEV class Copper)(5A) launched the new car. 9. Results In this case we were again single makers of Minivan Car and we led in this car this time. As the game was ending, we became leaders of 2 more categories which are AEV and Luxury. Most Effective Decisions Launching AEV car “Cooper” was one of the most effective decisions that we made. Others include; Launching of the Minivan Vehicle “cobra” for M4 customers. Raising technology from the start Enhancing our products when required to restore confidence that we have the top quality products in the industry in accordance to customer requirements. Least successful decisions Disregarding the rising capability in the first period. Manufacturing less than demand in some periods that could empower us to raise our market share and sales. Disregarding use of the tools features at the start that could facilitate us to be more knowledgeable regarding the group that we have centered on and sales by customers and so forth. 10. Conclusion and Recommendation Being competent in the present day’s business atmosphere needs managers to think strategically as well as act in a proactive manner so as to not only survive but also grow. Scanning environment carefully is important to succeed since it offers useful information from the environment in which the firm is functioning in. Normally any environmental change has a tremendous impact on the effectiveness of the strategies of any given firm. Thus, the managers’ ears and eyes should be wide open so as to know what is taking place around their environment. Creativity and innovation are the only techniques that an organisation and industries can carry on whereby an organisation can initiate a culture devoted to learning. It is also crucial to manage roles as we experienced in the StratSim. Firm C through the strategy of differentiation had managed to build values to its customers by providing quality products more efficiently and expediently. By having unique resources such as competent management team with an adaptive capability, which the rivals cannot match or are rare and hard to copy. Good customer relations, innovation, creativity as well as other capabilities are faced with the danger of imitation and substitution because of technological advancement. References http://www.ukessays.com/essays/management/study-on-automobile-company-stratsim-management-essay.php#ixzz3Sx9Arsd6 http://www.consumerpsychologist.com/cb_Segmentation.html http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html http://virtualaccuracy.com/2007/10/definition-of-marketing-mix-product-price-place-promotion/ Read More